Upside of the Downturn: Reduced expectations for our material success might make us happier, even if we’re poorer
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We have been living with the consequences of a worldwide economic calamity for several years now. Unemployment hovers around 9 percent, and underemployment may be twice that. The value of our houses, which many have used to finance current consumption and others expected to finance their retirement, may take a generation to recover. People who counted on endless stock-market growth to compensate for not saving are hurting. And new college graduates face a combination of miserable employment prospects and student-loan obligations that in aggregate now exceed the nation’s credit-card debt. Despite the feeble cheerleading that we are on our way out of this morass, there is little reason to believe that things will soon get better, and a real chance, with Europe falling apart and our own government completely dysfunctional, that things will get worse.
We all know the bad news. But is there anything good that can be extracted from all this misery? I certainly don’t celebrate our economic suffering, nor do I wish it to continue, but I do think there are potential benefits. They come from two sources: a reduced focus on material success as the measure of all things (because material success has become less likely), and reduced expectations. Why are these benefits? There has been a research boom in recent years on the determinants of well-being, and it shows that material wealth contributes too little to well-being, once incomes are above subsistence, to justify people’s efforts. And it shows us that lowered expectations may enable us to derive satisfaction from life events that would have left us disappointed in the boom years.
The role of material success in well-being is an unsettled matter. Some evidence suggests that once people reach a certain income level, increases in wealth contribute almost nothing. Other research suggests that “richer is happier.” It’s true that rich nations are happier than poor ones, and rich people in a given nation are happier than poor ones. But there is evidence that over a 50-year period, as per-capita gross domestic product more than doubled in the United States and quadrupled in Japan, well-being hardly changed at all. Increases in material wealth do much less for people than they expect. That is, people devote far more time, energy, and worry to wealth than the payoff justifies.
And gains in wealth are especially unhelpful if material success is a person’s goal, rather than a byproduct of other motivations. Thus people who want to be wealthier and succeed derive little benefit in well-being, while people who become wealthier by accident do benefit. Researchers have also found that what we do has a bigger effect on well-being than what we have. This is in part because we adapt rapidly to what we have, so that the new car, tablet, or smartphone provides a hedonic kick for a disappointingly short time. This is less true for what we do, perhaps because there is so much variety in activities, especially when they are interpersonal, that adaptation is reduced. Our work is a major source of well-being, as long as the work is meaningful and engaging. So is our network of relations with family, friends, and community organizations.