We argue that happiness (i.e., contentment) is the goal; everything else, including health and material well-being (money), is the means to get to that goal. So we go to Manolo Blahnik and Tesla and Lululemon and buy the next shiny thing. Even if we don’t do yoga, at least we look the part. There’s no doubt that material wealth improves subjective assessment of well-being by individuals in the short term. But not in the long term. Is that pleasure or happiness? Is that dopamine or serotonin?
Show Me the Money
Our close personal relationship with money can be summed up like this: “It’s not that I want to make more money, I just want to make more money than YOU.” We consciously or subconsciously compare ourselves with our peers, keeping up with and wanting to best the Joneses with a pricier house, car, living room furniture, and now drones. The premise is bolstered with a simple experiment. Two decades ago a group of Harvard students were asked a not-so-simple question. Which world would you prefer: a world where you get $50,000 per year while everyone else gets $25,000, or a world where you get $100,000 per year while everyone else gets $250,000? The students overwhelmingly chose the former.3 They would rather be poorer but better positioned. British economist Sir Richard Layard4 gleans two findings from this and similar experiments: (1) Your income is judged relative to others. It’s not how well you are doing, it’s how well you are doing relative to everyone else. But someone is always doing better than you: there are a lot of Warren Buffets out there. If income is a driver of well-being at all, it is short term, and is not consistent with contentment. (2) Your current income is judged relative to your previous income. Let’s say your salary is X. If you double your salary, 2X is your new income. Next year, even if you make 2X, your well-being next year is the same as you’re making X this year. The thrill diminishes. And heaven forbid your 2X salary decreases by Y (where Y is less than X); even though you will make more next year than you did last year, you will be utterly despondent.
This is not how happiness works. Comparing salaries is like taking locker room measurements. Money in the form of income has not translated into individual happiness. We’ve been programmed to earn more, but then everything in our bracket costs more, and we keep climbing to an unattainable peak. Because income is pleasure, visceral, short-lived, dopamine driven, and subject to all the excesses of tolerance and dependence, and in some cases withdrawal. The cars get bigger, but so does the credit card bill. Americans spend; it’s what we do. But it’s what you do with the money that determines happiness. Money can often be the means to the end but is rarely the end in itself.
Is Everybody Happy?
Does this apply to countries as well? Does material wealth make countries happy? Are countries with higher gross domestic product (GDP) or bigger bank accounts happier than those without? Does GDP translate into happiness? Just as contentment is different from elation, the relation between income and happiness depends on your definition of happiness.
Compared to even fifty years ago, most countries have demonstrated colossal improvements in material conditions, such as clean water, electricity, plumbing, hospitals, and antibiotics to prevent acute infectious diseases. The question is whether these social and medical improvements have improved the happiness of these countries in a significant way. If happiness increases with development, then the enhancement of material well-being should have made human beings and societies happier today than they were at the time of Aristotle. Furthermore, if material wealth were a primary determinant of societal happiness, then those countries with a higher standard of living should manifest more happiness than those with lower standards.
However, the percentage of people who identify themselves as “happy” in terms of per capita income exhibit a tenuous correlation at best, and within the thirty-seven developed countries of the Organization of Economic Co-operation and Development (OECD), not at all. Thus, just like for people, societies are not happier with higher GDP. Known as the Easterlin paradox,5 this suggests that, just as people view their income relative to others, countries do the same. Nonetheless, GDP has caught on as a measure of social advancement, to the extent that most countries today are preoccupied with the number, and more than one government has factitiously increased its estimation of GDP to make themselves appear more prosperous.6
GDP is defined by the following equation:
GDP = Production + Government + Investment + (Exports – Imports)
A high GDP infers governmental stability, but GDP is subject to manipulation by those same governments. When officials stoke the flames (as in the 2008 economic bailout), GDP can be artificially inflated, but that doesn’t mean people are happy. Conversely, if the Fed lowers interest rates, it can spur investment through borrowing, which also artificially raises GDP only by creating a more precarious economic situation. Furthermore, GDP doesn’t take into account advances in environmental pollution, or illegal drugs and prostitution, or technology (for good or bad; see Chapter 14). How do you assess GDP in light of the fact that an iPhone is cheaper than its three components (a phone, a camera, and an MP3 player)? It’s hard to assess sustainability when car sales are offset by car accidents and car exhaust, yet GDP doesn’t account for both sides of the ledger. And it’s even harder to assess sustainability and environmental damage when the food industry and the drug industry (which treats the illnesses the food caused) are lumped into one number, thus inflating GDP, while people get sicker and unhappier. It also doesn’t take into account unemployment, which is a chief cause of unhappiness. Even economist Simon Kuznets, the originator of the term, in 1929 stated, “The welfare of a nation can scarcely by inferred from a measurement of national income.” Indeed, business and government hide behind GDP precisely because it measures productivity exclusive of sustainability. Princeton economist Dirk Philipsen7 argues that GDP is exactly what is wrong with happiness. Because happiness is long-term, it infers stability and sustainability. GDP is anything but long-term, and it doesn’t necessarily improve the happiness of any country’s populace.
