Does money buy happiness? Not! Ah, but would a little more money make us a little happier? Many of us smirk and nod. There is, we believe, some connection between fiscal fitness and feeling fantastic. Most of us tell Gallup that, yes, we would like to be rich. Three in four entering American collegians—nearly double the 1970 proportion—now consider it "very important" or "essential" that they become "very well off financially." Money matters.

It’s the old American dream: life, liberty, and the purchase of happiness. "Of course money buys happiness," writes Andrew Tobias. Wouldn’t anyone be happier with the indulgences promised by the magazine sweepstakes: a 40 foot yacht, deluxe motor home, private housekeeper? Anyone who has seen Lifestyles of the Rich and Famous knows as much. "Whoever said money can’t buy happiness isn’t spending it right," proclaimed a Lexus ad. No wonder many people hunger to know the secrets of "the millionaire mind" and some would sell their souls to marry a millionaire.

Well, are rich people happier? Researchers have found that in poor countries, such as Bangladesh, being relatively well off does make for greater well-being. We need food, rest, shelter, social contact.

But a surprising fact of life is that in countries where nearly everyone can afford life’s necessities, increasing affluence matters surprisingly little. The correlation between income and happiness is "surprisingly weak," observed University of Michigan researcher Ronald Inglehart in one 16-nation study of 170,000 people. Once comfortable, more money provides diminishing returns. The second piece of pie, or the second $100,000, never tastes as good as the first.

Even lottery winners and the Forbes’ 100 wealthiest Americans (when surveyed by University of Illinois psychologist Ed Diener) have expressed only slightly greater happiness than the average American. Making it big brings temporary joy. But in the long run wealth is like health: Its utter absence can breed misery, but having it doesn’t guarantee happiness. Happiness seems less a matter of getting what we want than of wanting what we have.

Has our happiness, however, floated upward with the rising economic tide? Are we happier today than in 1940, when two out of five homes lacked a shower or tub? When heat often meant feeding wood or coal into a furnace? When 35 percent of homes had no toilet?

Consider 1957, when economist John Galbraith was about to describe the United States as the Affluent Society. That year, Americans’ per person income, expressed in today’s dollars, was $8700. Today it is $20,000. Compared to 1957, we are now "the doubly affluent society"—with double what money buys. We have twice as many cars per person. We eat out two and a half times as often. In the late 1950s, few Americans had dishwashers, clothes dryers, or air conditioning; today, most do.

So, believing that a little more money would make us a little happier and that it’s very important to be very well off, are we indeed now–after four decades of rising affluence--happier? Are we happier with espresso coffee, caller ID, suitcases on wheels, and Post-It notes than before?

We are not. Since 1957, the number of Americans who say they are "very happy" has declined from 35 to 32 percent. Meanwhile, the divorce rate has doubled, the teen suicide rate has nearly tripled, the violent crime rate has nearly quadrupled (even after the recent decline), and more people than ever (especially teens and young adults) are depressed.

I call this soaring wealth and shrinking spirit "the American paradox." More than ever, we have big houses and broken homes, high incomes and low morale, secured rights and diminished civility. We excel at making a living but often fail at making a life. We celebrate our prosperity but yearn for purpose. We cherish our freedoms but long for connection. In an age of plenty, we feel spiritual hunger.

The radical individualism and materialism that marked late 20^th century America–what Garrison Keillor has called our "elephantine vanity and greed," or what Jesse O’Neill calls our "affluenza"–has afflicted other countries somewhat less. Yet the paradox is not exclusively American. In Britain, for example, sharp increases in the percent of households with cars, central heating, and telephones have not been accompanied by increased happiness.

These facts of life explode a bombshell underneath our society’s materialism: Economic growth has provided no boost to human morale. It’s not the economy, stupid.

Moreover, individuals who strive most for wealth tend to live with lower well-being, a finding that "comes through very strongly in every culture I’ve looked at," reports University of Rochester psychologist Richard Ryan. His collaborator, Tim Kasser, concludes from their studies that those who instead strive for "intimacy, personal growth, and contribution to the community" experience a higher quality of life. Ryan and Kasser’s research echoes an earlier finding by H. W. Perkins among 800 college alumni surveyed, those with "Yuppie values"—who preferred a high income and occupational success and prestige to having very close friends and a close marriage—were twice as likely as their former classmates to describe themselves as "fairly" or "very" unhappy.

We know it, sort of. Princeton sociologist Robert Wuthnow reports that 89 percent of people say "our society is much too materialistic." Other people are too materialistic, that is. For 84 percent also wished they had more money, and 78 percent said it was "very or fairly important" to have "a beautiful home, a new car and other nice things."

Two principles drive this psychology of consumption. The first is our human capacity for adaptation. Once adapted to a new level of affluence, it takes a higher high to rejuice the joy. I can recall the thrill of watching my family's first 12-inch, black-and-white television set. Now, if the color goes out on our 25-inch TV, I feel deprived. Having adapted upward, I perceive as negative what I once experienced as positive.

