Richer isn't happier

[imomus]

Happy person makes happy album shocker! Last November I outlined my plans for my new record: "The emotional tone colours of the record will be about connectedness, friendliness, wholesomeness, positivity, happiness, collectivity, constructiveness." Many things changed during the making of Ocky Milk (including the title, which used to be The Friendly Album), but these basic emotional tone colours didn't. And although it's turned out rather dark and mysterious, it's a happy darkness, and a happy mystery.

But what is happiness? Here's a man who thinks he has some answers: "People in the West have got no happier in the last 50 years. They have become much richer, they work much less, they have longer holidays, they travel more, they live longer, and they are healthier. But they are no happier. This shocking fact should be the starting point for much of our social science." The speaker is economist Richard Layard (Lord Layard to his peers). Layard believes that "happiness depends on a lot more than your purchasing power. It depends on your tastes, which you acquire from your environment – and on the whole social context in which you live". Layard compiled data collected in the US by the General Social Survey and the Gallup Organisation which asked people to rate their own levels of happiness. The results are shown in the diagram. Broadly similar results were found in Europe and Japan; despite a 6-fold rise in income per head, the Japanese show no change in happiness levels since 1950.

Layard believes that people don't get happier in proportion to their wealth because happiness is relative. He quotes Karl Marx: “A house may be large or small; as long as the surrounding houses are equally small, it satisfies all social demands for a dwelling. But if a palace rises beside the little house, the little house shrinks into a hut”. Aha, it's our old friend the evil Gini at work! It's what sociologists call relative deprivation which explains the apparent paradox that "at any one time rich people are on average happier than poorer ones. And yet over time advanced societies have not grown happier as they have grown richer."

The Guardian reports an experiment conducted at Harvard and cited by Layard which demonstrates the relativity of happiness:

"Students were asked to choose between two imaginary worlds; in the first they would earn $50,000 a year while the average for everybody else would be $25,000, while in the second they would earn $100,000 against an average of $250,000. Conventional economics would suggest that any rational individual would choose the latter option since they would be twice as well off. Actually, a majority plumped for the former; they were happier to be poorer if that meant they were higher in the pecking order. Interestingly, the same did not apply when the researchers looked at holidays. In one world, students would have two weeks off while others had one week's vacation; in the second they would have four weeks off and everybody else would have eight. This time only 20% of the students plumped for the first option, suggesting that they valued extra leisure more highly than they valued extra income."

Layard also talks about the roles played by habituation (we get quickly used to new standards of living, and start to see them as basic) and rivalry (we judge what we have by what others have).

One place I disagree with Layard is in his assessment of unemployment. (He's an adviser to the Labour government and an advocate of welfare-to-work schemes.) I'm perfectly happy despite not having a conventional job. Yet it's true that I'm not really unemployed; neither my work nor my not-work is done primarily for financial reasons. I work for love, and out of interest. Another experiment reported by Layard explains this odd behaviour:

"Edward Deci gave puzzles to two groups of students. One group he paid for each correct solution, the other he did not. After time was up, both groups were allowed to go on working. The unpaid group did much more further work – due to their intrinsic interest in the exercise. But, for the group that had been paid, the external motivation had reduced the internal motivation that would have otherwise existed."

So what's the optimal amount of annual income to aim for, the figure under which you're less happy, but over which you experience diminishing returns of happiness in proportion to your wealth? Layard quotes John Helliwell, who "has estimated that increases in average income only raise average happiness in countries below around $15,000 per head". If you're earning more than that, and if happiness is your goal, you're wasting your time, buster! Why not slow down and enjoy life?

Here are three lectures Layard gave in 2003:

Lecture 1: What is happiness? Are we getting happier?
Lecture 2: Income and happiness: rethinking economic policy
Lecture 3: How can we make a happier society?

Comments

[33mhz.livejournal.com]

The thing about taking $50k in a $25k world over $100k in a $250k world seems reasonable to me, as it would be just as reasonable to expect that in the second world, prices would inflate to make $250k just above a living wage.

[imomus.livejournal.com]

Yes, I think when Layard says "conventional economics would suggest that any rational individual would choose the latter option since they would be twice as well off" he's ignoring that conventional economics would also say that when you're much richer than everyone around you, you can afford more goods and services. In other words, it isn't just happiness that's relative, it's purchasing power too.

[nato-dakke.livejournal.com]

Am I the only one stuck in the sixties?

"To investigate the roots of these developments and examine their historical alternatives is part of the aim of a critical theory of contemporary society, a theory which analyzes society in the light of its used and unused or abused capabilities for improving the human condition." (One-Dimensional Man)

Just using the lenses I'm looking through this week, I wonder if you're not both limiting the discussion in a way that warps it quite a bit. Maybe, more money is good, but only provided the character of the individual doesn't need to be warped to acquire it. Adorno favored a leisured, wealthy life for the intellectual... he rather disfavored the possibility of intellectualism without it.

Of course if Adorno is your model for happiness, it may be time to have a pelvic xray to see just what it is that needs to be removed from your rectum.

