Does Money Buy Happiness?
In the March/April issue of Mother Jones, Bill McKibben has a fascinating and far-reaching article, “Reversal of Fortune“. The subtitle reads “The formula for human well-being used to be simple: Make money, get happy. So why is the old axiom suddenly turning on us?”
Apparently, economists have begun taking ‘happiness’ seriously. Apparently, one’s state of happiness can be measured fairly accurately, and a group of economists have founded a new field called ‘hedonics’ to study it, led by Nobel Prize-winning Daniel Kahneman, author of Well-Being and professor at Princeton.
McKibben reflects, “the idea that there is a state called happiness, and that we can dependably figure out what it feels like and how to measure it, is extremely subversive. It allows economists to start thinking about life in richer (indeed) terms, to stop asking ‘What did you buy?’ and to start asking ‘Is your life good?’ And if you can ask someone ‘Is your life good?’ and count on the answer to mean something, then you’ll be able to move to the real heart of the matter, the question haunting our moment on earth: Is more better?”
Well, contradicting many idealists’ dreams and wishes, more is in fact better for many people. Studies have shown that people who are struggling to get by, who lack nutritionally rich diets, who have no financial security when they get sick and who suffer cold during the winter: having money solves real problems, and brings more happiness. But only up to about $10,000 a year per capita (that’s for every man, woman, and child, so a family of four=$40,000 annual income). After that, money doesn’t seem to have much to do with happiness, at all.
McKibben calls it the ‘Laura Ingalls Wilder effect’ (of Little House on the Prairie fame). Laura’s story was of “a life rich in family, rich in connection to the natural world, rich in adventure–but materially deprived. That one dress, that same bland dinner. At Christmastime, a penny–a penny! And a stick of candy, and the awful deliberation about whether to stretch it out with tiny licks, or devour it in an orgy of happy greed. A rag doll was the zenith of aspiration. [McKibben’s] daughter likes dolls, too, but her bedroom boasts a density of Beanie Babies that mimics the manic biodiversity of the deep rainforest. Another one? Really, so what? Its marginal utility, as an economist might say, is low. And so it is with all of us. We just haven’t figured that out because the momentum of the past is still with us–we still imagine we’re in that little house on the big prairie.”
Our current pursuit of material well-being is not only failing to make us any happier, but it is trashing the planet and is literally making us crazy. Across the world, from the U.S. to other developed nations like the UK and Japan, the “happiness index” has been going down for decades. “In one place after another, rates of alcoholism, suicide, and depression have gone up dramatically, even as we keep accumulating more stuff. Indeed, one report in 2000 found that the average American child reported higher levels of anxiety than the average child under psychiatric care in the 1950s–our new normal is the old disturbed.”
McKibben’s thesis is that old habits die hard. In the very recent past (i.e., well into the 1800’s) much of humanity, including the Western world, was struggling to survive. The deep-seated habit of acquiring more, eating more, living in better houses, was actually very helpful in survival. But this survival instinct has now become a monster that is not only destroying our planet, but ruining our health and happiness.
Meanwhile, in our pursuit of material happiness, we have lost touch with our social roots, which in Laura Ingalls Wilder’s day made up for material deprivation. In recent decades, “when our lives grew busier and more isolated, we’ve gone from having three confidants on average to only two, and the number of people saying they have no one to discuss important matters with has nearly tripled. Between 1974 and 1994, the percentage of Americans who said they visited with their neighbors at least once a month fell from almost two-thirds to less than half, a number that has continued to fall in the past decade. We simply worked too many hours earning, we commuted too far to our too-isolated homes, and there was always the blue glow of the tube shining through the curtains.”
I will share that this is exactly what has happened in my own life. When I was younger, I worked less and lived in much poorer circumstances, but I was surrounded by friends, hosted or attended (humble) dinner parties at least once a month, and spent lots of time chatting with neighbors. None of us had any money to spare, really, but there was food on the table, clothes on our backs, and electricity and heat when we needed it. Now, working longer hours, I can honestly say I’ve lost touch with a number of old friends, and I haven’t really replaced them with new ones, either.
The last and probably most important discovery of this new field of hedonics is that companionship matters. “Economists lay it out almost as a mathematical equation: Overall, ‘evidence shows that companionship … contributes more to well-being than does income,’ writes Robert E. Lane, a Yale political science professor who is the author of The Loss of Happiness in Market Democracies. But there is a notable difference between poor and wealthy countries: When people have lots of companionship but not much money, income ‘makes more of a contribution to subjective well-being.’ By contrast, ‘where money is relatively plentiful and companionship relatively scarce, companionship will add more to subjective well being’.”
So if you really want to be happy, make enough money to meet your basic necessities, and then have a lot of friends and family, and spend a lot of time with them.
Wait, did we really need a new science to figure this out?
Great post, Rich.
There’s another school of thought offering the premise that the basic motivation behind human action is to improve one’s subjective state of mind, regardless of whether that action is the purchase of some new product, the saving of a little more money for retirement, gifting that same money to someone in greater need, watching three hours of television, or paying a visit to one’s neighbor for a good conversation.
