Happiness, money and politics

By John Ray (M.A.; Ph.D.), writing in 2005


I have been thinking and reading about happiness ever since I came across the work of Michael Argyle on the subject in the 1970s. And, despite many complexities in the research findings, I think in the end the facts about it are surprisingly simple:

It seems that happiness is to a quite extraordinary degree a trait rather than a state. In other words, we are born happy, unhappy or somewhere in-between. There are a lot of people who are always miserable (most Leftists, for instance) and some who are always sunny in mood no matter what. Even when we find that some classes of people (e.g. married people) are happier than others, it seems likely that it is more a case of happier people tending to marry rather than marriage making you happy.

That is of course rather counter-intuitive. We can all think of events that have made us happy or unhappy so we assume that it is events (or at least external things) that are responsible for our degree of happiness. But it is not so. The events only ever have a transitory effect. We soon settle back to how we were before. The most striking evidence of that is that people who have accidents that leave them paraplegic or quadriplegic (i.e. with very limited use of their limbs) do not sink into irretrievable depths of despair but in fact report after a year or so that they are roughly as happy after their accident as they were before their accident. And even demented people tend to be quite happy.

So policies aimed at making people happy are pissing into the wind. They are trying to alter what basically cannot be much altered. So in a democracy, political policies have to be aimed at what people WANT, not at what will make them happy -- because nothing can do that.

Which is very pesky for the Left. They have recently discovered the happiness research literature and it has perked them up greatly. "If money will not make you happy, then there's no problem with us taking it off you", has been their hopeful cry. By the same reasoning one might argue that if losing your legs does not make you lastingly unhappy, then there is no harm cutting everybody's legs off either.

The Research

What I have just said is a rather bald statement, however, so let me look in more detail at what we know:

How happy we are does NOT seem to depend strongly on external circumstances, though it does of course depend to SOME degree on what happens to us. So one person will be happy in circumstances that would make another person miserable. I know. I have observed perfectly cheerful people among the street-sleepers of Bombay. Some people are almost always happy. Some people are almost always whining. Some people just have happy natures and some do not. So looking at what it is that makes people happy is largely futile. In statisticians' terms, you are looking for variance in something that is invariant. Or, putting it another way, correlations with something that is invariant will NECESSARILY be zero. So if you are interested in running a public policy that respects other people, you need to look at what they CHOOSE, not at what makes them happy. And most people choose (for instance) more money rather than less.

And I think that this article shows beyond doubt that degree of happiness is a stable disposition:

"Most people who live with serious disability or illness, such as kidney failure, appear to adapt well and maintain a healthy outlook on life, new research reports. This trend may be surprising to some -- the report also found that people without serious illnesses tended to underestimate the level of happiness in these patients. "We think it is encouraging that for at least some illnesses, life seems to (eventually) go on and that people come to experience good and even normal mood levels," study author Dr. Jason Riis of Princeton University in New Jersey told Reuters Health. "We cannot adapt to anything. But we are generally more resilient than we think," he said. In the Journal of Experimental Psychology, Riis and his colleagues note that this is not the first study to show that people can adjust to good and bad life events. For instance, a nearly 30-year old study found that paraplegics were not that much less happy than lottery winners."

And note further this report:

"The senior author of the new paper, Peter Ubel, M.D., has conducted several of these studies, and has found that ill people are often surprisingly happy, sometimes just as happy as healthy people. This suggests an adaptability or resilience in the face of their medical problems. Ubel is the director of the Center for Behavioral and Decision Sciences in Medicine, an advisor to the RWJ Clinical Scholars Program, and author of You're Stronger Than You Think: Tapping the Secrets of Emotionally Resilient People (McGraw-Hill, 2006).

