david_g_myers's picture
Professor of Psychology, Hope College; Co-author, Psychology, 11th Edition
The Disconnect Between Wealth and Well-Being: It's Not the Economy, Stupid

Does money buy happiness? Few of us would agree. But would a little more money make us a little happier? Many of us smirk and nod. There is, we believe, some connection between fiscal fitness and emotional fulfillment. Most of us tell Gallup that, yes, we would like to be rich.

Three in four entering American collegians — nearly double the 1970 proportion — now consider it "very important" or "essential" that they become "very well off financially." Money matters.

Think of it as today's American dream: life, liberty, and the purchase of happiness. "Of course money buys happiness," writes Andrew Tobias. Wouldn't anyone be happier with the indulgences promised by the magazine sweepstakes: a 40 foot yacht, deluxe motor home, private housekeeper? Anyone who has seen Lifestyles of the Rich and Famous knows as much. "Whoever said money can't buy happiness isn't spending it right," proclaimed a Lexus ad.

Well, are rich people happier? Researchers have found that in poor countries, such as Bangladesh, being relatively well off does make for greater well-being. We need food, rest, shelter, social contact.

But — the underreported story in our materialistic age — in countries where nearly everyone can afford life's necessities, increasing affluence matters surprisingly little. The correlation between income and happiness is "surprisingly weak," observed University of Michigan researcher Ronald Inglehart in one 16 nation study of 170,000 people. Once comfortable, more money provides diminishing returns. The second piece of pie, or the second $100,000, never tastes as good as the first.

Even lottery winners, those whose income is much higher than 10 years ago, and the very rich people — the Forbes’ 100 wealthiest Americans surveyed by University of Illinois psychologist Ed Diener — are only slightly happier than the average American. Making it big brings temporary joy. But in the long run wealth is like health: Its utter absence can breed misery, but having doesn't guarantee happiness. Happiness seems less a matter of getting what we want than of wanting what we have.

Has our collective happiness floated upward with the rising economic tide? In 1957, when economist John Galbraith was about to describe the United States as the Affluent Society, Americans’ per person income, expressed in today's dollars, was $8700. Today it is $20,000. Compared to 1957, we are now "the doubly affluent society" — with double what money buys. We have twice as many cars per person. We eat out two and a half times as often. Compared to the late 1950s when few Americans had dishwashers, clothes dryers, or air conditioning, most do today. So, believing that it's very important to be very well off, are we now happier ?

We are not. Since 1957, the number of Americans who say they are "very happy" has declined from 35 to 32 percent. Meanwhile, the divorce rate has doubled, the teen suicide rate has nearly tripled, the violent crime rate has nearly quadrupled (even after the recent decline), and depression has mushroomed. These facts of life explode a bombshell underneath our society's materialism: Economic growth has provided no boost to human morale. When it comes to psychological well being, it is not the economy, stupid.

We know it, sort of. Princeton sociologist Robert Wuthnow reports that 89 percent of people say "our society is much too materialistic." Other people are too materialistic, that is. For 84 percent also wished they had more money, and 78 percent said is was "very or fairly important" to have "a beautiful home, a new car and other nice things."

But one has to wonder, what's the point? "Why," wondered the prophet Isaiah, "do you spend your money for that which is not bread, and your labor for that which does not satisfy?" What's the point of accumulating stacks of unplayed CD's, closets full of seldom worn clothes, garages with luxury cars — all purchased in a vain quest for an elusive joy? And what's the point of leaving significant inherited wealth to one's heirs, as if it could buy them happiness, when that wealth could do so much good in a hurting world?