[nato-dakke.livejournal.com]

by the way, you commented that minima moralia had had a big impact on you early in life. having only just started the book back then, I didn't realize just how big that impact had been.
as a single example, his short discussion of the hotel industry seems to be perfectly in line with everything you love about the bright-faced irrashaimase.

have you ever reread it in the meantime?

[qscrisp.livejournal.com]

It may be a cliche in some circles, but more and more it seems true to me that as long as you go looking for happiness you won't find it. It's inside you or it's nowhere. Sorry to be platitudinous, but I do think it's actually, inescapably true, despite excuses that I myself might make. Studies such as those by Layard miss the point, because he needs a 'theory' to write about, rather than a simple realisation.

Anyway, in completely unrelated, and possibly not very interesting news:

http://uk.news.yahoo.com/24022006/80-132/japan-s-blondes-vanish-women-turn-dark-side.html

[imomus.livejournal.com]

It's in storage in New York with all my other books. Perhaps I'll dig it out next week when I get there.

But no, I would never use Adorno as the pin-up boy for a happy life. Minima Moralia is subtitled "Reflections on damaged life" and there's an introductory maxim that says "Life does not live". Never was the son of a wine merchant more in need of a big brimming glass of red.

[jermynsavile.livejournal.com]

This entry has come just in time for me. The recent discovery that, for contractual reasons, a colleague 18 years my junior is earning over twice as much as me for considerably less responsibility has plunged me into a pall of gloom I can't quite explain. I don't want their job. If I'm honest I don't particularly want my job. Having never been particularly materialistic I'm kicking myself daily for letting it bother me so much. This will, hopefully, snap me out of it.

Perhaps the fact that my satisfaction with my own job is low (slowly sliding back down Mazlow's Heirarchy of Needs) is at the root of it all?

[(Anonymous)]

There's a very interesting article in the New Yorker about this:
http://www.newyorker.com/critics/books/articles/060227crbo_books

scattered

[alionunderaw.livejournal.com]

For some reason, this reminds me of a graduate student in psychology that I know, a doctoral candidate who is pretty well funded by his department. He's 31, drives a new car, owns a new and expensive computer, etcera--but I remember him telling someone, an undergrad, something like,"Well, you know how it is--we're both students, I live in poverty, you live in poverty..." There must be something to be said for relative deprivation, because I can't even imagine how this person would consider himself "poor" on any level.

I personally noticed that I seem not to have a lot of connection to money in terms of enjoying life--what I have tends to go to some pretty basic needs (food. prescriptions so that I can function, etc). I don't want or expect any huge income, and I enjoy my own slowness and distance.

That study is a bit odd.

[(Anonymous)]

not that I disagree, but I could use a bit of a raise.

[triestine.livejournal.com]

... a pall of gloom I can't quite explain... Having never been particularly materialistic I'm kicking myself daily for letting it bother me so much.

Same feeling here these days. I used to date a guy who turned out to be really rich with a stressful but enviable job (and I wasn't sure how I felt about that, knowing I could never match his earnings with my work, and I tend to be too proud for my own good) but he also turned out to be the most depressed person I knew at the time, so we parted ways.
I knew the moment I got into teaching I'd earn just about enough to make a living and perhaps treat myself to toys and gadgets occasionally, but I'd rather earn little and love my life than earn loads and be miserable the way my ex was. And yet... my current (and hopefully here to stay) boyfriend is also earning loads, having a demanding but materially rewarding job (I think of mine as demanding but psychologically rewarding - I don't much like the words 'intelectually' or 'spiritually'), but he's also happy with his life, and us, and everything.
When I finally realised that wealth and happiness aren't mutually exclusive, I started thinking, well, why can't my job provide me with more than a basic living standard when it comes to the material side? I love what I do, I do, but why has there a but crept in lately as well? Argh!
I must mull on this.

[beingjdc.livejournal.com]

That graph appears to say that getting richer doesn't make you happier, but getting poorer definitely makes you unhappier. Though of course comparing average GDP with brute numbers happiness doesn't guarantee getting the right answer on that correlation, since GDP averages could be being inflated by vast increases for a few very happy megarich people, while everyone else becomes slightly poorer.

[orlog.livejournal.com]

I often find it amazing at some of the people I know here in the states that think they will be happier with more money. These same people often criticise me for my lack of desire for more money. Ive just recently gotten a job in NYC and gave my salary requirements... My friends say it was too low, but I did not really need it to be any higher. It covers the cost of my living overhead, can pay for supplies for my art, and then some more for activities or saving. Why ask for more?
The job is a job that I enjoy doing, and that was my prime concern. People really do seem to forget that in a full time job they spend AT LEAST 40 hours a week. 40 hours a week is a good amount of time to be doing something you do not care to do regardless of pay, and will eventually eat away at the person. All that is left after that would be unhappiness and more than likely debt, because they will probably try to spend more in order to be happy outside of work.

