Chapter 13: Growth and Happiness

“Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things […] The Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning […] it measures everything in short, except that which makes life worthwhile.”

March 18, 1968, Robert Fitzgerald Kennedy, University of Kansas speech

Income determines our standard of living, almost by definition. But have you ever stopped for a second to start to think if the economic component is really the most important one in our lives? Very few people question that, it is almost a given, a definition. If you watch the news, read the major newspapers, and listen to the political debates, it would undoubtedly seem so. Politicians get elected depending on how effective their campaigns are in convincing people that their policies will bring more jobs, and hence more economic growth, which for some reason they associate with words like freedom and democracy. News follow accordingly.

This is what I feel, what I get from living in this society and receiving news from our information hubs. It certainly seems to be the case, but I do not like to just talk about what it seems. I like facts and solid data, claims that are supported by evidence. Luckily, the information revolution gives us the ability to look for ourselves in public data records in a matter of seconds – unfiltered and uncensored.


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Figure 1.1: Google Insights comparison of the search terms ‘economy’, ‘happiness’ and ‘GDP’ between 2008 and 2011.

Figure 1.1 shows the relative popularity of search terms on the Web over time. On this specific search I compared the occurrences of the terms “growth, happiness, GDP,” worldwide on news stories. Of course, this only applies to English speaking sites, mainly the United States, India, Singapore, Australia, the United Kingdom, and Canada. It is quite remarkable that the terms “growth” and “GDP,” both economic concepts, have an occurrence about ten times as high as “happiness.” You might object that “growth” applies to a variety of contexts, and that “economic growth” would be a more reliable term for comparison. While this is partly true (though unfair as it contain two words, thus filtering out lots of results), it does not explain why the acronym GDP (Gross Domestic Product) manages to outnumber both. Do we really think that GDP is ten times more important than happiness in our lives?

To be fair, how much we talk something does not correlate entirely with the importance we give to such a thing. But it does tell you quite a lot about the general cultural trend of a society over time, its zeitgeist. The news channels blare out many stories about economic growth as the panacea to solve most of people’s problems. The equation that we have come to believe is that growthprosperity, and prosperity, of course, is good. Not just that, growth is the cornerstone of virtually all economies of the world. We even use the word recession with a negative tone to describe the general slowdown in economic activity, including employment, investment spending, capacity utilisation, household incomes, business profits, and inflation; in which bankruptcies and the unemployment rate rise.

It looks clear enough what the zeitgeist of the news is. But what about literature, books, novels, and such? Surely they must differ – works by professional authors have little to share with petty news reports, right? In 2010, a group of researchers had the amazing idea to utilise all the available knowledge of mankind, and constructed a corpus of digitised texts containing about 4% of all books ever printed, or 5.2 million books. “Analysis of this corpus enables us to investigate cultural trends quantitatively. We survey the vast terrain of ‘culturomics’, focusing on linguistic and cultural phenomena that were reflected in the English language between 1800 and 2000. We show how this approach can provide insights about fields as diverse as lexicography, the evolution of grammar, collective memory, the adoption of technology, the pursuit of fame, censorship, and historical epidemiology. Culturomics extends the boundaries of rigorous quantitative inquiry to a wide array of new phenomena spanning the social sciences and the humanities”.1

The Google Labs N-gram Viewer is the first of its kind, capable of precisely and rapidly quantifying cultural trends based on massive quantities of data. Using this tool, we can check how our culture has developed over time with regards to our areas of interest.


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Figure 1.2: Comparing ‘happiness’ and ‘growth’ over time with n-grams. Courtesy of Google.

We can see in Figure 1.2 how “happiness” and “growth”, between 1800 and 2008 have a negative correlation: as “growth” rises, “happiness” declines. Around 1830, authors started to talk more about growth than happiness. To be objective, correlation does not imply causation, and the mere fact of writing about something does not tell you the whole story. This data only shows the occurrences of such words in books, not their context, nor their meaning. Authors could well have been talking about the “loss of happiness”, or something even more subtle. But it does show that the interest in “growth” has been, well, growing, whereas writers cared less to talk about being happy.

Something very interesting happens in the last 50 years, let us zoom in and have a closer look.


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Figure 1.3: GDP, economic growth, and happiness from 1940 to 2008. Courtesy of Google.

Figure 1.3 shows how the correlation is even stronger. I took the specific term ‘economic growth’, to rule out other possible disturbances in context. ‘Happiness’ declines from 1950 to  1995, while ‘economic growth’ and ‘GDP’ rise. After that we observe the reverse effect: both ‘GDP’ and ‘economic growth’ fall, while happiness increases considerably. Again, correlation does not mean causation, but it surely is remarkable what this data shows.

For more than half a century, our culture has been fuelling the idea that the pursuit of growth, work, and economic expansion should be one of our primary goals in life, if not the highest of all. But that assumption is being challenged and it is slowly beginning to crumble. This very book that you are reading now did not come out of the blue. It is the result of the influence of this change in culture that we are experiencing, that has been increasing this past decade. As you can see from the graph, since the year 2000 there has been a steady change of course. In literature, there is now more talk about happiness, while interest in GDP and economic growth is eroding.

