More Than Money
Issue #38

Money and Happiness

Table of Contents

“Will Our Grandchildren Be Happy?”

By Bob Kenny

Copyright © 2004 by More Than Money. All rights reserved. Robert A. Kenny, Ed.D., is the executive director of More Than Money.

What kind of world will our children and grandchildren live in? What will they need in order to be successful in their pursuit of happiness? As a parent, I ask myself these questions -a lot. About 75 years ago, the economist John Maynard Keynes wrote an essay entitled, "The Economic Possibilities for Our Grandchildren."1 In it, he predicted that "the economic problem [of scarcity] may be solved, or at least within sight of solution, within a hundred years." He went on to suggest that by the end of a century's time, we would be experiencing "the greatest change which has ever occurred in the material environment of life for human beings in the aggregate." When that time arrived, Keynes postulated, it would be "reasonable to be economically purposive for others."

The United States is fast approaching that time of great change to which Keynes referred. Our material environment has changed drastically over the past 75 years. We live in an immensely wealthy country. We know it, the world knows it, and our children and grandchildren are about to know it. That's quite an achievement, but when it comes to happiness, it might be an empty accomplishment.

Plain and simple, we are not, as a culture, happier. "Our becoming much better off [financially] over the last four decades has not been accompanied by one iota of increased subjective well-being [happiness]," notes Hope College psychologist David G. Myers.2 "Compared with their grandparents, today's young adults have grown up with much more affluence, slightly less happiness, and much greater risk of depression and assorted social pathology."

We are the wealthiest society in the history of the world, and yet the data indicate that it is harder, not easier, to find happiness and meaning in our daily lives. When our material needs are met, why don't we feel happier?

Asking the Right Questions
I think the low levels of happiness in our society may be due to the fact that we are asking old questions-questions appropriate for earlier times, but not for now. Aren't we still concentrating on economic and social questions that were developed 100 years ago? Questions like How do we make sure we have enough? How do we get more and keep more? How do we stay competitive? The economic questions of a century ago may have served a good purpose in their time, but those same questions -and their answers-might not serve our children and grandchildren very well in their pursuit of happiness.

Sample Research Findings on Subjective Well-Being (a.k.a. Happiness)

Once basic needs are met, increases in either national economic growth or personal income have little effect on changes in personal happiness levels of individuals.1

People who report that goals of money, image, and popularity are relatively important to them report lower levels of Subjective Well-Being. Across nations, placing a higher importance on money is associated with lower feelings of well-being.2

It appears that placing high value on money has a negative effect on Subjective Well-Being if it stems from a desire to gain power or flaunt wealth, but not if it arises from a desire for freedom or family security.3

"If I Were A Rich Man...Psychologists Show How Pursuit of Material Wealth and Pursuit of Happiness Are Not the Same" by American Psychological Association, 2004, www.psychologymatters. org/happiness.html .
"Will Money Increase Subjective Well-Being?" by Ed Diener and Robert Biswas-Diener, Social Indicators Research, Vol. 57, 2002, pp. 119"“169.
"Money and Subjective Well-Being: It's Not the Money, It's the Motives" by A. Srivastava, E. A. Locke, and K. M. Bartol, Journal of Personality and Social Psychology, Vol. 80, 2002, pp. 959"“971.

I believe that now, and even more so in the future, we need to ask questions that are more inclusive and global. Not only for the sake of our survival as a species, but for our happiness as well. Formulating the questions for the new era will not be easy. However, a growing body of research in psychology supports what we know intuitively and may be helpful in formulating those questions. According to Tim Kasser, author of The High Price of Materialism (MIT Press, 2002), we can separate our happiness needs into two categories: extrinsic and intrinsic.

Extrinsic goals (I call them material goals) value acquisition, status, image, and receiving rewards or praise. Intrinsic goals (I call them non-material goals) value things like personal growth, caring, trust, respect in our relationships, and community connections. I believe that it is a balance between material and non-material pursuits that produces a fertile breeding ground for happiness. If we want our children and grandchildren to be happy, we would do well to help them find that balance.

What might be the questions that our children and grandchildren will need to ask? A basic organizing question might be What do I do when I have enough? Ancillary questions might be How can I be of help in the world? How do I want to make an impact?

Instead of asking people What do you do and expecting the answer to reveal how much money they make, the question might be asked to mean: What do you do to make this world a better place for others? What kind of volunteering do you love? How are you involved in the lives of your children? What town or community committees do you attend or lead? Isn't that what John Maynard Keynes meant when he predicted that we would become economically purposive for others?

Striking the Right Balance
As a society, when it comes to the material and the non-material, we seem, for the most part, out of balance-perhaps way off balance. If we listen carefully, we realize that even our language is out of balance. When we say things like, "He is very successful," we mean materially successful. When we say, "He is doing well," we mean doing well materially. When we say, "They are comfortable," we mean materially comfortable. Not long ago, I asked a colleague how her spouse was doing. She replied, "Great. He is up 14% for the year." When I expressed surprise at her response, she explained that most people who ask her that question mean, "How is he doing financially?"

Although the pursuit of acquisition, status, image, and rewards has become the dominant part of our pursuit of happiness, I think we are beginning to realize that it is futile to pursue one set of goals to the exclusion of the other, and that the pursuit of happiness is about pursuing both sets of needs and maintaining a healthy relationship between them. When our intrinsic and extrinsic pursuits become balanced, then when we say our children are doing well, others will not automatically assume they are making a lot of money, but perhaps that they are doing good in the world.

Taking on the Challenge
Every week I talk with more and more individuals who are taking on the challenge of this balance and are pondering the "great change in the material environment of life." They are eager to become economically purposive for others and are genuinely concerned about the happiness of future generations-not only that of their own children and grandchildren, but of others as well.

We need to support them in their efforts. Most of all, we need to find a way to incorporate their intrinsic needs and goals into the very definition of what it means to be successful and, ultimately, happy in this country. Redefining the meaning of success and happiness in our culture promises to be one of the central challenges of our time."¢

1 "Economic Possibilities for our Grandchildren" by J. M. Keynes, Essays in Persuasion, London: MacMillan and Co., 1930 [1933], p. 366, as quoted in "The Inheritance of Wealth and Commonwealth: The Ideal of Paideia in an Age of Affluence" by Paul G. Schervish, Philanthropy Across the Generations, Vol. 42 of New Directions for Philanthropic Fundraising, Dwight F. Burlingame (ed.), 2004, pp. 5-24.

2 "The Funds, Friends, and Faith of Happy People" by David G. Myers, American Psychologist, Vol. 55, 2000, pp. 56-67, as cited in "Consumerism and Its Discontents" by Tori DeAngelis, Monitor on Psychology, June 2004, pp. 50-54.