[zenicurean.livejournal.com]

Not only is happiness relative, but poverty is also relative. This is why a certain type of poverty can never be erased from a capitalist society. Unemployed people in American rural areas who live on social security cheques are considered poor, but their standards of living are on average still greater than those of many educated, respected African specialists.

Now, mostly Europe uses relative, rather than absolute, standards of poverty. This means that the entirety of Europe could get much wealthier, but if the richer people get considerably more wealthier than poorer people, there could technically be a huge ostensible surge in poverty ratings. In fact, I'd say ceteris paribus a widening in income disparities tends to cause psychogical losses (read: envy and anger) rather than real material losses to lower-income families, unless inflationary pressures end up reducing their actual purchasing power and there is no corresponding rise in wages.

Social poverty cannot be erased in a socialist economic system, because a socialist system absolutely requires at least two specialised privileged classes: the planners and the police, both of whom would enjoy a greater social presige than anyone else. (Specialisation of labour will not magically disappear when one levels income differences or establishes material equality. Neither will the necessity for someone to make all those mandatory guns-or-butter decisions. Oscar Wilde intimated that in a socialist utopia economic decisions would always be made by someone else, but he characteristically declined to say who.)

In fact, even just after the dawn of the neolithic age some people were stronger than others, or would have their fields closer to the water than other people and would contribute more to the collective, thereby earning more prestige and power, and so forth.

where is your minima moralis when you need it

[petit-paradis.livejournal.com]

adorno's minima moralis in bits and pieces:

http://www.ldb.org/adorno.htm

Isn't this so obvious that giving lectures about it is overkill?

[(Anonymous)]

If you get beaten up *all the time*, your quite happy if the beating would suddenly stop, where a person who hasn't been beaten at all isn't feeling particularly happy about that fact.

Some things are subject of inflation, while others are not. Not as directly anyway, but you could probably argue that everything is inflatable of value.

Produkt
http://homepage.mac.com/produkt/index.html

[uberdionysus.livejournal.com]

I love those studies. They're some of my favorites.

[pyrop.livejournal.com]

Exactly: real wages (adjusted for inflation) actually have been going down for the majority of US Citizens since the '60s.

[(Anonymous)]

According to my pulse my happiness beats per minute is 'round 75. Seems like a relatively normal rate of happiness.
Happiness per square inch...

[bricology.livejournal.com]

Happiness is the new black.

[(Anonymous)]

Thanks for the link. Gobsmacked to see John Lanchester writing about happiness - he's one of my favourite novelists.

[http://users.livejournal.com/_greengrass/]

I liked your new song; it has a very sweet, spacious quality. What's with the weird group yell sound effect, though?

[mcfnord.livejournal.com]

my job is fun enough but it's not as fun as tooling around the house, so i charge the full market rate. more if i can.

[henryperri.livejournal.com]

The leftists can't have it both ways. First they'll say how they want to redistribute wealth from the rich to the poor. At the same time, they will lash out at capitalism, saying that having more money doesn't make us any happier. Well, why do you wanna redistribute the money, then?

No shit money doesn't make us any happier. Happiness is a carrot that nature dangles in front of us. It's the pursuit that drives us. Every incredible invention that man has ever come up with eventually becomes ho-hum. On to the next thing. There is no satisfaction. It is not in our nature to sit still.

[mcfnord.livejournal.com]

http://angrybear.blogspot.com/2006/02/measuring-well-being.html

Mr. Mansori wonders this today, too.

[imomus.livejournal.com]

I recorded that in a restaurant in Osaka where the team spirit was fierce: every order was greeted with a collective "Yo!" I went there again last night at sat at the counter and it was rather annoying, they were shouting so loud I couldn't hear myself speak! But I consoled myself with the thought that they'd donated free backing vocals to my new album.

[imomus.livejournal.com]

You'll probably be appalled to hear that Layard advocates 60% marginal taxation.

[georgesdelatour.livejournal.com]

Nick - I fail to check your blog for one day and I miss a really interesting post - damn.

First, I'm now itching to hear your new album. There is a prejudice that depressing music is important and serious while happy music is obviously just rubbish. Musicians depressed enough to kill themselves (Ian Curtis, Kurt Cobain) become virtually exempt from criticism. Most of the critical attention paid to Pete Doherty in the UK is based on the perception that since he's a smack-head teetering on the abbyss he must write good songs. So bring on the friendly album.

Second, I find it really interesting to read other people on this blog admitting - against all reason - that they sometimes get a kind of status anxiety on hearing that some colleague is making a lot more money than them. It may not be just money. Maybe the other person seems to be having a better sex life, more critical attention etc. I thought I was immune to these feelings, only to find that the most bizarre and trivial things have sometimes wounded me this way. "We Hate It When Our Friends Become Successful", I guess. Admitting it is half the way to get over it.

BTW do you know the fantastic film "Toto The Hero", which takes this idea to its ultimate extreme?

[(Anonymous)]

Well, as Bob Dylan said, "If I'm happy, I'm happy -- If I'm not, I don't know the difference."