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November 30, 2005

Does money make us happy? Generally no, but that does not mean that generating wealth is a mistake - Life, Liberty and the Right to Pursue Unhappiness

Posted by William Coleman

Does money make us happy? Studies show that as countries grow richer - once they have reached a certain basic level of wealth - they do not necessarily grow happier, or for that matter unhappier. Does this mean that generating wealth is a mistake? Dr William Coleman - Reader in Economics at the Australian National University - answers this with an emphatic no. "Western society chose to become wealthier but not happier, and this was a rational choice - largely because wealth has become easier to obtain but happiness has not." Too often the raising of happiness as a more important value than wealth has been used to reconcile peasants to their straw roofs. What is more, some of those societies - such as Stalin's Russia - that have most fetishized happiness have been those societies where life has been at its most miserable.

Included amongst the adversaries of economic growth and the "economic criterion" in general - are certain "champions of happiness". A well expressed instance is George Poullett Scrope (1797 1876), the lord of the Manor of Castle Combe, MP from 1833 to 1868, and author of several critiques of classical political economy. In "The Political Economists" (Quarterly Review, 1831, volume 44) he wrote:

That happiness of individuals does not necessarily increase with wealth, needs not the combined authority of all poets philosophers and moralists of past ages to convince us. The most cursory observation of mankind proves that there is often as much enjoyment beneath a straw roof as a painted ceiling, under a smock frock than a silken robe.
The latent syllogism here is simple, namely:
Our economic circumstances do not matter to our happiness;

Happiness is all that matters.

Therefore:
Economic circumstances do not matter.
This column wishes to confute the conclusion.

To do so I propose to (largely) concede the first premise, but deny the second. This conjunction of concession and denials will still, however, leave the economic criterion incompletely defended. This is because the champions of happiness, betraying a weakness in their case, often implicitly substitute an alternative for the second premise. They often implicitly contend, not that happiness is the only thing that matters to us, but that:

Happiness should be the only thing that matters us.
This too will be denied.

That money is insufficient for happiness needs no labouring. Pathetic tales of lottery winners provide a familiar and vivid underlining. Witness 16 year old Callie Rogers, a foster child from a council estate, who has described herself as "not having a happy moment" after winning 1.9 million. In the three months following her 2003 win she [Daily Telegraph, 13th September 2003]:

suffered robbery, an estrangement from her father, the break-up of two relationships, faced accusations in tabloid newspapers of stealing another girl's boyfriend and been allegedly threatened with blackmail. "Today I can say I have never felt so miserable".
That money is almost unnecessary for happiness is a stronger proposition that, while long maintained by some sages, has only been empirically corroborated since the mid 1950s by many striking and now well-publicised surveys of happiness. Since that time surveys of the members of numerous societies have repeatedly concluded that income has only a small significance on how happy subjects report themselves to be. (Employment, marriage, sex, and good weather are also of only small importance). Health, it seems, is far more important.

Comparisons over time of these happiness surveys corroborate the conclusion. In the USA per capita real income rose by a factor of 2.75 between 1955-2002, but the proportion of Americans reporting themselves as "very happy" has remained quite unchanged. Even more telling, Japanese real per capita income rose 10 times between 1950 and 2000, but the average happiness showed no change, whatever.

Comparisons across countries concur. In the World Values Survey 1995/2000 Ireland is measured as the happiest country. It ranks just a trifle ahead of Mexico. The USA also measures in as a quite happy country. It is equally ranked with El Salvador, with a per capita income only 11 percent of the USA.

There is one important qualification here: the very poorest of the worlds countries do fare badly: for example, in the World Values Survey Zimbabwe and Tanzania are unhappiest.

But the overall conclusion is plain: if we are after happiness then we don't want to be Africa, but Central America is just fine. Consequently the whole project of transforming the likes of Central America into the North Atlantic, that has been endorsed by the great and the good for almost 60 years, seems pointless.

At least, it does if happiness is the only point.

But happiness is not the only point.

