The Perils of Equating Wealth with Happiness

As the world starts to get serious about global warming — gulping hard at the likely changes needed to reduce our consumption of carbon-based fuels — it is useful to realize that money and growth do not necessarily correlate with happiness. Writing in the March/April issue of Mother Jones, enviro activist Bill McKibben bravely takes on the central premise of neoliberal economics that growth is a universal elixir. In his astute article “ Reversal of Fortune,” McKibben writes:

…our continued devotion to growth above all is, on balance, making our lives worse, both collectively and individually. Growth is gumping up against physical limits so profound — like climate change and peak oil — that trying to keep expanding our economy may be not just impossible but also dangerous. And perhaps most surprisingly, growth no longer makes us happier. Given our current dogma, that’s as bizarre an idea as proposing that gravity pushes apples skyward. But then, even Newtonian physics eventually shifted to acknowledge Einstein’s more complicated universe.

McKibben gives us the big-picture treatment of this topic, situating the changing circumstances of human civilization in the inexorable realities of geology (finite supplies of oil) and natural ecosystems (finite supplies of atmosphere for carbon emissions). But the real contribution of this article is in challenging the economic assumption that more growth makes us happier. This is an important issue to address if we are going to voluntarily reduce our use of carbon fuels, which are currently the centerpiece of modern industrial economies.

It would help to revisit some little-examined assumptions of conventional economics. Most economists, writes McKibben, have crudely redefined happiness as “utility maximization.” They consider any more probing inquiries into “happiness” as “the kind of questions that occupy people with no head for numbers who had to major in liberal arts.” In other words, shut up and crunch those numbers. Don’t ask pesky philosophical questions. Of course, more SUVs and larger houses will yield greater satisfaction and social betterment!

A new breed of ecological and behavioral economists are challenging some of the fundamental assumptions of conventional economics. Instead of assuming that buying more stuff makes us happier (“maximizes our utility”), these economists are asking, “Is your life good?” They understand that the material economy is important, of course, but that it cannot be the sole focus of analysis. Once you open up a larger conversation, you can begin to get at the paradox of how Americans can be so rich but so damn miserable. One can begin to explore how the citizens of a small developing country may actually be “happier” than Europeans. (Several years ago, Bhutan recognized the perils of GNP as a metric for happiness, and instituted its own “happiness index” to evaluate its national policies.)

How interesting that a citizen of Vietnam, with a per capita income of less than $5,000, is just as happy as the citizen of France, which has a $22,000 per capita income. Could it be, asks McKibben, that the richer we get, the more socially isolated we become — and that social isolation actually decreases our “happiness?” I could go on…but read the lengthy article for yourself. Also, check out the sidebar feature by April Rabkin which offers some statistical correlations between wealth and happiness.

Originally published by David Bollier at Onthecommons.org under a Creative Commons Attribution license.