Happiness research in general and the association of money and happiness in particular, has gained much interest and that too in contemporary times, with much written on them. The relationship between happiness and money is security, higher social status and democratic attitude. Examination of the association of money and happiness has an important bearing on life and living for men. In the early seventies, money was perceived to bring happiness, which however was reversed two decades later. In Jim Holt’s review of McMahon’s book, Happiness: A History, Holt suggests that the concept of happiness was differently perceived across the ages. For instance, it was correlated with luck in the Homeric era, heaven in the medieval era and to a warm puppy in the contemporary era. The idea of happiness in life drew serious attention in Ancient Greece when Democritus opined that a happy life was not just restricted to fate or circumstances, but rather within the mind. However Socrates and Plato saw happiness as something more objective, as a “secure enjoyment of what is good and beautiful”. Christian philosophers who lived during the Middle Ages perceived happiness as a spiritual matter attainable through devotion and faith of God. In the Enlightenment era, Western cultures equated pleasure to happiness.
Much has been said about the attributes of happiness and the pursuit of happiness. The belief that happiness is an impossible human ambition or that it is a fool’s dream has been proved false. However the attainability of this happiness has been rendered difficult. A commonly perceived idea about happiness is that the pursuit of happiness is always self-defeating, which means the harder people try for happiness, the farther they would be from it. Several philosophers have suggested that a direct chase of happiness would only be a wild-goose chase, and that it should only be sought on the sidelines of other activities. According to John Stuart Mill, only those people can be happy who have their minds fixed on some object other than their own happiness. These could be the happiness of others, on the improvement of mankind, or even some art or passion. However a study by Schooler, Ariely and Loewenstein suggest that happiness can be increased by conscious interventions. For instance activities like meditation or counting one’s blessings can increase one’s happiness.
The question of whether happiness is the highest good cannot be determined scientifically. However the desire for happiness has been high among the people. Americans see happiness more reflective of a good life than wealth or moral virtues, and perceive happy people as being very likely to go to heaven. The inability to predict happiness based on circumstances led researchers to look for other correlates of happiness. One of these correlates is wealth and the question of whether wealth can bring happiness began to be hugely debated.
Aristotle had considered wealth as being necessary for happiness, despite the stories that happiness is independent of material holding and wealth. Epicureans contended that money is required to a certain extent to protect us from life difficulties like harm or pain, however beyond a certain threshold point, money cannot bring happiness. The Epicureans’ logic was that a man who cannot be satisfied with little cannot be satisfied at all. Frey and Stutzer also determined that while income correlates with happiness at lower levels, there is no correlation between the two beyond a certain limit. They determined this limit to be $10,000 per annum as of the year 2002. As if to support this determination, it was also seen that some of the wealthiest Americans were only modestly happier than controls living in the same area. Easterlin, in his article ‘Does Money Buy Happiness?’ opines that many Americans perceive wealth and happiness to be more intertwined and thus pursued simultaneously. Based on surveys from several developed and less developed countries, Easterlin makes an ironical determination that across all societies more money means more individual happiness. However, raising the incomes of all does not lead to the happiness of all. What is valid for an individual is not valid when the society is considered as a unit. This is because one’s material well-being is not seen in terms of absolute value of goods one has, but rather to an increasing social norm of what they should have.
Easterlin claims that within a country at a given point of time, happiness correlates with higher income. On an average, he claims that higher income people are happier than the poor. This positive correlation of happiness with income has been seen in 30 national surveys. Of significance is the fact that greater individual happiness is associated with more money, which was evident in all societies western, non-western, communists and non-communist societies. The report concludes:
In all societies, more money for the individual typically means more individual happiness. However, raising the incomes of all does not increase the happiness of all. What is true for the individual is not true for society as a whole
This assertion has been backed considerably by Alex Inkeles who noted that economically well off people with more education and skilled jobs have more opportunities for being happy. Despite the pattern being weak there has not been a single case that went against this perception. While the lower income group has a worry of money which is not there for higher income groups, there is one reason less to be sad, which at least contributes to being more happy. However with regard to national wealth and individual happiness, it has been observed that richer countries are generally not happier than the poorer ones. Thus while a positive correlation exists between income and happiness, within countries, this is not true when rich and poor countries are compared or during high and low income situations within a country at two different times.
However two decades after the publication of Eaterlin’s article, newer studies have reversed the findings. These studies suggest that economic growth of a nation does increase a collective sense of well-being within a country. It has also been determined that differences in well-being as perceived by people within a country are not significantly related to income. In his article ‘Does money buy happiness?’, Robert Lane attributes this new understanding to better data. He notes that in 1976, Gallup’s translational study emphasized that it is the poverty that dominates all aspects of life and negatively affect attitudes and perceptions. However he also noted that it is possible for people in isolated places to be happy despite being poor. In 1980, Inkeles and Diamond determined that personal satisfaction rises with economic development, and when national populations are considered holistically, money can buy happiness. However comparisons within a society do not show that money can buy happiness. No such relationship between income and well being has been substantially seen in any developed country. This was also evident in the 1976 study by Andrews and Withey which suggested that socioeconomic groupings only showed a meager difference in well being. A couple of years later Freedman reported that:
The rich are not more likely to be happy than those with lower income and the middle class is not more likely to be happy than those with lower incomes. For a majority of Americans, money does not bring happiness.
However among the poor, Freedman determined that money can buy happiness and a sense of well being. Tibor Scitovsky, in his book The Joyless Economy emphasizes that many of life’s pleasures like work satisfaction, friendship, joy of reading, pleasures of solitary thought, cannot be bought or sold. Studies on quality of life have separated factors contributing to well being as being external and internal factors. The external circumstances vs. internal dispositions showcases the perception or attitude of a person in response to evolving external circumstances. The external factors primarily include community services, family life, friendship, satisfying work and leisure, religious and spiritual involvement, and civic pride. The internal factors include self-esteem, belief of meeting life challenges, and a sense of effectiveness. None of these internal or external factors are associated with income. However satisfaction with one’s income or standard of living, which is unrelated to level of income, has a bearing on well being. The hedonic calculus or the calculated consequent pleasure or pain, is more subjective than objective. The factors that contribute to happiness and well being are those that are unrelated to money. Therefore it is wise to conclude that money cannot bring happiness.
