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Russell Collins: Money Cannot Buy Happiness, Right?
The avenues running near the town center of Rurrenabaque, Bolivia, are lined with shops and booths where you can buy everything from woven handbags, CD players and Lakers hats, to bico for chewing with the coca leaves sold in gallon baggies at the river dock just a few blocks away.
But outside the square mile or so of Rurre’s commercial area, the roads are unpaved. Dogs and chickens zigzag through the little backyards, scrounging for food around the wood-and-tin huts that are packed together along the road.
It was on one of these rut-filled roads, watching a gang of kids kicking a soccer ball in the heat, that our 10-year-old son, Jacob, looked up at us and made this pronouncement: “They hardly have anything, but they’re happy.”
That was more than five years ago, but still I remember feeling more than a little proud. After all, it takes a wise soul to know what money can’t buy.
The topic of happiness and money has been getting a lot of attention lately, and not just because people are so unhappy about losing so much money. Economists are increasingly turning to psychology to get a handle on the movement of money and markets — how the quirks of human perception affect our behavior around money. And among the questions these researchers ask is: Does money make people happy, or, more specifically, does more money make people more happy?
Until recently, there was some widely accepted research to back Jacob’s assertion that money can’t buy happiness. The “happiness paradox,’’ as it’s sometimes called, has been the conventional wisdom among social science experts since economist Richard Easterlin proposed it back in the 1970s. The basic idea is that a sense of well-being in advanced countries does not increase over time, and even declines, in spite of the rising trend of personal income. A whole lot of follow-up research has been done in support of Easterlin’s hypothesis. Typical is a study published in the The Journal of Happiness comparing happiness among rural and urban Chinese. It’s called “Peace in a Thatched Hut — That Is Happiness.”
Jacob’s thesis, almost verbatim!
But last year, University of Pennsylvania economists Justin Wolfers and Betsey Stevenson published a comprehensive new analysis of the happiness data, and came to the opposite conclusion:
» In a given country, rich people are happier than poor people.
» Richer countries are happier than poorer countries.
» As countries get richer, they tend to get happier.
Money can buy happiness, then, if you buy what Wolfers and Stevenson have to say. And their study is getting a lot of attention from economists and policymakers.
This is not only bad news for Jacob, it’s terrible news for those of us who have built our value systems and our lives around a different idea: happiness results from a life balancing nonmonetary objectives like wisdom, kindness, emotional awareness and spiritual growth. If money makes you happier, shouldn’t we all just pile into real estate?
In defense of a more humanistic understanding of happiness, I would like to challenge the new research that says money buys happiness, at any level. My tool for this task won’t be statistical analysis (not a personal strength) but rather a mental exercise.
First, you need to understand that this research on happiness is based on self-report data — which more-or-less means a researcher asking people how happy they are. Now, imagine yourself in this situation:
A young research assistant approaches you on the street and asks how happy you are on a scale of -10 to +10. You search your memory, and you say to yourself: Well, I was happy this morning when I woke up. I’ll give myself a +7. I was looking forward to waffles (+4), but we were out of eggs and I had an argument with my spouse (-3). I then drove to work in our new Volvo sedan with surround sound (+6). At work, I got a compliment on my report to the executive committee (+8), then on my way out to lunch I noticed a deep scratch in the hood of the Volvo (-20!!!). As I pulled into the drive at the end of the day, Fluffy, our old Golden Lab, barked out her usual loving welcome from the window (+3).
Pretty quickly, you realize that looking at your moment-to-moment impressions doesn’t give you a fixed point of reference. You’re all over the map! The eager young researcher, meanwhile, is starting to look around for a less indecisive subject. So you cast about quickly for a measure more stable and consistent than your ever-shifting moods. Where do you look? For most of us, we look at our stuff.
By stuff, I mean more than just your physical possessions. I mean all the external symbols of happiness and success, including your job, your roster of friends, your bill of health, your family portrait, your education, your retirement account ... and, of course, your physical stuff, too, especially anything larger than a golf cart.
