The Economics of Happiness

Consider this bit of startling finding: once people have an annual income of about $10,000 per capita, more money doesn't go far in making them happy. (We're talking about worldwide per capita income, not US).

Indeed, a growing number of economists are realizing that consumption is not equal to happiness. So they're asking: what makes people happy?

What is different is that these economists are revisiting old assumptions and asking new questions. They’re not taking the neoclassical model of rational economic man for truth. They have been willing to learn from their colleagues in psychology. They have given up on the old assumption that the more you consume, the better off you are; instead, they are actually looking at the question empirically. Most importantly, they are bravely asking, “What factors make people happy?” It’s another sign of the coming revolution in economics.

Consider this: once people have an annual income of about $10,000 per capita, further income does little to promote happiness. Worse yet, economic growth in most industrial nations, which has tripled or quadrupled our wealth since 1970, hasn’t made us noticeably happier. In some countries, despite all this vast increase in wealth and consumption, folks are less happy than they were a generation ago.

Here's an interesting article by Tom Green of Adbusters: Link

Interesting article, but the solution that it's vaguely gesturing toward is a dangerous one; give the government your money so they can make *everybody* happy. Also, they somewhat discredit themselves with their evaluation of the Cato Institute. While I certainly don't agree with everything from Cato, I doubt you could label them "neocons." I'm sure some of them are greedy, but neocons? They need to think up a better word for "poo-poo heads" than that; Cato is pretty anti-intervention whereas neo-conservatives are strongly interventionist.

I don't doubt that the study points to two kernels of well-known truths: that money can't buy happiness and that Americans are workaholics. While redistribution of the wealth would be *a* solution, without consent taking from someone something that they earned is still essentially theft (and thus not a particularly moral solution, even if it has an attractive product.) Unfortunately for expedient social idealists, the only conscionable solution is to trust people's better nature (or prompt it through example) via philanthropy. That way, people with excess crap can get rid of it and feel good about it without coercion or morally dubious state intervention. The reason the ends never justify the means is because future generations will tend to treat previous means as the floor, not the ceiling.
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There's also another little known benchmark, once the per capita GDP reaches $3,000 that's when the luxury retailers start invading the country, oil or no oil.
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But, kdp, we buy more and more things that make us feel that we need to buy more and more security measures. If we stopped after supplying ourselves with necessities and a modest amount of leisure items, we would be just as happy as we would be with all the extra great stuff.

Let us secure these, and save what buying power is left over, and reap the peace-of-mind byproduct. To put it another way, it costs us less in mental anguish to secure a modest amount of money and material than to secure a large amount.

What is left is to spend our additional *spare time* in the company of loved ones in meaningful activity (which also, by the way, can be low-cost). Peace be with you, dj.
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yes, kdp.. but a cool fellow named ben franklin once said 'one who gives up liberty for security deserves neither liberty nor security.' and he was right. the only "primal" needs we have are food, shelter, and clothing. THREE and ONLY three. the other things (security, cars, laws, nicotene) are things we WANT. although clothing could be debated in some regions of the planet...

otherwise, i could have told you this. material items do not = happiness. duh. we're exactly like the romans, except with iPods. some great sociologists wrote about this exact thing back in the 18-1900s; therefore, this is not a new concept. but we haven't ALWAYS been like this.. just in the last 100 years since the industrial revolution and the model-t ford. we actually had some morals and values, none of which involved electronics, hummers, and credit card debt.

what makes me happy? saving money. friends. the fact that i can afford my bills. NOT being in debt. the fact that i bought my car with cash. the fact that i graduated with a bachelor's degree all by myself. my boyfriend. and sleeping. i actually get more joy out of giving away my material possessions. i've also been known to be a little weird and non-traditional. but moral of the story: yes. we know this stuff. and this is just ANOTHER example of wasted research time, money and resources. how about research on how to get us away from all of these social anxieties? that may be a start...
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I've heard this before (although I think it was based on North American numbers, so the figure was a tad higher than $10,000 per year).

What makes people happy? For me, it would be the basics (food, clothing, shelter), good health, and love. Unfortunately, money is required for the basics, so I would say that it does indeed buy happiness... to a certain extent. But if you're chronically ill and socially isolated, you're probably not going to be very happy... even if you have a billion dollars.
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I take issue with the whole "...once people have an annual income of about $10,000 per capita, more money doesn’t go far in making them happy..." idea because it quite obviously doesn't take into account just how much $10,000 can buy in many societies.

This would be a tripling of my maid's present income, for example. Same for my friend Linda, who is a nanny. How much more than tripling your prrsent annual income do you need to be happy, even in America?

$10K may seem like chump change to people who are accustomed to spending $100 for a bag or groceries, but in a country where you can buy a bag of luxury foods from a premium market for $15 (how about a first-rate porterhouse steak for under $2?), that $10K would be a significant uptick in one's economic standing! OF COURSE they'd be happy!
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I've found that if I'm not happy where I am, then I won't be happy with more material things. Not to say there aren't things I would't like to change, but I wouldn't want to live thinking "I'd be happy if only I had this." I'd be chasing my own tail forever.
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No amount of money "makes" someone happy. Money in and of itself is completely irrelevant to how happy you are. Money will not eleviate stress (although it can provide for needs that will lessen stress). Money cannot buy good health (although it can provide the best health care available). Money cannot buy people that truly love and care about you (although it can buy people to care for you). Happiness isn't even related to money.

Oh, and "MoonCake". Franklin's quote was, "Those who would give up essential Liberty to purchase a little temporary Safety deserve neither Liberty nor Safety". 1755. It's oft misquoted in various ways but specifically he was speaking of the nation's collective Liberty and Safety, not what 'kdp" was speaking of.
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but we haven’t ALWAYS been like this.. just in the last 100 years since the industrial revolution and the model-t ford. we actually had some morals and values, none of which involved electronics, hummers, and credit card debt.

Highly unlikely. The most constant thing in the world is human nature. People "now" are just as depraved as people "then." They had genocide, we have credit debt. Oh noes, how far we have fallen indeed.
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The premise of the article should be fairly obvious to most folks. But the author makes some bizarre claims as to the solutions.

I doubt that taxing 90% of a man's $50 million would keep him happy, as the author suggests. However, if the man used 90% of his money to help feed the poor, I think he might feel good about himself and feel happier.

That is one of the most glaring differences between liberal and conservative thought, in my opinion. Both of us think that the man should share his wealth, but the conservative tends to think he has the choice, while the liberal tends to think he shouldn't.

Disclaimer: Yes, I know not all liberals think the same way. This is a generalization of the majority.
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happines is a state of mind.
U cant buy or be told to do it because it just comes to u
but people are very good at being unhappy so it dosn't last.

O this is intresting go google it:
the hierarchy of human needs
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Money, like every else can be corrupted, when people see money itself as the end, instead of the means to an end. That is why it can not produce happiness, but it can serve the means of attaining happiness, if used wisely. So, I see it as a tool. Sadly, people are misled and confuse the issues, trying to force it to do things it was never intended to do.
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