Research in Economics Challenges the Equation that Wealth Equals Happiness

Studies prove that beyond a certain income, additional income does not necessarily increase happiness...

The maxim, “Money can’t buy happiness,” was confirmed in a number of studies in economy and psychology. These studies show that despite the increase in the standard of living and wealth in industrialized countries, the level of happiness remains stagnant. In 1974, Professor of Economics at University of Southern California, Richard A. Easterlin, published a groundbreaking study...

The study of happiness is becoming more pertinent than ever in these days of global crisis. The equation: wealth = happiness is at the basis of the existing economic paradigms. To a great extent, it determines our way of life, its quality, our interpersonal relationships, and relations between citizens and state. To a great extent, the belief that wealth=happiness also affects the nature of the entire international economic system...

In his 1931 book, The Epic of America, American writer and historian James Truslow Adams, coined the term, “The American Dream.” He wrote, “Life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement.”...

Tal Ben Shahar is a PhD in organizational behavior and a renowned teacher and writer on positive psychology and leadership...

Another reason for the gap between income and happiness is our tendency to measure ourselves compared to others, more commonly known as “Keeping up with the Joneses”...

Studies were conducted to determine whether a person with a higher income would have fewer worries, compared to a person who could hardly make ends meet...

The findings in the above-mentioned studies, and in many more, challenge the most fundamental conventions in our society. We are beginning to realize that the current equation of money = happiness is simply not true. Instead, the pursuit of wealth causes frustration, harms our health, and damages our relations with others by cultivating competition and self-centeredness. Our thinking is beginning to change from an individualistic and competitive one to one that is more balanced and harmonious with the environment and with others...

On January 20, 2011, Prof. of Political Economy, Robert Skidelsky, a member of the British House of Lords, and author of a prize-winning biography of the economist John Maynard Keynes, wrote, “Capitalism may be close to exhausting its potential to create a better life, at least in the world’s rich countries. By ‘better,’ I mean better ethically, not materially. ...It was, and is, a superb system for overcoming scarcity. By organizing production efficiently, and directing it to the pursuit of welfare rather than power, it has lifted a large part of the world out of poverty...

The reason why the assumption that a large income means more happiness does not reflect reality is because we have forgotten that economics includes a dominant human element. It is a complex element, not an exact science. And most of all, it is hard to measure the human element...

By most indicators, mankind has reached a tipping point. Despair and depression have become far too prevalent worldwide. In Europe, a study revealed that, “Nearly 40percentof Europeansare mentally ill”...