Does Money Make Us Happy?
By Matt Savinar
If you follow this site and others like it, you no doubt have read multiple articles and studies which show there is no link between money and happiness. A couple examples of these in case you missed 'em:
Articles such as these have led many to proclaim things along the lines of "aha! you see it's true, money does not make you happy" or "see this proves we need to move away from focusing on money." If you follow the Peak Oil or sustainability blogospheres or attended any relocalization meetings/conferences you are probably familiar with the sentiment(s) I am referring to. In fact, you may believe them yourself.
I. A Test
Well let's test the hypothesis that "money does not make you happy" shall we? Assuming you are somebody who believes money and happiness are not correlated, I challenge you to do the following:
1. Go to your bank
2. Wire me half the money in your account
Once the transaction is complete let's see who is more happy and who is less happy. My guess is I will be more happy and you will be less happy.
Me have more money = me happy
You have less money = you sad
Of course, you may claim not to care about giving me half the money in your account. If that's the case let me ask you: what do you think is going to happen later in the day when you tell your spouse or partner:
Honey, guess what!? I just wired half the money in our
account to some guy on the internet!!!"
My guess is if you weren't already less happy you will be after witnessing your spouse's reaction to this announcement. If you're a heterosexual man I suspect your wife's reaction to this news will make Lorena Bobbitt look like a sweetheart by comparison. (1)
"Some things are nonnegotiable." (2)
But wait a minute, all those studies show that money and happiness aren't correlated. Yet our our little experiment shows they are correlated! What gives?
II. What is the purpose of our emotions?
In order to understand what does and does not make us happy, we first need to have some idea of what purpose our emotions serve.
I strongly suspect they are there to help us move in a direction most likely to help us or members of our tribe survive (stay alive). Think of them as evolution's (or God's) carrot and stick with happiness and joy being the carrots, depression and fear being the sticks.
Energy is the basis of all life. We need it to survive. Thus, if we accept our emotions evolved (or were given to us by God) to help us survive, it makes sense that our emotions evolved to help us acquire more energy as, generally speaking more energy = more life.
Put another way: you can think of your brain as a computer that has been optimized to keep you alive. Since energy is the basis of all life, you can think of your brain as a computer that has been optimized to acquire as much energy as possible. The emotions produced by this computer act as, for lack of a better work, a "motivational compass" calibrated to maximizing your supply of energy.
Pictured above: human computers
on permanent standby mode
Emotions such as happiness and joy will get you to do things which move you towards greater amounts of energy. Fear will get you to do things which will move you away from threats to you or your energy supply. Depression will shut you down when your mind perceives either A) a need to conserve resources or B) that whatever you're doing is not the thing likely to bring you the most energy.
Some examples:
A. The purpose of fear/anxiety
Fear likely evolved as a mechanism geared towards keeping you safe. For instance, imagine yourself out in the wild back in the hunter-gatherer days. You see a big nasty looking wildabest voraciously salivating all over the place, galloping on all fours at top speed in your direction. You quickly ascertain this thing is fixing to eat you for dinner. What do you do? Most likely, you get scared and run up a tree, into a cave, or where ever else you perceive to be a safe spot while yelling to your fellow hunter-gatherers something along the lines of "run, run, everybody run! Dick Cheney's coming this way!!!"
Pictured above: Big nasty wildabeast
You still see this fear mechanism at work in the modern day. For instance, you've probably had at least one supervisor the very sight of whom would cause you to run and hide in the office bathroom.
Pictured above: A former supervisor of yours
The mechanisms at work as you haul ass through your cubicle farm are the same that were at work in your ancestor when he/she was hauling ass through a savannah 25,000 years ago.
B. The purpose of depression/pessimism
I suspect depression evolved as a mechanism geared towards preventing you from expending energy on endeavors not likely to improve your chances of survival. For instance, imagine yourself out in the wild during a time of famine. After realizing there is no or little food to be found you go back to your cave, become depressed and just lay down. Not very much fun but it does serve the purpose of conserving energy.
Meanwhile your happiness-mongering neighbor is out running around looking for food that is not to be found. "Great elders of the CERA tribe say there is plenty of big game left to be found!!!", he tells you just as he runs out of the cave.
In this case whose strategy is more likely to keep the person alive?
The optimistic person is going to be out running around burning his body's reserves of fat (energy) without getting anything in return. He'll deplete them and then die.
Meanwhile, the depressed person is going to sit in his cave and conserve energy. With some luck his body's energy stores will last long enough that a mastodon or some other large animal will wonder into the campsite. He can then kill it and eat it. Since the happiness-monger is now dead, there is more food to go around for the depressed person and his klan.
Who's happy now beyootch?
In the modern day a lot of people are depressed about their dead end jobs. In many cases whatever they are doing for employment is not the optimal use of their talents. The feeling of depression kicks in and the person starts thinking of or looking for more effective ways to get energy. (i.e., job that makes better use of their talents.)
C. The purpose of happiness/joy
Happiness likely evolved as a mechanism to keep us moving in the right direction which is generally up the curve of energy availability.When your mind perceives that you are doing something likely to make more energy available to you it releases the happy brain chemicals such as dopamine. It's as though your brain cells see whatever it is you're doing and think to themselves, "Oh my God, he's doing something right! Quick somebody release the dopamine so he'll do it again!
As an example of this: a few months ago I spoke with some members of the NYC Peak Oil Meetup Group who had taken a wilderness survival class where they learned how to forage for things such as nuts. They reported that taking the class made them feel happy. One person said something along the lines of "it's weird cause I know it's not like this one course is going to provide me the skills I need to save my ass but I felt really good nonetheless." I told him that's because your brain doesn't release dopamine based on how it perceives your current situation from an absolute standpoint. It release dopamine based on how it perceives your current situation from a relative standpoint: is it getting better or stagnating/getting worse?
