Wealth and Happiness Essay
Why Do Rising Incomes and Wealth Not Necessarily Equate with Rising Happiness and Content?
The modern consumerist society highly appreciates material values, which outweigh spiritual and moral values. At the same time, the material prosperity, rising wealth and level of income do necessarily equate with rising happiness and content. In actuality, the situation in the modern society is paradoxical in a way, since developed countries have reached an unparalleled level of development and the problem of poverty has partially solved, but the growing incomes and prosperity of nations did not result in the happiness of all people living in developed countries. In such a way, it is possible to estimate that the rising wealth and income are not interrelated to rising satisfaction and happiness, in spite of the dominating consumerist views which comprise the mainstream culture today.
Consequently, it is important to find out causes of such a gap and lack of interdependence between rising wealth and happiness of people because all people want to be happy and, erroneously, they associate happiness with wealth. As a result, the dominant strife for prosperity as a source of happiness is apparently misleading and people should be conscious of this fact and the understanding of its causes will help many people understand what makes them really happy.
The lack of interdependence between wealth and happiness
In actuality, the idea of interdependence of rising wealth and rising happiness and content of people is a highly controversial issue. In fact, views on this issue vary dramatically and may be quite antagonistic. On the one hand, there is a widely spread belief that the rising wealth and higher level of income can make people happier and more content with their life. On the other hand, there is the opposite view which indicates to the lack of the interdependence between wealth and happiness. According to this view, the rising wealth does not make people any happier and, what is more, the growing incomes of people can even evoke certain anxiety and result in the growing dissatisfaction of people.
In order to find out the true effect of the rising wealth on the psychological state of people, their happiness and content, several researches were conducted. In this respect, it is possible to refer to the research of Richard Easterlin (1995), who attempted to reveal the impact of wealth and rising incomes on happiness of people. His research revealed the fact that the effect of the rising wealth and incomes can produce a different impact on happiness and content of people with their life.
To put it more precisely, the research of the impact of the rising wealth on happiness of people in Europe (Graph 1) revealed the fact that basically happiness of Europeans grew respectively to the growth of the GDP. At least, this trend was common to eight European countries. At the same time, the analysis of the interdependence of wealth and happiness revealed some controversies. For instance, in Belgium, happiness did not grow even though the national GDP grew steadily. The similar trend could be observed in Ireland where, in spite of “Irish miracle” and substantial growth of GDP, the growth of happiness could hardly catch up with the growth of wealth.
At the same time, in Japan the interdependence between rising wealth and growing GDP and the life satisfaction was obvious (Graph 2). In fact, in the post-World War II period, Japan had made a huge economic progress, which stimulated the improvement of the quality of life of Japanese and resulted in the growing life satisfaction and happiness of Japanese people. In contrast, the slowdown of the economic growth in Japan in 1990s resulted in the decreasing happiness and life satisfaction of Japanese people. As a result, the researcher concludes that the wealth and happiness are closely intertwined in Japanese society (Easterlin, 1995).
However, in the USA the result of the research was absolutely different (Graph 3). Easterlin (1995) studied the interdependence between the growth of GDP in the USA and happiness of Americans and revealed the fact that, in spite of the growing GDP, happiness and content of American did not grow proportionally to the growth of GDP. Moreover, happiness and content could even decrease, regardless of the rising level of incomes and wealth of Americans.
In such a way, effects of rising wealth can vary dramatically from the rising happiness and content to no effects or even decreasing happiness and content.
Causes of the lack of rising happiness due to rising wealth
Obviously, different effects of rising wealth on happiness and content of people can be determined by specificities of national culture. In this respect, it is possible to refer to the different effect of rising wealth on rising happiness in Japan and the USA. At the same time, specialists (Easterlin, 2001) argue that it is possible to single out common causes which lead to the lack of happiness, even though wealth and incomes are rising.
First of all, specialists (Easterlin, 2001) underline the fact that the rising wealth and incomes of people can lead to the rising anxiety of people, which naturally prevents them from being happy and content with their life. Such a paradoxical effect of growing wealth and incomes can be explained by the growing concerns about the proper investments or spending money people earn. In other words, people, who get used to lower incomes, face a problem of rational expenditures and effective investments of money. In such a situation, often they face a risk of losses of their money because of ineffective investments that lead to stresses and even depression. Consequently, there remains no room for happiness, even though incomes are growing.
Along with the anxiety, there is a risk of the instability of incomes. This risk is particularly high when the economic situation in the country is unstable. For instance, the income of people rise consistently but political instability or uncertainty of people in the future can minimize the positive effect of rising incomes. In this respect, it is also worth mentioning the situation when nominal incomes are rising, but the actual socio-economic position of people remains unchanged or deteriorates that is the case when the high inflation rate minimizes rising incomes. As a result, people grow dissatisfied because the rising income does not improve their life standards.
Finally, specialists (Easterlin, 2001) reveal a serious problem which often accompanies the growth of the national wealth. The problem is the widening gap between rich and poor or between the upper-class and the middle class. As a result, the social inequality annihilates positive effects of rising incomes and wealth on happiness of people. Instead, they feel dissatisfaction because of the lack of equal opportunities and enormous incomes of a few, while the growth of incomes of the majority of people may be insignificant.
Thus, taking into account all above mentioned, it is possible to conclude that the rising wealth and incomes do not always contribute to rising happiness and content. In fact, as a rule, rising incomes do raise happiness and the life satisfaction, but they do not necessarily equate with rising happiness and content. The problem is that rising incomes can result in growing anxiety and lack of experience of the effective use or investment of rising incomes that lead to the growing dissatisfaction of people. In addition, rising incomes and wealth do not always imply the equal redistribution of wealth within the nation. As a result, social inequality and unequal redistribution of wealth can lead to social conflicts and dissatisfaction of people.
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