Adaptation helps explain why, after a period of adaptation, lottery winners and paralyzed persons report roughly similar levels of happiness. It also explains why material wants can be insatiable—why many a child "needs" just one more Nintendo game. Or why Imelda Marcos, surrounded by poverty while living in splendor as wife of the Philippines' president, bought 1060 pairs of shoes. When the victor belongs to the spoils and the possessor is possessed by possessions, adaptation level has run amuck. (The phenomenon is, however, bidirectional: if forced to simplify our lives, we would eventually adapt and recover our normal mix of emotions. If another energy crisis curbs our "need" for gas-slurping sport utility vehicles, we would, after temporary feelings of deprivation, again adapt to smaller cars.)

The second principle is our penchant for social comparison. We are always comparing ourselves with others. And whether we feel good or bad depends on who those others are. We are slow-witted or clumsy only when others are smart or agile. When one baseball player signs for $10 million a year his $7 million teammate may now feel dissatisfied. (Evolutionary psychologists reason that men seek to accumulate and display more resources than other men for the same reason peacocks compete in tail displays: to compete for female attention.) Further feeding "luxury fever" (to borrow the title of Robert Frank’s stimulating book), is our tendency to compare upward: as we climb the ladder of success or affluence we mostly compare ourselves with peers who are at or above our current level.

Upward comparison is not inevitable: Just as comparing ourselves with those who are better off creates envy and consumerism, so comparing ourselves with those less well off boosts our contentment. In one study, even just imagining and then writing about various personal tragedies, such as being burned and disfigured, led the participants to express greater satisfaction with their own lives. "I cried because I had no shoes," states a Persian saying, "until I met a man who had no feet."

Moreover, one has to wonder, what’s the point of luxury fever? "Why," wondered the prophet Isaiah, "do you spend your money for that which is not bread, and your labor for that which does not satisfy?" What’s the point of accumulating stacks of unplayed CD’s, closets full of seldom worn clothes, garages with luxury cars—all purchased in a vain quest for an elusive joy? And what’s the point of leaving significant inherited wealth to one’s heirs, as if it could buy them happiness, when that wealth could do so much good in a hurting world?

As social consciousness rouses, more people are beginning to veer off the well-traveled road of materialism and individualism. A new American dream is taking shape, one that:

• encourages initiative and restrain exploitation, thus building a more compassionate market economy that shrinks the underclass,
• welcomes children into families with mothers and fathers that love them, and into an environment that nurtures families,
• protects both basic liberties and communal well-being, enabling diverse people to advance their common good in healthy surroundings,
• encourages close relationships within extended families and with supportive neighbors and caring friends—people who celebrate when you’re born, care about you as you live, and miss you when you’re gone.
• develops children’s capacities for empathy, self-discipline, and honesty,
• provides media that offer social scripts of kindness, civility, attachment, and fidelity,
• regards relationships as covenants and sexuality not as mere recreation but as life-uniting and love-renewing,
• takes care of the soul, by developing a deeper spiritual awareness of a reality greater than self and of life’s resulting meaning, purpose, and hope.

Harbingers of this renewal are already emerging, like crocuses blooming at winter’s end.

People are beginning to understand the costs as well as the benefits of the unbridled pursuit of the old American dream—individually achieved wealth. In increasing numbers, neighborhoods are organizing, foundations are taking initiatives, youth are volunteering, scholars are discerning, faith-based institutions are tackling local problems, and civic renewal organizations are emerging. Government and corporate decision-makers are becoming more agreeable to family-supportive tax and benefit policies. Many are developing a renewed appreciation for the importance of our human bonds. A new communitarian movement offers a "third way"—an alternative to the individualistic civil libertarianism of the left and the economic libertarianism of the right. It implores us, in Martin Luther King, Jr.’s words, "to choose between chaos and community," to balance our needs for independence and attachment, liberty and civility, me-thinking and we-thinking.

Fulfilling the new American dream need not return us to the impoverished past or destroy the incentives of a market economy. But it will require our seasoning prosperity with purpose, capital with compassion, and enterprise with equity. Is such transformation in consciousness–from materialism to postmaterialism–possible? It has happened before, and it could happen again. 

Discussion Questions:

1. As the marked change in sexual values and materialism since 1960 illustrates, cultural values are not static. Are there signs that the late 20^th century materialism is abating? Might the 21^st century become the "postmaterialist" age? Or will free market competition, combined with our human tendencies to adapt to new pleasures and to compare with others, fuel a continually spiraling materialism and consumerism?
2. Can educating people about the modest connections between wealth and well-being -- and about the greater important of positive traits, close relationships, and faith communities -- contribute to a more humane and environmentally healthy world? Or is mere knowledge unlikely to be persuasive, much as knowing the perils of smoking fails to liberate a nicotine addict?
3. Is my vision of a new American dream hopelessly utopian? Is it too much to hope that we might complement our expanding social ambulance services at the base of the social cliffs with newly constructed guardrails at the top? Or was President Clinton right when telling the 1998 American Association for the Advancement of Science meeting that "We must envision the future we intend to create"?

About the Author

Social psychologist David G. Myers professes psychology at a place called Hope (Michigan’s Hope College). His writings have appeared in two dozen scientific periodicals, from Science to the American Psychologist, and in more than two dozen magazines, from Scientific American to Christian Century. Among his dozen books is The Pursuit of Happiness: Who is Happy, and Why (Avon). His textbooks, Psychology, Exploring Psychology, and Social Psychology, are studied by students at some 1000 colleges and universities.

Found at The Center for the New American Dream www.newdream.org Used by permission.