Fri Aug 16, 2002

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.