Essay On Is Wealth A Prerequisite For Happiness

The important point here is that ''happiness'' is too vague and baggy a notion to be truly helpful. It is like an old pair of knickers that has lost its elastic and become over-capacious and shapeless.

Instead of talking about happiness, one should talk about satisfaction, achievement, interest, engagement, enjoyment, growth and the constant opening of fresh possibilities.

Very often the activities that yield these things are challenging, even effortful. A person in the midst of doing something objectively worthwhile might not describe himself as happy - usually he will be too absorbed to notice - and only later will realise that what it is to be happy is to be absorbed in something worthwhile.

If mere happiness were the point, we could easily achieve it for everyone by suitably medicating the water supply. But it has often been well said that the surest way to unhappiness is to seek happiness directly. Instead, happiness comes as a sideline of other endeavours that in themselves bring satisfaction and a sense of achievement.

It is like the dot of light in a dark room that one cannot see when looking directly at it, but notices out of the corner of one's eye on looking away.

The other confusion concerns wealth. If a person has a million pounds in the bank and never touches a penny of it, or a huge mansion and never occupies it, it is the same as if he had neither the money nor the house. What this shows is that wealth is not so much what one has, but what one does with it.

A man who has a thousand pounds and spends it on a wonderful trip to the Galapagos Islands is a rich man indeed: the experiences, the things learnt, the differences wrought in him by both, are true wealth.

If you would like to know how rich a person is, you need to ask not how much money he has, but how much he has spent.

This idea is associated with the wise teaching that the philosophers and poets of antiquity never tired of repeating: that a rich person is he who has enough.

If his needs are modest and his habits frugal, then so long as his resources provide enough to meet both, he is rich.

But the man is poor who, despite owning millions, restlessly yearns for more because he feels he cannot have enough, and in particular who lacks the things money cannot buy - ah yes, for these unpurchasable treasures can never be left out of the picture: friendship, love, a sound digestion and a reliable, natural ability to sleep at nights, are indispensable to the possibility of happiness, if not directly supplying it.

In thinking about happiness and wealth, one should avoid using the words ''happiness' and ''wealth'', and think instead of more accurate and more substantial words that denote what one truly thinks these things are.

To mention satisfaction and achievement is to suggest activity of some kind - doing and making, helping, learning, changing - which might seem obvious to most, but is chosen by surprisingly few.

Ruskin tellingly remarked ''a man wrapped up in himself makes a very small parcel'', and this, alas, characterises too many people. The limited surface area of such parcels does not attract much of the golden dust of satisfaction.

The true equation between happiness and wealth is this: that happiness is wealth. Unlike wealth in the form of money and possessions, such happiness can never be quantified, only felt; and if one has it, it does not matter if the level of it always stays the same.

  • A C Grayling is professor of philosophy at Birkbeck College, University of London

Does money buy happiness?

Wealthier people are happier than poor people. Wealthier countries are happier than poor countries. As countries get ­richer, they get happier. The relationship between income and happiness is extremely strong.

What’s the nature of that connection? Does money actually make you happier?

I should give the usual “correlation isn’t causation” disclaimer here. When I say rich people are happier than poor people, I don’t know if it’s the money that’s making them happy. When I say rich countries are happier than poor countries, I don’t know whether it’s the greater money that makes the average American happy or whether it’s the greater opportunities. Maybe it’s democracy, rule of law, or having functioning markets and political and social institutions.

Saying richer countries are happier than poorer ones seems obvious. Has other research found otherwise?

There’s something called the Eas­terlin paradox [named after University of Southern California professor Richard Easterlin], which claimed that while rich people are happier than poor people, rich countries are not happier than poor countries, and as countries got richer, they did not get happier. Now, what we [Wolfers and fellow University of Michigan professor Betsey Stevenson] did was study more comprehensive data. We looked at ­surveys, including the Gallup World Poll, of 155 countries covering 95% of the world’s population. It turns out that rich countries are indeed happier than poorer ones, and as countries get richer, they get happier.

[Easterlin says that Wolfers has mischaracterized his findings, and that his paradox indeed asserted that rich countries are happier than poor ones. Easterlin also says that while happiness and income are correlated over short-term periods, the relationship disappears over the long run.]

Psychologist Daniel Kahneman and economist Angus Deaton, also drawing on Gallup data, famously concluded that happiness doesn’t really increase above incomes of $75,000 a year. How do you square that with your research?

Whenever people talk about happiness, they are imprecise in their language. I’m mostly analyzing questions that ask you how you think about your life overall, or how happy you are, taking all things together. These are questions that we think of as being “evaluative.”

The $75,000 number comes instead from measures of affect. Rather than being evaluative, they gauge what’s going on with you right now. They say, “How did you feel ­yesterday?” This is not asking you to judge your life as a whole. And Kahneman and Deaton found at very high incomes more money did not increase well-being. The increases above $75,000 were vanishingly small.

Back to your research: Is the relationship between money and happiness linear? Will I feel the same jump in happiness with each $1,000 raise?

No. If you think about how much extra well-being is associated with each dollar, it’s absolutely a situation with diminishing returns. But if you describe it in terms of the percent change in income, a 10% rise yields a roughly similar rise in well-being to everyone in the world. A 10% increase in a very poor country like Burundi is equivalent to a 10% increase in a very rich country like the U.S.  But to get a 10% increase in ­Burundi doesn’t take a lot of dollars, whereas in the U.S. it takes a lot.

The U.S. economy has grown a lot since the 1970s, but you’ve found that happiness here hasn’t increased much. How can that be?

I never said that the only thing that changes happiness is income growth. Something else is going on in the U.S.

Average per capita income has grown, but that can be misleading. If you look instead at the median—the income of someone making less than what half the population makes and more than what the other half does—income has barely risen over the past 40 years, once you adjust for inflation. Income has actually fallen for those at the lower end of the scale. If income has barely grown for most people, we shouldn’t be surprised that happiness has barely grown for most people.

So how can we fix that?

We can do it through the minimum wage or the tax system. We can do it through the benefit system as well. Things like the earned income tax credit. Remember, an extra dollar doesn’t buy much extra happiness for a millionaire, but it buys quite a lot for a working-class person.

Raising the federal minimum wage is politically difficult. So is making the tax system more progressive.

Compulsory education up to an age older than 16 could also work. Research shows that education and skills not only increase income later in life but also increase happiness.

What about the personal implications of your research? Are you happier now that you make more money than you used to?

Unquestionably, yes. When I was in graduate school and I went into a store, I was always looking at the prices. I was constantly calculating. You ask yourself, “Can I afford to buy this box of cereal?” You think, “If I buy more of this, maybe I can afford less of that.” You’re making these tradeoffs and you’re constantly aware of these ­tradeoffs. And it’s tiring.

The first thing I did when I had a well-paying job is I stopped looking at those price tags. Now I never really feel stressed about money. Even if I lost my job tomorrow, I have my degree, and I can get another job. I get to live free from stress and worry and the constant calculating of tradeoffs that I had earlier in my career.

So would I be happier if I became a hedge fund manager?

Don’t let an economist bully you into believing money’s all that matters. And don’t let a psychologist bully you into believing that money is completely unimportant. How you manage that tradeoff is going to require a lot of experimenting and thinking and introspection. People choose occupations based not just on money, but also on meaning. There’s nothing in my research that says that’s a bad idea.

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