"People often believe that happiness is a matter of circumstance, that if something good happens, they will experience long-lasting happiness, or if something bad happens, they will experience long-term misery," he says. "But instead, people's happiness results more from their underlying emotional resources

And some more evidence that happiness is a personality trait:

"In a boost for exam-flunkers everywhere, a study published yesterday in the British Medical Journal found the levels of satisfaction with life recorded by 550 Scottish men and women aged 84-85 were unaffected by their mental abilities, either when they were young or much later.... The study group, all born in Lothian, Scotland, in 1921, were remarkable for the fact they had all undergone tests of mental ability when they were about 11 years old, and the records had been preserved. The tests were repeated a few years ago, when they were about 79. They each ranked their happiness on a scientifically validated satisfaction scale."

So it is interesting to note that there is a long history of evidence showing that conservatives are happier. The most recent is from Gallup: "Even when accounting for partisan differences in marital status and household income, Republicans are significantly more likely than Democrats and independents to be very happy." Leftists are miserable sods, to put it plainly -- but you just have to hear their constant whining about everything in our society to know that. The implication is, then, that conservatives are born with a happier and more contented disposition and that Leftists want to change things in a futile attempt to alleviate their inborn unhappiness.

In recent years, Left-leaning economists such as Ross Gittins (see also here) have discovered the academic psychology literature on happiness -- and it seems to have given them some relief. The research shows, of course, that higher incomes do not automatically buy you more happiness. Any observer of Hollywood knew that long ago and I guess people have in fact known at least the times of ancient Lydia and King Croesus that money does not necessarily make you happy. In 1 Timothy 6:10 St. Paul probably went a bit too far in saying that "The love of money is the root of all evil" but you get the idea. And the whole story of Job in the Old Testament runs along similar lines. But these days, "If money does not make you happier, then take it away!" is the Leftist reasoning. So that old bit of wisdom has found a new use as the latest pathetic excuse to hike taxes. There is for example a Left-leaning academic (Richard Layard) reported here who points to the fact that getting richer does not necessarily make you happier and who thinks therefore that government meddling is indicated.

So why SHOULD we worry about giving everyone higher incomes if that will not make them any happier? The simple answer: "Because almost everybody WANTS higher incomes" does not seem to have occurred to everybody yet. They seem to think that if money will not necessarily make you happy then governments should not bother with efforts to get more of it to you. But satisfaction, comfort, convenience, leisure options, security etc are not the same as happiness. The strongest external influence on how happy you are is probably your relationships with others. Given satisfaction with your relationships, you will probably remain roughly as happy through a wide range of incomes. But you will still want more of the things that money can buy if you can get them. So you will still say "Yes, please" to the possibility of more money.

There is a reply to Gittins on the economic issues here under the title "Green economic blueprint is a recipe for tyranny" but it should also be noted that money does appear to have SOME influence. As this article reports: "A new survey of national wellbeing has found the people happiest about their lives are those earning more than $150,000 a year. Those least happy earn less than $15,000 a year". We must again be careful about making causal influences there, however. That happier people are more economically successful seems highly reasonable in view of the role that personal relationships can have in ecopnomic success.

But this article also tends to show that there are ways in which money can buy happiness: "Two studies released yesterday shed new light on the importance of economic circumstances, and undermine earlier findings that poor people are just as happy as the rich. Money doesn't buy Happiness - or Does It? by the Melbourne Institute of Applied Economic and Social Research, at Melbourne University, shows that when wealth - not just income - is measured, the rich are indeed happier than the poor. Earlier research that focused only on income found very little difference in the reported happiness of high-income and low-income people. Mark Wooden, the study's co-author, said: "This has led some people to say money is not that important, relative to other things." However, when people's assets were taken into account - the value of their houses, cars, art works, even stamp collection - a different picture emerged."

So what is going on? Is happiness static or is it not? We certainly DON'T usually think of happiness as a trait. We see it as something that happens to us -- as a temporary state rather than as an enduring trait. We mostly seem to think of it as the sort of thing that happens inside us when we win a prize or a lottery of some sort. And we see UNhappiness as event-related too. If a man's wife leaves him that will usually make him unhappy and if his dog dies that will make him VERY unhappy. But a new love and a new dog will of course immediately restore or even improve the man's happiness. But even without a new love or a new dog, happiness levels will eventually creep back to where they were. In fact even clinical depression (where people are having suicidal thoughts) usually wears off after a couple of years. So it doesn't really matter what a shrink says or does to help a depressed person as long as he can manage to keep the patient alive for a couple of years.

