Wealth & Happiness
Surveys have indicated that although citizens of the United Kingdom earn double the income they earned forty years ago, they find themselves less happy. There is no shortage of fables that support this story -- from Ebenezer Scrooge to Willy Loman the pursuit of wealth in modern society has often led to unhappiness in one form or another. Yet the myth that connections wealth to happiness remains powerful in our society. If one considers Maslow's hierarchy of needs, wealth certainly can aid in bringing happiness by meeting basic needs. In our society -- beginning with 19th century industrialization -- the pursuit of wealth beyond those basic needs has become a hallmark. Yet Maslow identifies as higher order needs not the creation of more wealth but the cultivation of self-actualization. This paper will examine the connection that wealth has with happiness, in an attempt to explain why the pursuit of wealth in our modern society has not resulted in more happiness, even though that wealth buys an ever-improving standard of living.
Economic Growth and Wealth
The first question that must be answered in order to draw conclusions about wealth and happiness is the degree to which wealth has actually increased. An economy is defined as "a range of activities that gives rise to the production, distribution, exchange and consumption of goods and services." Within this definition, economic activity is easily measured, the most common measurement being the gross domestic product (GDP). Inflation-adjusted GDP per capita was £7339 in 1955 and by its peak in 2007 was £22,365, triple the 1955 level. Using real (inflation-adjusted) figures allows for the actual growth of output to be measured. If the UK produced three times as much in value as it did in the 1950s, why are people less happy? One point is that people are not going to be three times as happy, simply because that would be mathematically impossible given that 52% of Britons were 'very happy' in 1957 according to surveys. Thus, while we have had economic growth and an increase in wealth, happiness seems entirely disconnected.
Happiness is always relative to the alternatives. The happy Britons in the 1950s were happy because they were no longer facing bombings from the Luftwaffe and no longer had to contend with severe economic depression. Most of them remembered those times, and found their lives in the 1950s to be idyllic in comparison to previous decades. Indeed, the 1950s were the pinnacle of economic development at the time -- while they were living those years, they were experiencing the highest quality of life that the world had ever known.
Fast forward to today and expectations are much higher. Relative peace is taken for granted in most Western societies, and prosperity today is impressive. However, prosperity is harder to reach than it was in the 1950s. Housing costs are higher in relation to incomes today than they were in the 1950s, as are education costs. Job opportunities are harder to come by and lifetime employment no longer exists. People must work harder to achieve the same quality of life. The GDP growth figures must be put into perspective against cost of living figures. Economic growth that increases the cost of living faster than it increases incomes is going to lead to dissatisfaction. Global competition drives wages down, scarcity of land and crucial resources such as oil drive prices higher. Our productivity advancements have not overcome this. Hence, today's generation feels less satisfied -- even though they are richer, they do not feel richer and resent having to work harder than their parents for the same quality of life.
Another phenomenon regarding wealth and happiness was described by Karl Marx. While his idea was subsequently misappropriated and bastardized by a variety of Communist regimes, Marx accurately described the sense of satisfaction that workers gain from controlling the means of production. This is why Henry Ford needed to pay the first assembly line workers the absurd sum of five dollars a day -- he basically had to bribe people to take the job. Today's workers in…
