I am not proud, but I am happy; and happiness blinds, I think, more than pride.

The speaker distinguishes pride (a self-regarding elevation) from happiness (a felt state of fulfillment), insisting that the latter—not the former—is what currently governs their perception. The striking claim is that happiness can be more “blinding” than pride: contentment may dull critical judgment, soften awareness of risks, or make one overlook inconvenient truths because the present feels so good. In this sense the line is a caution against complacency and the intoxicating effects of joy, suggesting that even positive emotions can distort perception and lead to errors in judgment. It also subtly defends the speaker’s conduct: if they seem oblivious or overconfident, it is not arrogance but the haze of happiness.