There might be some conceptual confusion in all this. Perhaps the language we use to talk about the subject is inadequate. And a cross-cultural note tends to confirm that. There have for many years been international surveys done which purport to find out which countries have the happiest people. But the big difficulty that the researchers found was that happiness is not always an adequately translatable concept. Perhaps the most surprising case of that is that even a language as closely related to English as German does not have any real equivalent to our word "happiness" (nor do they have a good equivalent for our word "pink" and nor do we have anything like an adequate translation of their word "Reich"). The commonest German translation of "happiness" is "gluecklich" but that really means "lucky", and I well remember an old German Jewish man with whom I was discussing that many years ago. He told me: "gluecklich I am but happy I am not". He meant that he was lucky to have escaped Hitler but still missed much of his old life. So can we really have as a key economic variable something that is not even translatable into German?

One approach that might seem hopeful for researchers into the subject is to talk about "happiness state" versus "trait happiness" but from my point of view as a psychometrician, however, that seems unlikely to help. I spent 20 years measuring psychological traits and have had many papers published on that subject but I have always regarded the measurement of psychological states as too difficult for me. Why? Because what people say about their states seems to be almost the same as what they say about their traits. The best-known example of an attempt to measure both states and traits in the same field is almost certainly Spielberger's work on state/trait measurement of anxiety and I have myself worked with Spielberger's questionnaires. But I found that the questions used to index the two gave generally interchangeable results: People who described themselves as anxious "at the moment" were also highly likely to describe themselves as anxious "in general". And that is not necessarily just a measurement problem, either. It surely stands to reason that people who are anxious "in general" are also more likely to be anxious on any given occasion. That implies to me that very short-term changes in states may be detectable (e.g. the "high" someone gets on being told they have won a lottery) but the sort of medium term change economists are looking for probably is not.

Yet given that traits are by definition both stable and general behaviour tendencies and given that traits are almost always shown to be highly genetically inheritable, any consideration of traits as an economic variable is surely beside the point. Economists are looking for the results of something, i.e. a change of some sort, and something that is inherently not very susceptible to change is surely a strange place to look for change. So it seems to me that any study of happiness as an economic variable must specifically look at states or "moods" -- and that does not generally seem even to be attempted. And the tradition of mood research in psychology exemplified by Joe Forgas and others usually seems to treat moods as short-lived rather than as being the sort of long-lasting change that economists have been looking for.

So I think it is clear that happiness research still has a long way to go and attempts by economists and others to use it for political purposes are totally premature and irrelevant. And, in that context, I think it is time I noted that Leftists are not only using the static nature of happiness to justify higher taxes but they are also using it to attack freedom and variety of choice.

There was a 2004 NYT article (reprinted here) arguing that too much choice can be bad for you. Too much choice is said to be confusing, paralysing and dissatisfying. This is actually a very old idea -- one made much of in Alvin Toffler's 1971 book, Future Shock -- and it is ideal fodder for Leftists who want to dictate to people. As good totalitarians have always said, they can say: "See. Choice is bad for you. WE will make all your decisions for you". This article has some reasonable comments on that:

"In a recent New York Times op-ed touting his book, The Paradox of Choice: Why More Is Less, psychology professor Barry Schwartz criticized political reforms aimed at expanding choice. He argued that "for many people, increased choice can lead to a decrease in satisfaction. Too many options can result in paralysis, not liberation."... There is much to be said against this thesis. First, if choice makes us unhappy, why do so many of us stop patronizing mom-and-pop stores and rush to Wal-Mart the moment we get the chance?... Choice in the marketplace grows out of individual freedom. I want shoes. Many people are free to sell me shoes. That presents me with choices, requiring me to pay attention and to discriminate. What's the alternative? Government control aimed at limiting choice. Where's the evidence that that makes people happy?... Schwartz is a professor. If someone were to suggest that too many books, journals, and magazines crowd the shelves, that all this choice makes people unhappy, and that government could serve us better by restricting the number of choices, Schwartz and his ilk would scream like banshees".

