Money Not The Key To Happiness, But It Helps
Sydney Morning Herald
Friday June 20, 2008
Given economics is the dismal science, the economics of happiness may seem conceptually strange, if not contradictory.
Much as it pains me to admit it, economists have some interesting things to say about happiness and, in particular, about the relationship between happiness and economic growth. Australian politicians hardly seem out of step with constituents on this. Society prizes economic growth, and when growth is threatened, as in recent months, we worry about the future. But there is an argument, advanced in books like Clive Hamilton's Affluenza, that we have got this all wrong - that the never-ending quest for economic growth has become a millstone. Our apparently insatiable appetite for flat-screen TVs, SUVs and $7000 barbecues leads us to work longer hours, accumulate more debts, endure more stress and generate more pollution Far from being a means to happiness, the argument goes, economic growth is an end in itself, and the key source of our unhappiness. I find this interesting but not wholly convincing, and I want to offer at least two cheers for economic growth. First, what do we mean by happiness, and how do we measure it? Economists and psychologists talk about happiness as something quite specific. Happiness is pleasure, and pleasure is a sensation. The crucial point here is that happiness is entirely subjective. You can measure electrical activity to detect where positive feelings of happiness correspond to brain activity. But it's easier to ask people. For about 30 years in about 100 countries, social scientists have tested it by asking people to assess their levels of happiness, and then answer many other questions about life, politics, work, and anything else they can think of. In no particular order of importance, the following tend to make some people happier than others: being married, healthy, well-educated, young or old (the middle-aged are consistently less happy), fulfilled at work, and religious. It appears nationalities such as Mexicans, Vietnamese and Filipinos are particularly happy. Others, most prominently east of the old Iron Curtain, are particularly unhappy. But what about money? We know it can't buy love, but can it buy a more pleasant form of misery? The paradox of happiness is this: people with money, other things being equal, tend to be happier, and the occupants of wealthier countries - the aforementioned notwithstanding - tend to be happier. Yet measured over a time when wealth escalated, an individual's happiness is unlikely to shift, study after study says. I question this. Ask yourself what you would do if asked to tick a box describing your level of happiness. I suspect you would make a judgment relative to how happy you have been, how happy you hope to be, and how happy you think others are. Most likely we put ourselves somewhere around the middle, because, even if our lives are going well, we can think of ways they might improve, or times when we seemed happier. We do this because we can always think of others who seem to be doing better than us, and some doing worse. Political scientists spend much time asking people to place themselves along ideological scales running from left to right. Time after time, across countries, we find few people identifying as far left or far right, and a whole lot putting themselves in the middle. This is why elections are won on the fabled centre ground. The flaw in comparing per capita gross domestic product with happiness is that you are comparing absolute and relative measures, and it is being plotted along a scale without an absolute end-point. It's hardly surprising, then, that as income increases substantially, happiness hovers somewhere just above the middle. As Hamilton observes, our income has more than trebled since the 1950s, when we were a reasonably happy bunch anyway, with a happiness measure of about 3.2 out of a maximum 4. It would have been simply impossible, therefore, for happiness, measured this way, to keep pace with income growth. My second reservation is with the portrayal by Hamilton and others of Australians as slightly crazed consumers seeking happiness in the activity of shopping, with suburban storage lockers filled with otherwise untouched purchases. It's overdone. Most people seek happiness in various ways. Consumerism is just one. Hamilton's own data demonstrates that Australians regard money as being way down the list of importance in making them happy, behind things like relationships, community, religious beliefs and fulfilling work. Economic growth is positively linked to one crucial good - health - even if the pursuit of wealth can trigger stress and depression, even obesity. But the strongest defence of economic growth may be political. Tensions about who gets what, when and how from the economic pie are easier resolved when the pie itself is growing. If it's shrinking, politics can be very dangerous.
© 2008 Sydney Morning Herald