My initial motivation for writing this book was fuelled by the realisation that societies should move away from the GDP indicator and try to maximise happiness instead, using new measures such as the GNH (Gross National Happiness), the Happy Planet Index, or the Satisfaction with Life Index. That seemed to go well with the fact that technology was displacing workers more and more, and I thought a fresh look at the topic could give some insights into how to approach this challenge. Given what I have read and heard, there seemed to be overwhelming evidence, from sociological, anthropological, and other scientific studies, that monetary acquisition does not make one proportionally happier. That is to say, that there was no positive correlation between how much money you have and how happy you are. In a sentence, that money does not buy you happiness.

But as I checked my sources more thoroughly, I discovered that my initial assumption was not entirely correct. As a scientist, I had to look at the evidence and challenge my own beliefs, even if it was unsettling at first. What I found was a very complicated and intricate world of happiness research, which was much more complex than I originally thought it would be.

Richard Easterlin, economist and Professor of Economics at the University of Southern California, discussed the factors contributing to happiness in his 1974 seminal paper “Does Economic Growth Improve the Human Lot? Some Empirical Evidence.”2 He found that the average reported level of happiness does not vary much with national income per person, at least for countries with incomes sufficient to meet basic needs. Similarly, although income per person rose steadily in the United States between 1946 and 1970, average reported happiness showed no long-term trend and declined between 1960 and 1970. Basically, once a country gets out of poverty, there is no longer a strong correlation between income and happiness. This is now known as the Easterlin Paradox, which was later confirmed by a subsequent study, published in 2010 in the Proceedings of the National Academy of Sciences, reaffirming the paradox with data from a sample of 37 countries.3 The paper concludes with the following remarks:

“Where does this leave us? If economic growth is not the main route to greater happiness, what is? A simple, but unhelpful answer, is that more research is needed. Possibly more useful are studies that point to the need to focus policy more directly on urgent personal concerns relating to such things as health and family life and to the formation of material preferences, rather than on the mere escalation of material goods.”

A possible explanation of the Easterlin paradox comes from a feature of cognitive behaviour that researchers call adaptation. If you improve your standard of living, you quickly adapt to it, it becomes the norm, and your expectations rise along with it. This leads to the so-called hedonic treadmill.

Imagine you are on a treadmill, and you wish to reach your ultimate goal – happiness, which sits just in front of you. As you begin to walk, so does the treadmill, at the same speed as you. In fact, you are causing the treadmill to move! You might be getting some small rewards along the way, but you forget about them soon after you receive them, because your real goal still sits there. So you speed up the pace, and start running. But the treadmill follows, and no matter how hard you try, you will only be chasing an unattainable dream, forever out of your reach. With more money comes greater and harder aspirations, which are increasingly difficult to achieve.

Another possibility is the relativistic effect, named colloquially “keeping up with the Joneses,”, whereby we always compare our achievements with our neighbours. H.L. Mencken famously said “a wealthy man is one who earns $100 a year more than his wife’s sister’s husband.”4 It does not really matter how rich you are, you just have to be richer than those around you. Researchers even conducted studies asking people: What would you rather? Do you want to make seventy thousand dollars if everybody else in your office is making sixty-five thousand or seventy-five thousand dollars if everybody else is making eighty thousand? Does it matter how much money you bring home or does it matter how much money you make relative to other people? In the study people preferred to be making less if that meant making more than the people around them.5

According to urban legends, the opera star Maria Callas and the English Professor Stanley Fish had the same negotiating strategy. When Fish got hired into his department, he said, “I don’t want to talk salary. I don’t have a particular number in mind. I just want to get paid one hundred dollars more than whoever is the top person in this department.” Now, there is a guy who knows about happiness (too bad it only works for one in the entire department).

In conclusion, as we quickly adapt to new situations, happiness is relative, and Easterlin proved that money does not necessarily make people happier. End of story, let's move along.

Not so fast.

Notes

1 Quantitative Analysis of Culture Using Millions of Digitized Books, Jean-Baptiste Michel, Yuan Kui Shen, Aviva Presser Aiden, Adrian Veres, Matthew K. Gray, William Brockman, The Google Books Team, Joseph P. Pickett, Dale Hoiberg, Dan Clancy, Peter Norvig, Jon Orwant, Steven Pinker, Martin A. Nowak, and Erez Lieberman Aiden, 2010. Science.
http://www.sciencemag.org/content/early/2010/12/15/science.1199644

2 Does Economic Growth Improve the Human Lot? Some Empirical Evidence, Richard A. Easterlin, 1974. University of Pennsylvania.
http://graphics8.nytimes.com/2008/04/16/business/Easterlin1974.pdf

3 The happiness-income paradox revisited, Richard A. Easterlin, Laura Angelescu McVey, Malgorzata Switek, Onnicha Sawangfa, and Jacqueline Smith Zweig, 2010. Proceedings of the National Academy of Sciences.
http://www.pnas.org/cgi/doi/10.1073/pnas.1015962107

4 Money Doesn’t Make People Happy, 2006. Forbes.
http://www.forbes.com/2006/02/11/tim-harford-money_cz_th_money06_0214harford.html

5 Psychology 110 Lecture 20 – The Good Life: Happiness, Prof. Paul Bloom. Yale University.
http://oyc.yale.edu/psychology/psyc-110/lecture-20


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