To recognize this we would be well served by registering the truth that happiness is just one "climate of emotion" of many. It is the one very much tied up with "good news". It is stimulated by the hope of good news, and extinguished the fear of bad. This characteristic is underlined by the fact that the persons who report themselves happiest are also those who are mostly likely to agree to the proposition, "It makes no sense to plan". It is the "in control" people who are the miserable people. To happy people all good things are news.

But the emotional climate that is happiness is not necessarily attractive. One reason for this is that happiness goes with a sense of completion; a sense of the end of struggle, of equilibrium, and the calm of a "happy ending". The Enlightenment was obviously drawn to calm and equilibrium, and it is not surprising that they made a cult of happiness. But the Romantic revolution had quite a different set of attractions. And we remain their heirs. Does everyone want a happy ending?

It can also happen that no emotional climate at all is sought; that sensation, rather than emotion, is hunted down. Pleasure is an obvious example. That pleasure is not happiness is plain enough. But it is still the palpable point of much activity.

And there are, very commonly, things that are wanted but are neither emotion nor sensation. Wealth. Renown. Power. Achievement. Justice. Revenge. Staying Alive. Not Staying Alive. These are not wanted because they bring happiness. They are not wanted because people think they will bring happiness. They are, in considerable measure, just wanted.

To summarise: people want happiness, but they do not want only happiness. "Better to be Socrates dissatisfied than a swine satisfied". This reflects the thought, but puts it too narrowly. Most would prefer to be a dissatisfied human than a satisfied swine.

Happiness, then, is an insufficient criterion to test a society's success. A better test is a capacity to accommodate her members wants. And what is the measure of that capacity? Wealth. For wealth is just an index of the capacity to accommodate wants. And wealth isn't just good for satisfying a want for material objects. Wealth allows society to deliver more justice, as all criminological data strong attests. Even the wish for renown - that seems "positional" and inherently scarce - is probably served by a rich and wired society. "In the future everyone will be famous for fifteen minutes".

Perhaps recognising that not all wants can be rationalised as simply a means for the end of happiness, the champions of happiness often transmute their key premise into a prescriptive one: Happiness should be what we want.

This prescription comes in several variants.

The prescription in its weakest form holds that happiness is the only thing we really want. Regrettably, we are foolish enough to mistake it for the means that may (sometimes) obtain it; and even identify the unreliable means with our true end. So we think we want wealth on account of such a mistaken identification. But we do not really want wealth. Wealth is a great mistake.

This weak form of the prescription has some truth in it. Lottery winners probably illustrate it. I suspect many are seeking happiness, but mistakenly think money is the way to get it. They have got the technology to happiness wrong.

Nevertheless, the getting of wealth is not, generally, a mistake. Western society over the past 60 years has become much wealthier, without getting happier, because happiness was not the aim of getting wealthier. Society chose to become wealthier but not happier, and this was rational choice - largely because wealth has become easier to obtain but happiness has not. The "price" of happiness, in terms of wealth forgone, has probably increased.

A stronger form of the prescription maintains that happiness is the most elevated type of want. In this form the prescription maintains it would be meritorious if we wanted happiness more, and other things less. And in some sense there is surely some truth in this. Pleasure is a more selfish goal than happiness; and happiness is the more sociable. A society more concerned with happiness and less with pleasure would be less selfish and more sociable. But, at bottom, it is the relative merit of selfishness and sociability that are at stake here, not pleasure and happiness.

The strongest form of the prescription of happiness is absolute: it is right to want happiness, and wrong to want anything else. This has some appeal on account of its capacity to rationalise the social control of certain behaviours that are voluntary but entail misery or self-destruction or that just seem "mad". The voluntarist the person committed to minimising command and coercion - is at a something of loss in the face of these behaviours. They can deny the rationality of such behaviours and so exempt them from tolerance. But the voluntarist makes something of a dogma of rationality. So instead they often make the sunny assumption that these behaviours do not exist. But they do exist.

We can imagine a weakening of the voluntarist's ethic whereby full rein is to be given to whatever persons want to do, as long as it makes them happy. In this ethical schema people have a right to the pursuit of happiness, Benjamin Franklin style. But they do not have the right to the pursuit of unhappiness. Such an ethic seems to tolerate a very wide various range of behaviours and conduct, without legitimating the neurotic's compulsions, or tolerating the addict's self-destruction. Such an ethic seems to contain an attractive amount of freedom, without admitting the abuse of freedom.

