While philosophers such as Mill and Rawls no doubt discussed the phrase, it dates back to at least Thomas Gray, a British poet and professor who used it in the final lines of the poem "Ode on a Distant Prospect of Eton College" in 1742. Lines 91-100 read:

To each his suff'rings: all are men,
Condemn'd alike to groan,
The tender for another's pain;
Th'unfeeling for his own.
Yet ah! Why should they know their fate?
Since sorrow never comes too late,
And happiness too swiftly flies.
Thought would destroy their paradise.
No more; where ignorance is bliss,
'Tis folly to be wise.

Special thanks to Prof. Rebecca Ammerman.