Easterlin's classica paper asserts that happiness is not related to the total amount of money you own, but rather to the amount of money you own compared to those around you. The new rebuttal of the theory that this article is about claims that new polling methods have made it easier to get correct answers - and that these do not match the classical theory. The accompanying map shows a clear correlation between a country's GDP per capita and average life satisfaction.
The study, however, is flawed.
What they fail to take into account is that the Easterlin study was made in the 70's when poor countries weren't exposed to the lifestyles of richer countries through media such as television and the Internet. Today even the poorest countries have lots of communication with the outside world. According the CIA world fact book around 20% of Albanias population was online in 2006. And almost everyone had access to television. What this means is that the population in poor countries can see what life is like in Beverly Hills, and see the western lifestyle as their "peers"
So the paradox holds - information technology has just made it obvious to the poor countries how poor they really are.
Hey, I actually am from Albania. I was born in 1980, so my first 10 years were under comunism. People were poor, but there was more equality. So, when you saw around you how everybody was doing about the same, then you didn't feel that bad.
The lack of general resources, made people and families to be much more connected, as you had to rely more on your family (not just the inner circile, but everybody, from uncles, aunts, third cousins, etc).
When comunism fell, some people started making more money, getting new cars, houses on the beach, while some were left with less, which obviously made them unhapier. They might be slightly better off than in comunism, but they were much worse than their peers.
Well, accoding to Kant's principles, is the extra hapinness gained by those that made it well, worth equal or more than the happiness lost by those that are faring less well? It is a very hard thing to quantify.
But even in the 80s, we could watch Italian TV, so we kinda new that the rest of the world was doing much better, (and eventually overthru our comunist goverment), BUT everybody around us was doing about the same.
My mom told me a while ago; well we are doing much better economically (as a family), and have a lot more now, BUT we seemed to be a lot happier back than.
Information technology has just made it obvious to the poor countries how poor they really are
Not just information technology, but cheap air travel. A lot of people from poor countries have come to work for a while in their uncle's shop in the US.
I wonder if happiness is rising in wealthy countries because it has also become obvious (to anyone who looks) how much richer they are than people in poorer countries.
I wouldn't just separate the poorer countries into their own category. Now with everyone watching the same TV (with probably a much higher emphasis now on lifestyles than in the 70s), even the poor in the US should start feeling the same way as the 3rd world countries.
Clearly their feelings wouldn't be the same but I imagine that there would still be some resemblance.
"peers", exactly. The same effect occurs locally too (friends, neighbours, colleagues, people you went to school with, etc...) and not just with money, but all indicators of status.
There's an interesting book by Alain de Botton called Status Anxiety that basically argues how increased opportunity can increase anxiety (which is roughly the inverse of happiness).
I suspect that it mostly matters for what you use it. Simple accumulation of goods isn't really all that satisfying, but freedom from basic necessities and the the ability to do things and make changes that you otherwise would be incapable of, are very nice.
Having money lets you trade one set of problems for a different set of problems. That second set generally consists of "nice problems to have" but they are problems nonetheless. Whether or not you're happier depends on which set of problems you prefer.
Actually, you're not far off the mark. I would add:
- pressure from friends and family to spend the way they want you to ("Why don't you help your little sister more?")
- can be hard on long-standing friendships because they can't afford to do the things you can afford, and paying for them creates awkward feelings of obligation.
But the fundamental problem with having money you have to decide what to do with it, which is not nearly as easy as you might imagine.
You remind me of a statement I read attributed to Andrew Carnegie, something like (I'm paraphrasing): "I made several hundred million dollars and gave it away, and the giving was incomparably harder than the making."
Also, I suppose that a psychological advantage of not having money is that you can imagine how much better off you'd be if you had it.
I'd put that slightly differently: if you bought heavily into the idea that money will make you happy and then find that it doesn't, then you can be truly lost. As long as you don't have money, it makes it that much easier to figure out what you ought to be doing day to day, which for many people is no small thing.
It buys one kind: what results from the relief of not having to worry about money anymore. ("Worrying" about losing your millions does not count; we poorer folks have to worry about that, too.)
Financial freedom does not automatically make you happy, but the universe isn't binary, and so being relieved of the biggest worry in modern life does buy you a good amount of happiness -- or at least, the opportunity for happiness.
My favorite relevant quote is "For problems that can be solved by money, there's nothing better than money." For instance, commuting time. I drive 30 min to work in traffic because houses are 60-80% more expensive by my office. If I had double the money, I'd move closer and get more time with my family. My options are 1) drive more or 2) have a smaller house. More money would solve either of those.
Simply, I'd say money buys freedom. Potentially. Because earning a million dollars through legitimate hard work gives more freedom than earning it through fraud (you don't have to hide and/or get arrested).
The study, however, is flawed.
What they fail to take into account is that the Easterlin study was made in the 70's when poor countries weren't exposed to the lifestyles of richer countries through media such as television and the Internet. Today even the poorest countries have lots of communication with the outside world. According the CIA world fact book around 20% of Albanias population was online in 2006. And almost everyone had access to television. What this means is that the population in poor countries can see what life is like in Beverly Hills, and see the western lifestyle as their "peers"
So the paradox holds - information technology has just made it obvious to the poor countries how poor they really are.
Correlation does not equal causation....