The latest issue of Foreign Policy magazine has a series of short articles under the title The Next Big Thing: Why Bad Times Lead to Good Ideas.
Under the heading ‘Happiness’, Barry Schwartz offers us the cliches of the happiness research movement: that economists don’t know much about happiness, that we don’t know what’s good for us and pursue more work instead of more time with friends and family, and that GDP is ‘our principal yardstick of social welfare and social progress’.
From these propositions, Schwartz decides to advance this theory:
Financial necessity may give us the opportunity to discover that time spent with loved ones is much more satisfying than time spent with your 76-inch HDTV. Once the crisis lifts, we may not be tempted to go back to living the way we did before, if that’s even an option for those millions who are now losing their jobs, homes, and retirement accounts.
But it is more likely that the US recession will provide evidence against Schwartz’s theory.
While it is true that there are diminishing happiness returns to gaining more financial wealth, there is no evidence that having more wealth is, other things being equal, a negative. But there is evidence that an involuntary decline in wealth is a negative.
The latest HILDA report, which includes a question on life satisfaction (not quite the same as happiness, though there are strong correlations) shows that having experienced a major worsening in finances is one of the worst things for life satisfaction. By a large margin, these people are the least satisfied with their lives of all the respondents in the survey – even less satisfied than those who have gone to jail.
Among those who don’t experience major financial setbacks, recessions are bad for optimism about the future. People who are positive about their financial future tend to be happier than those who are not. Happiness is not just in having material goods, it is in anticipating material goods.
What is far more likely is that after a dip in the happiness statistics in 2008 and 2009, economic recovery will give Americans the opportunity to restore the missing material component of their well-being. Of course this is only one element of happiness – an obvious point, not an insight of subjective well-being research. But it is an element that Americans will want to again pursue.