Can wealth bring greater happiness?

Can money bring you happiness? This question must have been deliberated since money was invented.


Since this question is too broad for a short article, we shall focus on the narrower question of whether people are happier when they have more money.


A very common belief in many societies is that money does lead to contentment and happiness. Indeed it was published by D Myers in American Psychologist in 2000 that when people were asked what they believed they needed to have in order to be happy, one of the most pervasive answers is simply 'more money'.


What makes people think that more money will result in greater happiness? I have found the following three explanations are the most widespread:


1. Having more money allows one to realize more of the sought after things such as more spacious and finer cars and houses, going for more holidays and to exotic places, or to indulge oneself with luxuries.


2. Having more money allows oneself and one?s family to better weather through unexpected serious illnesses and disasters.


3. Having more money allows one to be able to perform more good for others who are less fortunate.


We can attribute the first explanation to the fact consumerism.


In a consumerist society, economists hold the view that consumption can stimulate a nation?s economic growth. Equipped with this blessing from the authorities, sellers unashamedly promote lavish and unnecessary consumption. Being able to have the means of living a life of luxury is seen to a status symbol of success, of having accomplished the desired goal. There is therefore the compelling need to keep up with the Joneses.


In a non-consumerist society such as Bhutan which is a very poor nation in the Himalayas, instead of promoting gross national product, the kingdom promotes gross national happiness. The outcome is that people seem to be happy despite the fact that they are actually very poor.


We can attribute the second explanation to the fear of not having the necessary amount of money to survive the unforeseen financially draining events that may occur.


In a communist nation, the basic needs of the people are taken care of by the nation. In a socialist nation, the basic needs are also well provided for all, whether they really need them or not. In order to counter communist and socialist influence, a capitalist government had also implemented systems where welfare of the so-called needy is well provided for. However, with the collapse of the Soviet Union and the economies of the Eastern Block nations, big strains on the resources on many socialist nations due to welfare systems, as well as the disappearance of the life-long employment system in almost all nations, a greater need for self-reliance becomes inevitable.


The third explanation can be viewed as a natural desire for people to want to contribute to the less fortunate. While this altruistic practice does not provide any material benefits to the givers, does provide the givers with non-tangible benefits.


This explanation is greatly enhanced by the giving by two of the world?s richest men - Bill Gates and Warren Buffet. However, many do not appreciate that their giving is consistent with the way they accumulate their wealth. Bill Gates, being a very hands-on man, contributes not only his money, but his time and energy, for his charity work. Warren Buffet, on the other hand, being a hands-off man, trusts his donation with Bill Gates, whom he believes will do greatest good for the money that he gives away.


These two men had shown that to be truly happy with how you give your money away to do good, you will have to do it in a way consistent with the modus operandi (mode of operation) in your life.


From the above discussion on the three explanations why people believe money can bring happiness, it is no surprise that research findings on whether money brings happiness has been mixed and sometimes conflicting. The following research results are note-worthy.


1. According to the paper Factors predicting the subjective well-being of nations by Diener, Diener and Diener in Journal of Personality and Social Psychology (1995), while there is a strong relationship between income and satisfaction at the lower income levels, the relationship becomes insignificant at the higher income level. This suggests that once the income rises above the poverty level, further increase in income does not increase happiness level by any significant level.


2. According to the paper The funds, friends and faith of happy people by D Meyers in American Psychologist (2000), while the U.S?s per capital GNP was more than twice that of Ireland, the levels of happiness were about the same. This suggests that people in a rich nation may not be happier than those in a poorer nation.


3. According to the paper A dark side of the American dream: Correlates of financial success as a life aspiration by Kasser and Ryan, in Journal of Personality and Social Psychology (1993), the more a person values money, the less satisfied he will be when he gets it. This suggests that in order to be happy, we need to value money less.