Yet this ethic still makes happiness too important. Happiness does not have to be the point of everything.

And history gives us some caution about using happiness as a social directive.

For the cult of happiness has taken unexpected turns. It has, for example, been used for a reactionary purpose. The very deliberate import of Scrope's observation at the beginning of this column was to reconcile peasants with straw roofs, not kings with smock frocks. And he was not eccentric in using the disconnection between wealth and happiness for that end. William Paley, the leading British exponent of utility in the Enlightenment, did the same. During the economic difficulties of the 1790s he penned Reasons for Contentment Addressed to the Labouring Part of the British Public. The "labouring part" were to be content, he explained, because they did not suffer the privations of the rich. Working from childhood to old age, and often from dawn to dusk, they were not pained by the boredom that afflicted the rich. And, having less than everyone else, they were not troubled by the thought that they might one day no longer have more than everyone else.

Still more perversely, the cult of happiness has been used to camouflage, decorate and even justify terror. In no society has "happiness" been a more standard item in the political vocabulary than in Stalin's Russia.

Life has become better, and happier too.
This phrase of Stalin - made in the context of forced collectivisation and mass starvation - became a catch phrase. Happiness was on everyone's lips. Stakhanov thanked Stalin for:
the happy life of our country, the happiness and glory of our magnificent fatherland.
A widely distributed poster had Stalin surrounded by small faces shouting:
Thank you, dear Stalin, for our happy childhood.
And this expression was put into song by a children's choir. Yevtushenko noted:
Almost every novel and short story had a happy ending.
Everyone was happy. It was compulsory.

I would rather entrust my happiness to personal freedom than state control.

Dr William Coleman is Reader in Economics at the Australian National University and the author of Economics and its Enemies: Two Centuries of Anti-Economics, (Palgrave Macmillan, 2002).


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Perhaps the avoidance of unhappiness is more important than the achievement of a state called "happiness" whose definition has never been agreed upon. Certainly wealth and education allow one to avoid unhappiness - starvation, boredom, sickness, death, bad movies - more surely than they bring happiness. For instance, I've always thought how bored people must be who can't read. Reading does not always, of course, bring happiness. But it is an endless fount of stimulation.

Posted by: Robert Speirs at November 30, 2005 06:57 PM
•••

The "labouring part" were to be content, he explained, because they did not suffer the privations of the rich.

Pascal would have had a field day, satirizing such Paley-o-zoic tosh. But then, Pascal's satire in the Provinicial Letters formed the tools which Voltaire used with great effect to bring down much of what Pascal loved. And as for Voltaire's satire, one only has to read the SAU blog ...

The last part of the article brings to my mind a song sung by the Red Army Choir:

Ay ty rozh ...
Schastye povstrechayetsya
Mimo nye poidyosh

Oh you rye .....
Happiness will encounter you,
You will not get past

I will now see that song in a different light.

Posted by: Robert H. Olley at November 30, 2005 08:19 PM
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I don't think that money really makes us happy, but there are some wonerful things that you can do with money!!!

Posted by: WebtrafficJunkie at November 30, 2005 09:21 PM
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'Most would prefer to be a dissatisfied human than a satisfied swine.' Were Dr Coleman living in London, he might leave the department and go out into the street, step gingerly around the puddles of sick that dot the pavements, peer into the crowd jamming almost any pub and then reconsider his remark. Perhaps such behaviour is uncommon in Australia.

Posted by: s masty at December 1, 2005 10:02 AM
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Great Article, Thank you.

I do not agree that people who try to control their lives are unhappy and people who just go with the flow are happy. I think if people set smaller goals in life then they will get happiness time and time again. Without setting any goals one becomes bored and even though the going with the flow type claim to be happy they really are not.

I also believe that health is essential which opens all possibilities but one has to keep an open mind and allow one self to be presented with opportunities to be happy.

Happiness comes from within so health is essential and a positive state of mind.

Posted by: Azam Ali at February 4, 2009 11:48 AM
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