There is of course some truth in saying that choice can be "blinding", as Toffler put it, but everything has its costs and the key question to ask is what if YOUR particular choice (of jam or anything else) were taken away? You would not like it. I myself feel irritated by the vast range of jams, mayonnaise etc that I have to go through in the supermarket to find just the one I want -- but I get REALLY irritated if my particular favourite is not among those on offer. The basic conclusion is that if we want our OWN choice of something, we have to tolerate OTHER people being given their choice too. Freedom has its costs. Nobody has ever pretended otherwise. But take that freedom away and you run into REALLY big costs -- in contentment and much else besides.

And there is the larger question of whether getting what you want makes you happy. Often it may not. As Oscar Wilde memorably wrote in his 1892 play Lady Windermere's Fan: "In this world there are only two tragedies. One is not getting what one wants, and the other is getting it". And having choices and options may be an instance of something that people seek but which does not make them happy. But surely only someone who thinks he is a very superior being (e.g. the typical Leftist) would see that as a reason to stop giving people what they want. Who are we to sit in judgment on other people's choices and on what will make them happy? As Queen Elizabeth I asked the King of Spain centuries ago: "Why cannot Your Majesty let your subjects go to the Devil in their own way?"

One finding from happiness research that seems secure is that happiness has a relative component. An article to that effect is here. Having more of some desideratum (like money) than others around you do seems to matter more than the absolute amount of that desideratum that you have. Note this quote, however, "Another survey, by Town & Country magazine, found those with more money tended to have better marriages, were happier with their friends and found their jobs more interesting." So again the direction of the causal links has to be speculative.

And note that this report shows that although money in general may not buy you happiness, SOME of the expenditures that a higher income enables DO make you happier. And this article summarizes the same set of findings as: "Money can buy happiness and the best investment advice may be as simple as the sports shoe slogan: just do it. That's the conclusion drawn by researchers who set out to identify what sort of spending made people happiest. The psychologists, from Cornell University and the University of Colorado in the US, compared "experiential purchases" - things such as holidays, concerts or dining out - with "material purchases" such as clothing, beauty products, stereos or personal computers."

And money can have an indirect role too. There are here some excerpts from an anti-individual, pro-Green rant by an Australian professor that had a possibly correct point in it that the author may not have fully thought through:

"The findings fit those of other studies that have shown people for whom "extrinsic goals" such as fame, fortune and glamour are a priority tend to experience more anxiety and depression and lower overall well-being than people oriented towards "intrinsic goals" of close relationships, self-understanding, acceptance, and contributing to the community. These results are, in turn, consistent with other research that shows materialism - the pursuit of money and possessions - breeds not happiness but dissatisfaction, depression, anxiety, anger, isolation and alienation. In short, the more materialistic we are, the poorer our quality of life."

And that is where capitalism comes in. Because it makes us all richer, it enables us to concentrate more on non-material things instead of spending all our time scrabbling for a living. I have shown elsewhere that materialistic ambition is highest in poor countries and lowest in rich countries.

So we have three mutually-contradictory findings reported in the happiness research literature so far: 1). Happiness is static. Nothing much alters it for long; 2). Happiness can be improved, but only at the expense of others doing less well than us; 3). Some things can make us happier in absolute terms regardless of what others do.

If that does not represent strong confirmation of my previous conclusion that happiness research is still in its infancy and hence not useful for guiding policy, I don't know what would. My suspicion is that what we will eventually find is that happiness is like most other personality traits -- mostly genetically determined but with some room for environmental influences.

