Most people in the United States enjoy an abundance of useful goods and services — more than nearly any other human who ever lived on Earth. Unfortunately, human nature is such that we do not appreciate this, nor does abundance necessarily make us feel happy.
I was reminded of this early Wednesday morning when the welcome sound (though momentary) of a hard rain swept across my roof.
As a farm boy who grew up in a dry corner of Minnesota, summer rains are instinctively welcome to me. But most of us do not connect July or August rains with plentitude or scarcity in our daily lives. This is not so for most people.
I worked in Bulgaria in the summer of 1993. The country was lush.
“We are fortunate the rains have been very good this year,” my friend Manuela said. “There will be a good crop and we will not have to worry about food this year.”
Bulgarians were well off compared to most people in Africa or Asia. The communist economy was falling apart, but levels of housing, education, health and nutrition were better than that in any other developing country I had visited.
But that did not free Bulgarians, even the wife of an army major, from the millennia-old bonds of nature. Favorable weather meant plenty of food; unfavorable weather implied scarcity.
Out of all the humans who have walked the earth, there are perhaps a billion whose lives are so plentiful the connection between summer rains and having enough to eat is no longer part of our collective consciousness.
We live in houses that once sheltered families three times as large as ours. Households own multiple vehicles. We go on vacations and cruises. Young couples and even college students expect to own more electronic equipment than our parents assembled with a lifetime of work.
Despite all this material plentitude, many of us face stress from financial concerns. Bankruptcy filings continue to increase. People have easier lives than their parents and grandparents, but do not report higher levels of happiness.
Economists are focusing increasing attention on the relationships between consumption and happiness. Economists traditionally assumed that people had needs and wants. The more needs and wants that they were able to satisfy with goods and services, the happier they would be.
But recent work by economists and psychologists points out how much our satisfaction depends on what we consume compared to other people and not on the absolute level of our consumption.
One study is instructive. Researchers asked individuals in groups whether they would prefer situation A, in which they would earn $50,000 per year while everyone else in the group earned $25,000, or situation B in which they would earn $100,000 while everyone else earned $200,000.
In case after case, strong majorities in each group indicated they preferred situation A, in which they earned more than anyone else even though the absolute level of their earnings was only half of what they would have in situation B. Relative income came out as more important than absolute income to well more than half of the people.
One can argue whether posing such hypothetical situations in a psych lab setting really reflects what people would do in real life. Still, the experiment and other, more sophisticated ones, emphasize the degree to which our perceptions of well-being depend on how we come out relative to others.
We may have more income and goods than our parents or grandparents, but if our neighbor has a new boat and our brother-in-law goes on a cruise and we don’t have money to do either, we feel materially deprived.
Economists have thought for a long time that humans are insatiable. We always want more even after our basic needs are met. But we did not relate this omnipresent desire for more to our perceptions of how we stand relative to others.
The saying that money does not buy happiness is an old one. Only a few of us succeed, however, in stepping off the treadmill of higher income and higher consumption. Many people do find great satisfaction in relationships with others, from nature or in their faith. But humanity as a whole remains unsatisfied.
© 2003 Edward Lotterman
Chanarambie Consulting, Inc.