Global Crisis/  Innovation Blog

More Stuff, Less Happiness – Something Is Very Wrong!

By Shlomo Maital

  

 

  Tammy and Logan Strobel:  Live on Less!

For years, as an economist, I taught students about something called a “utility function”.  The inputs were material things or income. The output was “utility” or happiness. And of course, the more stuff, the more income, the more happiness.  It was always, everywhere, a rising function.

   Wrong.

   U.S. per capita income went from $24,079 in 1980 to $40,454 today. This is a steep rise of 100 per cent (double), despite the global 2007-9 crisis.  Did Americans’ happiness double too?  Or even rise?   I doubt it. 

     Economists (quoted in USA Today, “Is our standard of living better than ever?” , Feb. 4-6, 2011, p. 1)  say, “people grossly underestimate our progress over time because of technology”.  Ohio State economist Richard Steckel urges people to shut off their electricity and plumbing, to see just how great things are now, relative to the past.

     In other words, we’re just dumb. We’re way better off, but we just don’t realize it. 

   “People earning $200,000 a year are feeling and behaving like those with half that income,” says the CEO of First Command Financial Services. 

     The USAToday article describes an Oregon couple, that asked themselves seven years ago, how much does it take to live comfortably these days?  Their answer:  $20,000 – $25,000.  Result:  Tammy Strobel gave up a job in an investment firm, cut her income in half and chose to live cheaper and simpler.  She and her husband limited themselves to 100 “things” (possessions) each.  “Taking a step back from materialism helped me understand the big picture”, she says. 

      According to a USAToday poll, only 3 per cent of people think it is possible to be comfortable on less than $20,000 a year.  Nearly two-thirds think $50,000 a year is the minimum, and 25 per cent think $100,000 is required.  Ten per cent think $150,000 a year is the minimum!

    There are two strategies in life. One is to constantly boost one’s income to match rising spending.  A great many people find this is not the road to happiness, because the added ‘stuff’ the income brings is not the source of wellbeing.  A second route is to spend less and less, to adjust spending to income, and to treat non-work time as ‘income’ by giving it a value, often very high.  Very few people even consider this option.  No sane business or politician would encourage it.  But it may be the route to true sustained happiness, for individuals and for our planet.