In the meantime, however, as this article says: "Psychologists and 'happiness researchers' are using the finding that Calcutta slum-dwellers and Masai nomads are as happy as American businessmen to argue not only that wealth doesn't necessarily make you happy, but that this shows that investment in economic growth should be replaced by social programs. The trouble is that one conclusion doesn't necessarily lead to the other."

Or as Tim Worstall notes with only a touch of sarcasm: "So-called 'happiness research' has been discussed at length recently with economist and TCS contributing editor Arnold Kling writing and blogging about it, and economist Tyler Cowen responding at his blog. That exchange, and the mention of a new book on the subject piqued my interest and some further research led me to the answer: 60% marginal tax rates, that's what will make society happy."

In other words, Leftists are arguing from the findings about static happiness that "If we take your money away it won't hurt". Odd that people do seem to get really peeved if you rob or defraud them, though! And ask anybody if they would rather spend their own money or have someone else spend it instead and there is not much doubt about what the answer will be. And that's the point: What people want matters. If some arrogant git claims that he can spend my money better than I can, he deserves to be treated like the con-man he is. The fact that overall level of happiness is mainly a personality disposition or trait which remains fairly stable across a wide range of circumstances does NOT mean that people are uninterested in improving those circumstances or getting the occasional "high". But Leftists don't care what people want, of course. "We know what's best for you" is their arrogant mantra.

When Leftists argue from the relative nature of happiness, however, they have a slightly better point. There is some logic in saying that if everybody had exactly the same amount of money, nobody would be made unhappy by others having more. Leaving aside the totalitarian nature of a society that would be needed to achieve such a situation, however, it overlooks that there are heaps of ways that people envy one-another. If they did not envy the next guy for having more money they might envy him for having better looks etc. Trying to equalize people is just a battle against human nature. But Leftists have always ignored the evidence about human nature of course.

I am going to call my discussion of happiness to a halt here but there are some further interesting readings here and here and here and here and here. Gregg Easterbrook's book on the subject is reviewed here and I must of course mention the work of Martin Seligman. As a prophet of happiness, Seligman's surname is very apt. It means roughly "Blessed man".


Bryan Caplan points to the perils of overgeneralization in the happiness field. He notes that, beyond a certain fairly low point, earning more money does little to increase your happiness. Does that mean that unemployment does not matter as long as your welfare payments are adequate? Not at all. Having a job or not is one thing that DOES affect your level of happiness:

"If you delve into the life satisfaction literature, you learn two fun facts.

1. Once you reach a modest standard of living, additional income does not increase life satisfaction very much. Marginal utility of wealth decreases rapidly - maybe even more rapidly than you thought. (Having been a happy grad student on $6000/year, it's not more rapid than I thought).

2. Unemployment per se has a large effect on life satisfaction. If you compare two people with equal incomes, one employed, one unemployed, the unemployed one is typically a lot less happy.

Just to get a feel for these results, Donovan and Halpern report (Chart 11) that about 80% of people in almost every occupational category is "fairly" or "very" satisfied with their lives. Manual laborers and white collar workers are nearly equal in satisfaction. Managers are a bit higher, around 90%. But the unemployed are fully 20 percentage points less likely than most workers to be satisfied with their lives....

If you think this is remotely accurate, you will flee in terror from any regulation that might marginally push up unemployment. Flexible labor markets are more than just efficient. Contrary to popular prejudice, they also make a lot of people happy by making it easy to find a job"

So the high unemployment that tends to go with socialistic economic policies DOES affect happiness -- adversely. The socialist claim that through all their regulations they can make people happier than evil capitalism can seems to be the reverse of the truth.

2019 Update

The Cantril ladder seems a reasonable approch to measuring happiness or something like it in international comparisons. But it is still not widely used in studies of happiness in America.

The World Happiness Report uses it in part and appears to find that happiness is declining to a degree around the world. The causes of that can only be speculative however

The scale has however been little used to study individuals rather than whole populations. So changes in the happiness of individuals can only be inferred from the scores of sub-populations

A summary of the 2018 findings is here

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