Money CANNOT Buy You Happiness!

The nonlinear nature of how much happiness money can buy--which is, lots more happiness when it moves you out of penury and into middle-class comfort, but very little when it lifts you from millionaire to decamillionaire--comes through clearly in global surveys that ask people how content they feel with their lives.

In a typical survey people are asked to rank their sense of well-being or happiness on a scale of 1 to 7, where 1 means "not at all satisfied with my life" and 7 means "completely satisfied." Of the American multimillionaires who responded, the average happiness score was 5.8. Homeless people in Calcutta came in at 2.9. But before you assume that money does buy happiness after all, consider who else rated themselves around 5.8: the Inuit of northern Greenland, who do not exactly lead a life of luxury, and the cattle-herding Masai of Kenya, whose dung huts have no electricity or running water. And proving Gilbert's point about money buying happiness only when it lifts you out of abject poverty, slum dwellers in Calcutta--one economic rung above the homeless--rate themselves at 4.6.

If money doesn't buy happiness, what does? Grandma was right when she told you to value health and friends, not money and stuff. Or as certain economists put it, once your basic needs are met "differences in well-being are less frequently due to income and are more frequently due to factors such as social relationships and enjoyment at work." Other researchers add: fulfillment, a sense that life has meaning, belonging to civic and other groups, and living in a democracy that respects individual rights and the rule of law. If a nation wants to increase its population's sense of well-being, says one economist, it should make "less investment in economic growth and more in policies that promote good governance, liberties, democracy, trust, and public safety."

(Curiously, although money doesn't buy happiness, happiness can buy money. Young people who describe themselves as happy typically earn higher incomes over the years than those who said they were unhappy. It seems a sense of well-being can make you more productive and more likely to show initiative and other traits that lead to higher incomes. Content people are also more likely to marry and stay married, as well as be healthy, both of which increase happiness.)

If more money doesn't buy more happiness, then the behavior of most Americans looks downright insane, as we work harder and longer, decade after decade, to fatten our W-2s. But what is insane for an individual is crucial for a national economy--that is, ever more growth and consumption. One economist maintains: "Economies can blossom and grow only if people are deluded into believing that the production of wealth will make them happy ... Economies thrive when individuals strive, but since individuals strive only for their own happiness, it is essential that they mistakenly believe that producing and consuming are routes to personal well-being." In other words, if you want to do your part for your country's economy, forget everything said about money not buying happiness.