January, 2012
Mainstream economics is about enabling people to lead a prosperous life; it’s about telling the community how to be more efficient in its use of scarce resources, with the objective of raising our material standard of living. But is a prosperous life a good life? Not necessarily. So what’s the relationship between prosperity and a good life? Or, to put the question in its classic form, does money buy happiness? The answer from the rapidly growing body of research into happiness, by a lot of psychologists and a few economists, is: yes it does - but only up to a point. I guess it must be possible to be poor but happy, but surveys suggest most people living below some minimum level of income aren’t particularly happy. Poverty doesn’t have a lot to recommend it.
But once people in affluent countries such as Australia reach an adequate but reasonably frugal standard of living, the surveys show that the ability of an extra $1000 of annual income to make people happier falls away surprisingly rapidly. For those of us who aren’t poor, acquiring extra money yields progressively less and less value for money.
Why does more money do so little to make us happier? Psychologists offer two main explanations. First, because humans adapt so readily to their changed circumstances. A new car, a new house, a new dress or a promotion does make us happier - as we expected it would - but usually within a few weeks the new thing becomes part of the status quo, leaving us little happier than we were. Second, it seems clear that what makes us happier is not having more money so much as having more money than other people, particularly those people you usually compare yourself with. It’s not absolute increases in our income that matter to us but relative increases. And relative increases are harder to come by, as well as leaving those whose incomes we overtake feeling less happy.
But if acquiring more money is such an ineffective way to improve our happiness, why do so many of us keep pursuing money? Partly because research shows we’re quite bad a predicting the extent to which events we hope for - or events we dread - will make us feel good or bad. We’re like a donkey chasing a carrot - we don’t have much in the way of a learning curve. Some scientists suggest our evolution as a species has programmed us to believe a little more money will finally make us happy because there must have been some point in our evolution where working hard contributed to our survival as a species. Whether or not that’s true, many of us do seem to have an inbuilt tendency to pursue money at the expense of things that actually contribute a lot more to our happiness - our relationships being the prime example - so there is a need for many of us to put more conscious effort into controlling our materialist urges.
We’re supposed to be talking about the good life, but I’ve switched to talking about happiness. Is pursuing happiness - or even achieving happiness - the same as living a good life? That depends on what you take happiness to mean. I usually talk about happiness because, as a journalist, I know it’s an attention-getting word, but it’s quite an ambiguous word. I suspect that much of the debate about whether the modern preoccupation with happiness is a good or bad thing arises from people attaching different meanings to the word.
If by happiness you mean hedonism - the pursuit of pleasure and the avoidance of pain - then, no, happiness is not synonymous with a good life. What I mean by happiness is not the pursuit of pleasure, nor even contentment (except in the sense that we’re content with our present level of material affluence). A word that comes closer to it is fulfilment - living a life we can look back on with a degree of satisfaction, and without too many regrets. To some people’s minds happiness is associated with smugness - I’m alright, Jack. But, to me the highest level of happiness - which I’m happy to label the good life - is a life with a lot of concern for others, starting with our nearest and dearest but going further to the less fortunate. Happiness isn’t a euphemism for selfishness, and preoccupation ourselves and our own needs is a bad way to achieve happiness.
Unless you’re old or bedridden, the good life is active rather than passive. There is plenty of room for ambition and striving in the good life - depending on your motive for all the ambition and striving. A good life will have its share of setbacks and sadness and even anger - not to mention its share of hard work.
