Kieran Healy

Money and Happiness

I’m off to the ASA meetings in Chicago this morning, of which more later.

Brad DeLong has a weblog entry this morning wondering

At what level of material wealth does one become, completely, totally, utterly sated? How much stuff—how many things—how much power to buy and control does one have to have before one can say “enough is enough,” stop playing the game for increased wealth, and start playing some other, different game?

The question is provoked by a report that Rolling Stone publisher Jann Wenner stiill thinks he could do with a hell of a lot more money, despite being worth several hundred million dollars as it is.

The relationship between wealth and happiness is an old chestnut, and there seem to be two main views. The first is to say that money can’t buy happiness. Evidence for this comes either from the whining rich themselves, or (more plausibly) from research that tries and fails to find a link between money and contentment. Ronald Inglehart has done some survey work on this topic. Robert Lane recently came out with a small book called The Loss of Happiness in Market Democracies. And scholars of consumption—- notably DeGraaf et al’s Affluenza and Juliet Schor’s Overspent American—- make a good case that consuming more stuff isn’t going to make you any happier. This line of research backs up the theory best expressed in Matthew 16:26.

The second view is best expressed by Woody Allen: Money can’t buy you happiness, but it can buy you a better class of misery. (And also, “Money is better than poverty, if only for financial reasons”.) If you were offered a choice between money and happiness you would choose the latter; but if offered a choice between more money and less money you would choose the former. And who could argue with you?

Both ideas are right in some sense—- they pick out something important about our relationship to money. Both also have an ugly obverse side. From “money can’t make you happy” we can easily get to something like “poverty builds character” (usually it’s other people who are in need of this). From “money is better than nothing” we can easily get to, well, Jann Wenner’s brand of wealth-envy.

The problem seems to be that, beyond a certain point, consumption and wealth are a lot like celebrity in that they are primarily about other people. What matters is that other, poorer, people see you living your wealthy lifestyle. And like the pursuit of wealth, the phenomenon of celebrity encapsulates a double aspect of worship and resentment. I suppose an analysis along these lines would begin with someone like Veblen. (Is the idea of “positional goods” his?)

Somewhat like Fermat, I have other truly marvellous ideas on this topic, but cannot write them down here as I have to get offline and call a taxi to take me to the airport. I wouldn’t have to do this if I had enough money to pay for DSL service, of course. Or what if I just had a limo driver permanently on call… Come to think of it, why even go to the airport? I need a private jet.

I always thought that Julie Schor’s Overspent American was somewhat self-deconstructed by the book jacket author’s picture of her standing in front of her four-bedroom two-story suburban brick colonial—a house that I’d bet put here in the top 10% of Americans in housing-value-per-member-of-the-household…

>>I have other truly marvellous ideas on this topic< ,

So did Adam Smith, in his Other Book:

The poor man’s son, whom heaven in its anger has visited with ambition… admires the condition of the rich. He finds the cottage of his father too small for his accommodation…. He sees his superiors carried about in machines…. He feels himself naturally indolent, and willing to serve himself with his own hands as little as possible; and judges, that a numerous retinue of servants would save him from a great deal of trouble. He thinks if he had attained all these, he would sit still contentedly, and be quiet, enjoying himself in the thought of the happiness and tranquillity of his situation. He is enchanted with the distant idea of this felicity…. in order to arrive at it, he devotes himself for ever to the pursuit of wealth and greatness. To obtain the conveniencies which these afford, he submits in the first year, nay in the first month of his application, to more fatigue of body and more uneasiness of mind than he could have suffered through the whole of his life from the want of them. He studies to distinguish himself in some laborious profession. With the most unrelenting industry he labours night and day to acquire talents superior to all his competitors. He endeavours next to bring those talents into public view, and with equal assiduity solicits every opportunity of employment…. Through the whole of his life he pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquillity…. Power and riches… are enormous and operose machines contrived to produce a few trifling conveniencies to the body…. They are immense fabrics, which it requires the labour of a life to raise, which threaten every moment to overwhelm the person that dwells in them, and which while they stand, though they may save him from some smaller inconveniencies, can protect him from none of the severer inclemencies of the season. They keep off the summer shower, not the winter storm, but leave him always as much, and sometimes more exposed than before, to anxiety, to fear, and to sorrow; to diseases, to danger, and to death….

We are… charmed with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how every thing is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires…. The pleasures of wealth and greatness, when considered in this complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.

And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth. The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants. It is to no purpose, that the proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the oeconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for…