Sunday, November 21, 2010

declining marginal utility, more is not necessarily better

Just finished reading, "Stumbling on Happiness," by Daniel Gilbert. This is not a book that will help you be happier. But it is a book that will explain how the brain deludes us thinking that we are both happier and unhappier than we really are.

The section that hit me between the eyes was towards the end, on money.

"False beliefs that happen to promote stable societies tend to propagate because people who hold these beliefs tend to live in stable societies, which provide the means by which false beliefs propagate."
-Daniel Gilbert, "Stumbling on Happiness"

"Economists and psychologists have spent decades studying the relation between wealth and happiness, and they have generally concluded that wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter. Americans who earn 50,000 per year are much happier than those who earn $10,000 per year, but Americans who earn $5 million per year are not much happier than those who earn $100,000 per year. People who live in poor nations are much less happy than people who live in moderately wealthy nations. Economists explain that wealth has "declining marginal utility," which is a fancy way of saying that it hurts to be hungry, cold, sick, tired and scared, but once you've bought your way out of these burdens, the rest of your money is an increasingly useless pile of paper."
-Daniel Gilbert, Ibid.

"People in wealthy countries generally work long and hard to earn more money than they can ever derive pleasure from."
-Daniel Gilbert, Ibid.

"Adam Smith, the father of modern economics, wrote in 1776:
"The desire for food is limited in every man by the narrow capacity of the human stomach; but the desire of the conveniences and ornaments of building, dress, equipage, and household furniture, seems to have no limit or certain boundary."
-Daniel Gilbert, Ibid.

"If no one wants to be rich, then we haver a significant economic problem, because flourishing economies require that people continually procure and consume one another's goods and services. Market economies require that we all have an insatiable hunger for stuff and if everyone were content with the stuff they had, then the economy would grind to a halt. But if this is a significant economic problem, it is not a significant personal problem."
-Daniel Gilbert, Ibid.

"...the fundamental needs of a vibrant economy and the fundamental needs of a happy individual are not necessarily the same. So what motivates people to work hard every day to do things that will satisfy the economy's needs but not their own? Like so many thinkers, Smith believed that people want just one thing - happiness - hence economies can blossom and grow only if people are deluded into believing that the production of wealth will make them happy. If and only if people hold this false belief will they do enough producing, procuring, and consuming to sustain their economies."
-Daniel Gilbert, Ibid.

"In short, the production of wealth does not necessarily make individuals happy, but it does serve the needs of an economy, which serves as a network for the propagation of delusional beliefs about happiness and wealth. Economies thrive when individuals strive, but because individuals will only strive for their own happiness, it is essential that they mistakenly believe that producing and consuming are routes to personal well-being ... this particular false belief is a super-replicator because holding it causes us to engage in the very activities that perpetuate it."
-Daniel Gilbert, Ibid.
Can you imagine if everyone just stopped? What would happen if governments decided that the happiness of people before the state of the economy? What would happen if corporations, institutions and organizations did as well?

I am so tied up in the idea that a little more money would = a little more happiness I can't imagine it myself. If the relationship between money and happiness is not linear, or infinitely exponential upwards, it is silly of me to pursue more of the same for less of my aim.

Perhaps my Dad's right, I have been looking at this all wrong. I should check if I am "hungry, cold, sick, tired and scared." When I am none of these things, I need to remind myself to stop chasing the cash and just bask in the sunshine munching on grapes. I really should. It's just so hard to imagine.

To the question of happiness, I should first ask: "Am I bleeding? no. Am I dying? no. Am I starving? no. Am I terrified? usually, but mostly it's all in my head. Am I tired? often, but it's because I love on the internet until late at night."

Okay, then it's not about the money and what I don't have that can be bought. It must be about something else. Like the internet.