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We need to look beyond our new material wealth

It's New Year's Eve. Many of you - maybe even governments and governments-in-waiting - are making resolutions. For the past decade, governments have concentrated on making us prosperous. For the new year, they might consider trying to make us happier.

We are at a golden moment in Irish life. But there is a fork in the road. One way is to proceed with the standard economic and political assumptions: higher income = more choices = higher quality of life = increased societal wellbeing = greater happiness.

If we take that route, we are due for a long, slow disappointment. Because that set of assumptions is simply not valid. Tha is why in all postindustrial countries, politicians are baffled that economic indicators of good growth stubbornly refuse to translate into increased satisfaction with quality of life. If politics in Ireland remains in lockstep with only economic indicators of progress, the likely outcome within a decade is a society deeply in thrall to materialism.

Whatever other moral and aesthetic objections there are to materialism, the evidence is that more of it will not make us happier. There is body of psychological evidence to show that materialism - defined as placing a high importance on income and material possessions - has, in fact, detrimental effects on happiness.

Materialistic individuals are more preoccupied by social comparison, experience lower self-esteem, are more narcissistic and have less empathy for others, less intrinsic motivation and more conflict in their relationships. As if that were not enough, they perceive a large gap between their income and their aspirations.

There is another way. I propose that the new political goal should be to create what psychologist Ed Diener calls the "Economy of Well-Being". In such an economy, the pursuit of the "good life", good in both senses of the word - meaning high levels of individual happiness and the creation of the "good society" - should be the ultimate goal around which economic, health and social policies are built.

Over the last 50 years income and GDP have increased steadily in the US and in other advanced economies. Yet levels of life satisfaction and happiness have remained stubbornly flat. Depression rates have increased tenfold over the same 50- year period and rates of anxiety are also rising.

Even worse, depression is striking earlier and earlier in the life-cycle so that, in contrast to earlier generations, depression and suicide have become diseases of the young.

This law of diminishing returns is driven by a number of factors. In rich nations, as income rises, so do aspirations, requiring more and more effort and income to stay at the same level of wellbeing. The more people get, the higher expectations they develop of getting even more. When these rising expectations are not met, people feel frustrated and dissatisfied and their wellbeing diminishes.

It is true that for poor people and poor nations, increased income does lead to greater life satisfaction. It is also true that life satisfaction is higher in more prosperous countries, though this may be due to the quality of governments in democratic societies.

But when average per-capita income in a society is above the equivalent of $10,000 a year, higher income leads to virtually no or only very small increases in happiness.

Living in a society with high levels of inequality is also associated with low life satisfaction and greater unhappiness (in Europe but not in the US). Unequal societies are generally characterised by conspicuous consumption, and a strong "winners take all" culture. The more individual economic success is valued and socially rewarded, the less hiding place there is for personal failure. Individual failure - economic or psychological - is much less likely to be explained in terms of fate, or destiny, or bad luck. Instead it is subject to a forensic examination of the individual's personal inadequacies - another driver of the increase in depression and suicide.

So, if money does not make us happy, what does? Living in a society where social and political institutions are perceived a effective and fair, where people feel they can participate directly in the democratic process, where mutual trust and tolerance of diversity are high and corruption low - all these are strongly associated with increased wellbeing and happiness.

Being employed and particularly being positive at work are also associated with greater life satis- faction, as well as greater productivity and customer satisfaction.

But perhaps most crucial of all to life satisfaction and happiness is a high level of social connectedness - with family, friends, neighbours and fellow citizens.

Getting married, according to Robert Putnam's calculation, is the happiness equivalent of doubling your annual income. Regular club attendance, volunteering, entertaining and church attendance carry the same happiness dividend. A sense of belonging, to your family, friends, and civic society, serves as a personal safety net and source of support - a major source of happiness.

And that network of relationships also offers opportunities to give support, found to be at least as important as receiving support to our happiness, health and even longevity.

So what are the lessons for governments? To create an "Economy of Well Being", politicians urgently need to refocus attention - their own and ours - not just on the external aspects of wellbeing: creating good economic and social living conditions (with a renewed emphasis on equality, tolerance and participation) but on the internal aspects of wellbeing.

Given the importance of connectedness for wellbeing, these might include, for example, refocusing welfare policies to provide individuals with the interpersonal competencies to deal with life, particularly with relationships.

Providing a new syllabus on emotional intelligence in schools, delivering effective early intervention programmes for young people, couples and families in distress and devising effective policies that strongly promote social and civic engagement would be a good start.

Finally, governments need to supplement traditional economic indicators with indicators of wellbeing: measures of happiness, social and civic engagement, higher-quality relationships, trust, optimism and felt purpose and meaning in life should command as much attention as growth in GDP.

It is the commitment to these indicators that will connect up in a meaningful way politics with the goal that people rank a their most important life goal: their happiness.

Originally published in The Irish Times.

Posted: 31 December 2005