The Price of Everything - Eduardo Porter [31]
During an experiment in the 1980s, people who found a dime on top of a Xerox machine before responding to a happiness survey reported a much higher sense of satisfaction with life than those who didn’t. Another study found that giving people a chocolate bar improved their satisfaction with their lives. One might expect that our satisfaction with the entire span of our existence would be a fairly stable quantity—impervious to day-to-day joys and frustrations. Yet people often give a substantially different answer to the same question about lifetime happiness if it is asked again one month later.
Sigmund Freud argued that people “strive after happiness; they want to become happy and to remain so.” Translating happiness into the language of economics as “utility,” most economists would agree. This simple proposition gives them a powerful tool to resist Bobby Kennedy’s proposal to measure not income but something else. For if happiness is what people strive for, one needn’t waste time trying to figure out what makes people happy. One must only look at what people do. The fact of the matter is that people mostly choose to work and make money. Under this optic, economic growth is the outcome of our pursuit of well-being. It is what makes us happy.
This approach has limitations. We often make puzzling choices that do not make us consistently happier. We smoke despite knowing about cancer and emphysema. We gorge on chocolate despite knowing it will make us unhappy ten pounds down the road. Almost two thirds of Americans say they are overweight, according to a recent Gallup poll. But only a quarter say they are seriously trying to lose weight. In the 1980s a new discipline called Prospect Theory—also known as behavioral economics—deployed the tools of psychology to analyze economic behavior. It found all sorts of peculiar behaviors that don’t fit economics’ standard understanding of what makes us happy. For instance, losing something reduces our happiness more than winning the same thing increases it—a quirk known as loss aversion. We are unable to distinguish between choices that have slightly different odds of making us happy. We extrapolate from a few experiences to arrive at broad, mostly wrong conclusions. We herd, imitating successful behaviors around us.
Still, it remains generally true that we pursue what we think makes us happy—and though some of our choices may not make us happy, some will. Legend has it that Abraham Lincoln was riding in a carriage one rainy evening, telling a friend that he agreed with economists’ theory that people strove to maximize their happiness, when he caught sight of a pig stuck in a muddy riverbank. He ordered the carriage to stop, got out, and pulled the pig out of the muck to safety. When the friend pointed out to a mud-caked Lincoln that he had just disproved his statement by putting himself through great discomfort to save a pig, Lincoln retorted: “What I did was perfectly consistent with my theory. If I hadn’t saved that pig I would have felt terrible.”
So perhaps the proper response to Bobby Kennedy’s angst is to agree that pursuing economic growth often has negative side effects—carbon emissions, environmental degradation—that are likely to make us unhappy down the road. Still, it remains true that American citizens—and the citizens of much of the world—expend enormous amounts of time and energy pursuing more money and a bigger GDP because they think it will improve their well-being. And that will make them happy.
HAPPINESS IS A CONCRETE FLOOR
Happiness doesn’t depend solely on money, of course. People who don’t have sex report being less happy than those who do. People are unhappier in areas with higher unemployment, more crime, higher inflation, and more sulfur-oxide pollution emitted by coal-fired power plants.