Recognizing the disconnect between GDP and happiness, and in order to monitor societal advancement or stagnation, social scientists have developed three separate international scales of well-being. The Prosperity Index8 is a compendium of numerous measures (both in terms of the national economy and personal well-being) that reflect the contentment of populations with their current status. America, for all of its purchasing power, and military and social clout around the world, ranks number eleven out of 142 countries on the Prosperity Index. Given our number one economic standing and quality of life, this is a pretty poor showing. Note that countries with monetary resources don’t necessarily score high. Saudi Arabia has oil, Nigeria has diamonds, and they score 45 and 125, respectively. A second scale, the World Happiness Report,9 takes into account indices that measure the following: real (inflation-corrected) GDP per capita; life expectancy; having someone to count on; perceived freedom to make life choices; freedom from corruption; and individual generosity. Here the U.S. scored number seventeen out of eighty-five countries, and also demonstrated the eleventh-largest drop in the last seven years. A third scale, known as the Happy Planet Index,10 takes into account only issues of well-being (life satisfaction, longevity, ecological footprint). There, America does even worse, scoring 105 out of 111 countries. So, the data say we’re prosperous, but not happy.
The country of Bhutan has embraced the concept that the role of government is to provide a fertile ground for happiness to flourish. They have eschewed GDP as a measure of societal advancement and now utilize the Gross Happiness Index to determine how it is faring as a society. Bhutan may be a backwater in terms of economic power, but it puts its stock in its people. Perhaps it is because it has a lower standard of living that it is able to focus on the happiness of its citizens. Or perhaps, because Bhutan is a Buddhist nation, it doesn’t focus its efforts on the dopamine-driven pathways of its citizens but rather on those that are mediated through serotonin.
Alternatively, you might think that happiness would correlate with economic indicators. You’d be wrong. Take a look at the Prosperity.com website or the U.N. Sustainable Development Solutions Network (SDSN)
Alternatively, we might assume that lack of war is a marker of societal bliss. But, as demonstrated by ancient and recent history, these periods are few and far between. Perhaps only Switzerland can boast a history without war. And that’s more geographic than historic—because, perched up in the Alps, they’re kind of hard to attack. And there’s plenty of money. Swiss bank accounts are legendary, as they are tax-free, and Switzerland ranks number two on the mean gross income list. And heaven knows they’ve got plenty of pleasures to be had, for which they are famous. Switzerland rates close to the top of the Prosperity Index.11 Considering the U.S. contributes 25 percent of the global GDP, eleventh isn’t a very good showing.
I Can’t Get No . . . Satisfaction
These data argue that material wealth is really a reward-driven parameter, not one indicative of level of contentment. Most of the books that have been written on the relation between money and happiness conflate the two phenomena of reward and contentment together, into one that is commonly referred to as “subjective well-being.” But is that true? University of Michigan economists Betsey Stevenson and Justin Wolfers have attempted to discredit the Easterlin paradox on the basis of finding a logarithmic (i.e., curved) rather than a linear relationship between income and subjective well-being;12 in other words, each extra dollar is worth slightly less in happiness than the dollar that came before, but there is no obvious ceiling. However, I think that these studies suffer from the same misconception: that, as currently defined, subjective well-being is a meaningful indicator of happiness. How is this question asked of people? There are two ways. The World Values Survey asks, “All things considered, how satisfied are you with your life as a whole these days?” Really? That’s supposed to give you an indicator of happiness? The Gallup World Poll asks people to imagine the ladder of life, and which rung they are on. Sounds more like the relative income problem to me.
