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Happiness, Money, and Giving It Away

Peter SingerPeter Singer is Professor of Bioethics at Princeton University. His books include Writings on an Ethical Life and One World. His most recent book, co-authored with Jim Mason, is The Way We Eat: Why Our Food Choices Matter. His last piece on Webdiary was The Ethics of Eating

by Peter Singer

Would you be happier if you were richer? Many people believe that they would be. But research conducted over many years suggests that greater wealth implies greater happiness only at quite low levels of income. People in the United States, for example, are, on average, richer than New Zealanders, but they are not happier. More dramatically, people in Austria, France, Japan, and Germany appear to be no happier than people in much poorer countries, like Brazil, Colombia, and the Philippines.

Comparisons between countries with different cultures are difficult, but the same effect appears within countries, except at very low income levels, such as below $12,000 annually for the US. Beyond that point, an increase in income doesn’t make a lot of difference to people’s happiness. Americans are richer than they were in the 1950’s, but they are not happier. Americans in the middle-income range today – that is, a family income of $50,000-$90,000 – have a level of happiness that is almost identical to well-off Americans, with a family income of more than $90,000.

Most surveys of happiness simply ask people how satisfied they are with their lives. We cannot place great confidence in such studies, because this kind of overall "life satisfaction" judgment may not reflect how much people really enjoy the way they spend their time.

My Princeton University colleague Daniel Kahneman and several co-researchers tried to measure people’s subjective well-being by asking them about their mood at frequent intervals during a day. In an article published in Science on June 30, they report that their data confirm that there is little correlation between income and happiness. On the contrary, Kahneman and his colleagues found that people with higher incomes spent more time in activities that are associated with negative feelings, such as tension and stress. Instead of having more time for leisure, they spent more time at and commuting to work. They were more often in moods that they described as hostile, angry, anxious, and tense.

Of course, there is nothing new in the idea that money does not buy happiness. Many religions instruct us that attachment to material possessions makes us unhappy. The Beatles reminded us that money can’t buy us love. Even Adam Smith, who told us that it is not from the butcher’s benevolence that we get our dinner, but from his regard for his self-interest, described the imagined pleasures of wealth as "a deception" (though one that "rouses and keeps in continual motion the industry of mankind").

Nevertheless, there is something paradoxical about this. Why do governments all focus on increasing per capita national income? Why do so many of us strive to obtain more money, if it won’t make us happier?

Perhaps the answer lies in our nature as purposive beings. We evolved from beings who had to work hard to feed themselves, find a mate, and raise children. For nomadic societies, there was no point in owning anything that one could not carry, but once humans settled down and developed a system of money, that limit to acquisition disappeared.

Accumulating money up to a certain amount provides a safeguard against lean times, but today it has become an end in itself, a way of measuring one’s status or success, and a goal to fall back on when we can think of no other reason for doing anything, but would be bored doing nothing. Making money gives us something to do that feels worthwhile, as long as we do not reflect too much on why we are doing it.

Consider, in this light, the life of the American investor Warren Buffett. For 50 years, Buffett, now 75, has worked at accumulating a vast fortune. According to Forbes magazine, he is the second wealthiest person in the world, after Bill Gates, with assets of $42 billion. Yet his frugal lifestyle shows that he does not particularly enjoy spending large amounts of money. Even if his tastes were more lavish, he would be hard-pressed to spend more than a tiny fraction of his wealth.

From this perspective, once Buffett earned his first few millions in the 1960’s, his efforts to accumulate more money can easily seem completely pointless. Is Buffett a victim of the "deception" that Adam Smith described, and that Kahneman and his colleagues have studied in more depth?

Coincidentally, Kahneman’s article appeared the same week that Buffett announced the largest philanthropic donation in US history – $30 billion to the Bill and Melinda Gates Foundation and another $7 billion to other charitable foundations. Even when the donations made by Andrew Carnegie and John D. Rockefeller are adjusted for inflation, Buffett’s is greater.

At a single stroke, Buffett has given purpose to his life. Since he is an agnostic, his gift is not motivated by any belief that it will benefit him in an afterlife. What, then, does Buffett’s life tell us about the nature of happiness?