How each one of us chooses to direct our really scarce and valuable resources of intention and attention, and how each one of us values whatever change of mind results from the choices made, evidently impacts our feelings of happiness… and by extension our financial and social status in the long-term.
What puzzles me to no end is why so many of us derive so much more apparent satisfaction from consuming than from saving, from spending than from relating, from maintaining than from developing. Institutional designs, marketing strategies, and cultural influences certainly play big roles in how we make such choices, but we all have the opportunity to learn from our experience and change our values in ways that support greater happiness along the lines of what you suggested.
Rich,
This is your best, most compelling post, I think. Thank you.
I have a few points I’d like to follow up on specifically. First, yes, less is sometimes more. And, the effects of having more goods and services, more cheaply on others and on the environment is a major part of the moral stakes for all of us even at the level of the individual. That said, I pass my time, even some of my professional time at school, thinking about why we want more. I think “happiness” is at too large an order of things, though. At least one of the ways in which we seek happiness is by trying to express our own personal truth, (finally, this time, yes, dammit!), and our own unique authenticity. Some form of happiness might start with existential serenity and security, then. But we are not OK living with and even loving our own “imperfections” (so, you have to ask yourself why childhood obesity is on the rise when the images on TV of bodies are increasingly much the opposite. Cindy Crawford, the supermodel, recently said that she’d be too large to model today even at the peak of her fitness for modeling in the 1990s). There is always a better body, a more pleasing face, a more sophisticated way of making an argument, funkier clothes, niftier electronic gadgets (do we really need new computers every 3 years if you’re just using Word, emailing and surfing?), a sexier partner, a more exciting vacation opportunity, a new side of “me” to express…The idea of a self being trapped in there that we must somehow release through consumption could be part of the larger problem for our society writ large.
Anyway, I am not sure even the Ingalls family existed according to the dictates of strict need either. Ma eventually enlarged her kitchen and Pa gave in at times and came home with gumdrops. It’s dangerous to think any society is objective that way (the “need” of settlers for land meant the “need” to displace Native Americans from theirs; the so-called “need” to reproduce means certain roles for women and men and a hatred of queer identities). Good show, though. My mom made my sister and I watch it.
The most important thing I wanted to bring up though is that even as someone who wants to be highly critical of the trajectories of our contemporary consumer society, fading back into tradition and into the past is something women and LGBT folk and many racial/ethnic/religious minorities simply cannot afford to do. The truth is that even the ideal of Main Street is wrought with racial and religious exclusions and prohibitions about what’s permissible for women and what’s intelligible sexually as well as with respect to gender expression.
A shared sense of collective companisionship has often, in the West, come at the cost of LGBT human rights and women’s freedom.
That said, one need not travel too far to meet gay men, for example, highly disillusioned with the Queer niche market. I’d be the first in line on that one. For many of us, though, neither option, the moral traditionalism that thickly unites neighbors nor a consumerist free for all is helpful. Can we envision other possibilities that are more humane, more just and more satisfying? And think about: if the state and the churches (and synagogues, Mosques, temples, circles, etc.) were more loving towards us, would we need to search out our happiness or our selves as much or as urgently through consumer practices? Would Queer as Folk, the one and only local gay pub or the coming out of a fictional TV character take on the (still important) connotations they do if we weren’t so otherwise marginalized and despised?
Wonderful insights and analysis! I especially like the comment about the difference between poor and rich nations and the trade off between money and companionship. Increasing what you don’t have makes an impact on your happiness.
See http://HappinessHabit.com for more ideas as to how to live a happy life.
Michele Moore – author of
How To Live A Happy Life –
101 Ways To Be Happier
http://www.MicheleMoor.com
An interesting post, thanks.
I’m afraid though, that the post misses an important point. Wealth and happiness are positively correlated. What this means is that rich people are happier. They are happier because they have less stressful lives.
To say that one should make just enough money to meet basic needs and then spent time with friends misses the core dynamic. Getting wealthy makes you happier.
Best,
James
Wealth and happiness are *not* correlated above $10,000 per capita.
ABC News quotes UNESCO and World Health Organization studies: http://abcnews.go.com/Technology/story?id=2759812&page=1
The Guardian (UK): http://www.biopsychiatry.com/happiness/happygene.html
The Wall Street Journal: http://www.mindfully.org/Reform/2004/Happiness-Tashi-Wangyal8oct04.htm
I suspect that wealth does not lead to less stress, either. Sure, you’re not worrying about food bills anymore, but you have a whole new set of worries to deal with, including a gyrating stock market.
Excellent postings & commentary!
Wealth buys freedom from some worries… adequate food, shelter and health care. Past this, studies show that wealthy people are not significantly happier than the rest of us.
Certainly people who earn a great deal but who are still over extended are not significantly happier than poorer people in the same circumstances.
Michele Moore, author of
How To Live A Happy Life –
101 Ways To Be Happer
http://www.HappinessHabit.com