If the measure of your happiness is actually a measure of your stuff, it doesn’t take an economist to figure out that people with more stuff (including really important stuff like your health) have more money. Money buys stuff.
So, using statistics to prove that more money makes people happier may be a circular argument. But it’s worse than that. To equate happiness with money is a catastrophic failure of the imagination that leaves us forever chained to the treadmill of acquisitiveness. Unhappy? Work harder to get more stuff. Happy? Acquiring more wealth and prestige will make you happier still. So to insist that money can never buy happiness (as my parents insisted to me, and I will continue to insist to Jacob) is simply to resist the small-minded tyranny of materialism. Looked at this way, it’s not even a researchable subject: it’s a philosophy of life.
Having said that ... There are some researchers on the other side, as well. One of those is Richard Davidson at the Laboratory for Affective Neuroscience at the University of Wisconsin. Davidson has run brain scans on Tibetan monks who specialize in a kind of meditation called Meta, or ‘loving-kindness” meditation.
Each of these monks has spent at least 10,000 hours meditating and praying for the well-being of their fellow humans, and, in fact, for all the creatures of the world. As Davidson interprets these brain scans, the monks are far happier than the rest of us.
And when they are actually engaged in their meditative practice, their measurements are so high, Davidson’s equipment can barely keep track of them. There is good news for the rest of us, too: some basic training in loving-kindness meditation moves people up Davidson’s scale of happiness fairly quickly.
There are many ways to interpret Davidson’s research, and plenty of reason to be skeptical. But for me, it reinforces Jacob’s basic instinct back in the rutted, jungle-side roads of Rurre: Despite our most earnest attempts to analyze it, understand it and package it up for sale, happiness remains a mysterious commodity, both priceless and free.
— Russell Collins is a Santa Barbara psychotherapist and divorce mediator. Click here for more information.
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» on 04.23.09 @ 05:12 AM
Russell, thank you for this article. We have been working with many veeeery wealthy executives throughout the years, and have found that they are as happy or as miserable as the average individual.
I have found a correllation between wealth and empowerment, which I believe is often mistaken for “wealthy people are happier”. But working with people in the financial markets, I see every day that they are grappling with the same issues than the not-so-wealthy. ...in the recent case of Fanny Mae’s CFO, to the point of suicide.
In that sense: thank you for this article.
Peter
http://www.consciousbusinessinstitute.com
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» on 04.23.09 @ 05:15 AM
Great article. Made me happy…
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» on 04.23.09 @ 11:16 AM
Peter, It was the CFO of Freddie Mac, a friend of mine and a really great guy. Also, Fanny Mae is Fannie Mae it is not the candy company.
Hopefully, the lesson learned here is that happiness cannot be found in the number of wigets you have and the amount of power you have accumulated. Friends, family and the simple things in life are the key. Maybe the American materialism drive will learn a lesson and slow down just a little? Instead of shopping go camping or go to the beach or try something new.
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» on 04.23.09 @ 03:35 PM
I suspect you have not even come close to losing your house because of a loan interest increase that you can’t afford. Having recently come very close to foreclosure and then slipped out with a great deal of luck and effort, I can tell you of many sleepless nights and suicidal thoughts ... that have gone away with now enough money to cover the mortgage. From desperation to reasonably happy, thanks to money.
I would offer that a 10-year-old American looking at some Bolivians playing kickball has no way whatsoever of going beyond the superficial appearances and judging the level of happiness or not, beyond the instants of ball playing.
True, no doubt, that $millions don’t buy happiness but having enough money to afford food and housing (and a little left over for pleasures) - and not having to work night and day, 6 or 7 days a week for it - does indeed buy happiness. That freedom is being rich ...and free. I would suggest to those who deny it to try living for a month or more, longer, anyway, than a couple of days or weeks, here or in any American city, not knowing if you’ll be able to having house or food the next day.
To deny it is to deny the reality of millions of people, to be part of the class, willing blinders problem that afflicts this and most countries in the world.
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