Cedric Wilson Poverty isa terrible thing. Yet in our world of where there is enough to make everybody enjoy a reasonable standard of living, millions are poor. But what really should the goal of life, happiness or wealth be? And what would happen if by some inconceivable miracle poverty is wiped clean from the face of the earth - would human beings on a whole be happier?
Evidence gathered from national surveys in affluent countries suggests that people do not get happier, even as their countries become wealthier. Surveys of this type have been conducted in the United States since 1972, and in Japan from as far back as 1950. Yet people's standard of living has definitely improved in these countries, the statistics indicate that the level of happiness has remained - more or less. On the surface, this neither accords with logic nor intuition. The fact that more people do not have to worry about how they will pay their rent, or where dinner tomorrow will be coming from should at least make them more satisfied, and by extension, the society happier. But not so. The sense of fulfilment and satisfaction that humans experience is a little more complex than that.
Habituation
Happiness is somewhat like hearing. I have a good friend, Jonathan, who is self-employed - a remarkable small businessman, excellent at customer service. He sells DVDs from the trunk of his car. When Jonathan is driving, he plays his music not just for himself, but for the parishes of Kingston and St. Andrew. And sometimes when business is good, St. Catherine might also benefit. He is extremely generous in that respect. I recall once explaining to him that playing his music that loudly wasn't good for his hearing. Jonathan was quick to acknowledge that at that volume he himself found listening uncomfortable. About six months later, I ran into him. The music was still loud, if not louder. So I asked him "How are you doing?" Actually, I had to repeat the question at least twice, a couple decibels higher for him to hear. Then Jonathan smiled and announced triumphantly that things were getting better because he was getting "used to noise". But to me it was clear that his auditory senses were not as sharp. Exposure to loud music for long periods robs us of our hearing and similarly, a higher standard of living over time deprives us of the happiness it initially brings.
In a world economy that thrives on mass consumption, luxuries are quickly converted into necessities. In the 1960s, having a fridge was a luxury. Jamaicans were very discriminating when they wanted to wet their throats. They would not simply ask for a glass of water but very often would request "a glass of ice water". Today, a fridge is considered a basic appliance in most urban and suburban homes and we take it for granted. Yet 40 years ago, there were men who earned a living from selling ice from handcarts because most Jamaicans did not have a fridge. An improved standard of living results in 'habituation' - a process which dulls the senses to its pleasures and cheats the soul of its joys as a person gets accustomed to having something around.
Another reason behavioural economists give for the happiness factor remaining unchanged in the face of increasing wealth is that people's happiness is often connected to how well they are doing, relative to other members of the society. A couple years ago, in a survey done at Harvard University, students were asked if given a choice between an income of (a) US$50,000 a year while others were given half that amount or (b) US$100,000 while others got twice as much, which would they prefer. The majority of students selected (a). Extrapolation of the results of the experiment suggests that people are not primarily concerned about the absolute size of their income. The overriding concern is how that income measures up with what others are getting. How many people you know become disenchanted and unhappy with a pay increase after learning that somebody else in the cubicle down the corridor got a bigger one? How many people you know are willing to move out of an esteemed residential area if they discover that the neighbour that just moved in on the opposite side of the road is from a lower social class?
Rat race
These kinds of comparisons of income and status force people into a rat race aimed at maintaining the gap. As a result, some people will work longer hours to stay ahead of their colleagues. This tends to set off a chain reaction as their colleagues are forced to do the same thing, sacrificing their leisure, in order not to fall behind. Joseph Conrad, the Polish writer, described such an individual in his short story, Youth: "Apparently he never slept. He was a dismal man, with a perpetual tear sparkling at the end of his nose, who either had been in trouble, or was in trouble, or expected to be in trouble - couldn't be happy unless something went wrong." In the end, the action of such individuals creates a vicious cycle, puts people on an endless treadmill that is exhausting, self-defeating and stressful.
Some economists argue that the goal of society should be happiness as opposed to the focus on improving living standards. Taxation is, therefore, seen as the measure to manage the level of happiness in the economy. Consequently, when an obsessive worker works harder to buy more consumer goods and causes others to be unhappier, their actions should be taxed. This idea is indeed a fascinating but nevertheless dangerous one since this kind of taxation could be a greater source of unhappiness. Maybe it is best for economists to stick to poverty and leave the business of unhappiness to the theologians and psychologists.
Cedric Wilson is an economics consultant who specialises in market regulations. Send your comments to: conoswil@hotmail.com.