In this case, being able to forage in the wilderness may bring you greater amounts of energy (food) once fossil-fuel powered agriculture collapses. Thus your brain released the dopamine in hopes you will continue to develop your foraging skills.
"City folk? Great, there goes the neighborhood."
It's probably no coincidence that happiness in the United States peaked in the early 1970s just as yearly increases in yearly per-capita energy availability were their highest ever. From a recent Los Angeles Times article entitled "Utopia Lost":
According to the National Opinion Research Center, American
happiness peaked between the mid-1960s and 1973.
Consider that data point on happiness in light of the following data points on yearly increases in per-capita energy availability: from 1950 to 1970 the average American saw their access to energy increase by a whopping 48%. From 1970 to 1990 it only increased by 2% and from 1990 to 2004 it only increased by 1.6%. (Click here and scroll down a bit if you want to confirm these data points.)
Please note as this is a key point: the relevant data point(s) is the relative amount of increase or decrease, not the absolute amount.
As far as happiness in America is concerned,
it's been all downhill since the 1970s.
III. So does money make us happy or not?
As studies linked up above have shown, the absolute amount of money you have doesn't affect your level of happiness very much. What these studies, and those who cite them, typically miss is this: happiness is both relative and dynamic. It's a transitory emotion that exists only so long as your subconscious perceives you are moving in a direction which will make more energy available to you. ("poweringUP")
This is why lottery winners see their level of happiness spike up but then return to their original level within a few years. Once the money is in the bank the person's brain looks around and thinks, "okay we're higher than we were before but now we're at a plateau/standstill again. How do we keep moving up?" (Same is true for people who purchase expensive homes, cars, etc.)
An example a little closer to home than winning the lottery might help illustrate this:
A person who makes $100,000 a year is likely no more or less happy than a person who makes $20,000 a year. However, if the person making $100,000 a year gets a $30,000 paycut, he/she is likely to suffer anxiety or depression until he/she gets his income moving back in an upward direction or finds some other way to acquire greater social status. Meanwhile a person who makes $15,000 a year and gets a pay raise to $17,500 is likely to be quite happy.
"Woohoo, I got me a raise!"
At first this may not make any sense. After all, the first person is still making 400% as much as the second person. If money is correlated with happiness why is the higher-earning person not any happier than the lower-earning person? Shouldn't he be happier? But if money isn't correlated with happiness why is the second person happier after getting a raise?
The answer is simple: as explained above happiness is generated not because of a person's current condition but by whether the person's condition is improving or deteriorating. Since the first man's financial condition is decorating he feels sad. Since the second man's financial condition is improving he feels happy.
IV. I gave away some of my money and was even happier.
I piss on your theories!
Giving money (or time or energy or whatever) away results in reciprocal altruism. Your brain makes you feel good when you give gifts or donations because this helps cement or improve your status within the tribe or community. This increase in social status can later be leveraged to acquire more energy. To illustrate: Who is more likely to be afforded greater amounts of energy by fellow tribe/community members in the future: somebody who gave away money or energy when they had it or somebody who hoarded it?
V. I've given up the rat race and moved to an organic farm
and am happier than ever. I piss on your theories!
It sounds like you've missed the point. Here's an example using your organic farm that may help clear things up:
Let's say in year 1, your farm produces X amount of energy in the form of food crops. The next year (year 2), the yield drops by fifty percent. The year after that (year 3), the yield rises by 200%. My guess is your sad during year 2 and happy during year 3. Why? Because during year 2 your access to energy decreased while during year 3 it increased. Your emotional state likely mirrored your farm's ascent/descent up and down the energy production curve. When the farm produced more energy you felt happy whereas when it produced less energy you felt sad.
VI. I spend X hours per day blogging about sustainability for
free and am extremely happy doing it. I piss on your
theories!
Let me guess, when you see an uptick in your blog's traffic, you feel happy don't you? Of course you do. Have you ever considered what the evolutionary purpose of this response?
I strongly suspect what is happening is this: your brain perceives the increase in blog traffic as an increase in your social status which, in human societies, generally means a greater or at least more reliable access to energy supplies. This is true even if you aren't generating monetary income because (as mentioned previously) your increased social status can be leveraged to obtain more energy in much the same way money can be used to purchase it. As an example, you could use your blog as a networking tool to obtain gainful employment, find business partners, people to barter with, deals on food or housing, etc. In each case, the relationship is one which will contribute to the amount or security of your personal energy supply.
In other words, as in the organic farm example cited above, your emotional state is mirroring your ascent/descent up and down your own personal energy availability curve even if you aren't making any money from your blog.
(Note: this same analysis applies if you spend your free time doing volunteer work for your community.)
"My newest post: 'Peak Oil and the end of the 3,000 mile
V. Conclusion & Summary:
This article can be summarized as follows:
1. Our emotions evolved to help us survive.
2. Energy is necessary for survival.
3. Thus it is reasonable to think our emotions evolved to
help us obtain energy.
4. When you do something likely to increase the amount
of energy available to you, you feel happy.
5. Right now, acquiring money is the primary way to acquire
energy. Thus, acquiring more money will make most
people more happy.
6. Acquiring social status is another way to acquire energy
as it can be leveraged in much the same way money can
be.
6. People who claim money and happiness are not correlated
are invited to wire the money in their accounts to me.
Best,
Matt
(1) The Lorena Bobbit comparison was first brought to my
(2) Ibid
Discussion and Commentary:
Discussion and comments on this article can be made over at the LATOC Forum.
Future Article:
At some point I plan on exploring what the implications of these biological mechanisms are for a society that will have progressively less and less energy available to its citizens.