Perhaps, as Kahneman’s research would lead us to expect, Buffett spent less of his life in a positive mood than he would have if, at some point in the 1960’s, he had quit working, lived on his assets, and played a lot more bridge. But, in that case, he surely would not have experienced the satisfaction that he can now rightly feel at the thought that his hard work and remarkable investment skills will, through the Gates Foundation, help to cure diseases that cause death and disability to billions of the world’s poorest people. Buffett reminds us that there is more to happiness than being in a good mood.

Copyright: Project Syndicate, 2006.



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It's all in the packaging

Hey, Martin! Yes, indeed, I remember your Webdiary article. I even contributed a comment. This was part of it:

‘Since our drift away from the natural world and into urbanised societies, human society has devolved into a harsh worldwide political system, in which rich men dominate poor men, men dominate women, adults dominate children, and humans dominate nature …

In such a system – whether it is a marriage, a family, a school, a government, a corporation – the dominators can never be fully happy because they live in fear of retribution, while the dominated can never be fully happy because they have little control over their lives.

As the dominator system is basically unnatural, it will eventually either collapse or gradually wane – either through one war too many or because it is economically unsustainable. We humans really don’t have much of a choice anymore – either we find our way back to the natural order or we perish from a collective broken heart.’

Just a few more thoughts …

Re your point about society’s mixed messages – that ‘money does not bring happiness, and that money does bring happiness’, I tend to think that, when people refer to ‘money’ as a means to happiness, they are really referring to the natural distribution of resources. When there is a reasonably fair and equal distribution of access to what nature provides – human and environmental – the outcome for that society is ongoing happiness. When that balance gets distorted, the outcome is unhappiness, and the inevitable by-product of this unhappiness is ongoing war and social unrest.

The constant pre-occupation with happiness in wealthy societies – such as today’s struggle for ‘fulfillment’, and aspirations to ‘glory’ and ‘duty’ in past times – is really an attempt to process the ongoing inequality of access to natural resources into a more socially palatable format. Hence, the constant contradictory cultural messages today about whether money does or does not bring happiness.

I don't think there is any more or less happiness around today. It's still the same old pursuit, but wrapped in a different packaging.

Happiness defined and located

I don't read surveys about happiness. I just look at the faces of people. It seems to me that most people are at least less happy than they could be.

I believe that happiness consists of:

  1. Security
  2. Appreciation
  3. Enjoyment
  4. Creativity
  5. Fulfilment

In Australia, the goal seems to be security and money. Security - point 1 - is the precursor to happiness. Presumably, money is supposed to bring about points 2-5 i.e. appreciation, enjoyment, creativity and fulfilment. As the local liquor store employee informed me, "John Howard is good for security and Peter Costello is good for the economy, so we shouldn't change anything."

Jane, the govt and lifestyle TV shows are giving 2 messages - that money does not bring happiness, and that money does bring happiness. This mixed message creates confusion. People waste time thinking about money and its effects rather than about the happiness that money is supposed to bring (or not bring).

I agree that money is about power - keep people competing against each other for money and you have the successful divide and rule principle.

Gathering extra money is often about building stronger walls rather than for creating greater happiness. Yet we need good relationships to be happy.

BTW, I have an article on webdiary about happiness here: http://webdiary.smh.com.au/archives/margo_kingston/001275.html

It's not the money - it's the power

There is little correlation between money and happiness. But there is a huge correlation between money and power. In fact, people accumulate money in order to achieve power, not to be happy. Same goes for countries.

The big problem with all these articles about the relationship between money and happiness is that they focus on the top end of the spectrum – the level at which the law of diminishing returns sets in – and inevitably deduce that more money doesn’t bring more happiness.

These ever so worthy articles almost never focus on the lower end of the spectrum, to ascertain whether the lack of money creates a lack of happiness – the inevitable by-product of powerlessness.

I suspect more than a touch of propaganda in the recent proliferation of ‘money versus happiness’ and ‘sea-change’ trend articles and book genres. They are more symptomatic of Australia’s increasing shift to a user-pays society, due to the erosion of social funding policies under the Howard (and Keating) governments, rather than any altruistic desire to reject the trappings of wealth. On the contrary, Australia's kow-towing to competitive greed has become downright pathological.

By convincing their populations that money doesn’t bring happiness, governments can then absolve themselves of all social responsibility. After all, if the poor have no reason to feel miserable, then the rich have no reason to feel guilty.

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