There is one paper that I think got it right. Instead of lumping, Nobel Prize winners Daniel Kahneman and Angus Deaton examined single individuals rather than in aggregate and, based upon their responses, split happiness into two separate experiences.13 One phenomenon is equivalent to “life satisfaction,” which they describe as “the thoughts that people have about their life when they think about it,” such as prosperity and influence (likely mediated through actions that drive dopamine). Using this definition (i.e., at peace with your status in life), one can see a very clear correlation with income, as more money means increased access to services and technology that make life easier (dishwashers, dry cleaners, Amazon Prime). Money can be spent on what matters to the individual, from gadgets to Gucci. However, they also quantified the second phenomenon of contentment, “the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant” (equivalent to our definition of eudemonia, or our biochemical definition of serotonin effect). Using this definition, contentment demonstrated a logarithmic relationship with income until a maximum of $75,000. After that, the relationship disappeared. Once needs were met, more income did not generate more contentment. It would appear that the acquisition of stuff and property beyond the basics doesn’t up your Zen quotient.14 The pursuit of property is not the pursuit of happiness. In fact, it can just leave you wanting more.
Kahneman and Deaton provide us with evidence of how the biochemistry plays out in real life: that reward is not contentment, and that increasing reward does not translate into happiness. By pursuing the dollar, Americans have certainly not become content; and by pursuing GDP, America has become derelict in one of its three primary aspirations—the pursuit of happiness.
13.
Extreme Makeover—Washington Edition
Corporations are people. So said the U.S. Supreme Court in the now-infamous decision Citizens United v. Federal Election Commission (2010). Well, corporations have a fiduciary responsibility to their stockholders. People have a fiduciary responsibility to themselves and their family. That’s not quite the same thing. Also, corporations don’t have serotonin, or dopamine, or a Jiminy Cricket. All they have is a balance sheet. This case has been pilloried in the popular press and in public opinion as selling America to the highest bidder. But this case wasn’t a fluke. The triumph of corporations over individuals represented by Citizens United is the culmination of a forty-five-year-long war fought in the halls of Congress and the aisles of Walmart. Yet, unlike the survivors of a war with weapons, our citizens don’t even know that a war was fought, or that it even matters. Corporations now have a legal right to interfere with your pursuit of happiness. The history of the law is just as important as the science in explaining how we got to where we are, and how to move forward—which is why I went to law school.
The Balance of Power
The United States is home to both individual rights and corporate rights. The balance of power between individuals and corporations has always been precarious, one that has exhibited a sinusoidal wave up and down for the first two hundred years of our existence, based on the parity built into the Constitution (thank you, James Madison) and the Bill of Rights (thank you, George Mason!). Since the inception of our nation, corporations have often attempted to tip the scale to usurp control over individual rights, but in each successive era the scale has been rebalanced by the political process. For instance, in the 1870s the robber barons of the steel, oil, and railroad industries and the national banks wielded virtually unlimited power and money. To beat back the threat of monopolization, Congress passed the Sherman Anti-Trust Act in 1890, and in the early 1900s, Teddy Roosevelt was able to effectively constrain the growth in corporations and banks. After the squalor and danger of slaughterhouses and the meat industry were laid bare by Upton Sinclair in The Jungle (1906), Congress was pressured to charter the FDA to protect the nation’s food supply. After the infamous Triangle Shirtwaist Factory fire of 1911 in lower Manhattan, Congress established the Federal Trade Commission in 1914 to protect consumers and prevent child enslavement. In the 1920s, the next wave of private speculation by companies (such as what happened in the Teapot Dome bribery case) led to “irrational exuberance” and ushered in t
he Great Depression in 1929. The economic havoc was countered in the 1930s by Franklin Roosevelt’s enactment of the New Deal and the Works Progress Administration to get people working again. FDR also established the Federal Deposit Insurance Corporation in 1933 and the Securities and Exchange Commission in 1934 to protect individuals from corporate abuse. World War II in the 1940s and the Korean War in the 1950s, along with Joseph McCarthy’s communist witch hunts, rolled back individual rights yet again. Then, in the 1960s, Rachel Carson’s Silent Spring (1962) exposed corporate contamination of the environment, and Ralph Nader’s Unsafe at Any Speed (1965) birthed the consumer rights movement. Both books pushed the scale toward the rights of the people, culminating in the establishment of the Environmental Protection Agency and the Occupational Safety and Health Administration in 1970. Has the undulation made you seasick yet?
But the ebb and flow of individual versus corporate power has now ceased. Since 1971 there has been a slow, ever-steady creep of usurpation of power by corporations, with a concomitant loss of power from individuals. Look, I am not espousing socialism or communism or any other “-ism.” But the balance of power has so shifted in favor of the rights of corporations that individuals are losing, and in ways that are opaque to them. They have more consumer choice, so they think they have more rights, but in fact they have far fewer. This shift in the balance of power can in part be traced, as documented by City College sociologist Nicholas Freudenberg,1 to the tenure of one particular American—U.S. Supreme Court associate justice Lewis F. Powell Jr.
The Hacking of the American Mind Page 16