March 22, 2010
Being Richer Than Others Key To Happiness

Relative advantage is key. It is all about status striving. This poses an obvious obstacle in the way of making everyone very happy.

A study by researchers at the University of Warwick and Cardiff University has found that money only makes people happier if it improves their social rank. The researchers found that simply being highly paid wasn’t enough – to be happy, people must perceive themselves as being more highly paid than their friends and work colleagues.

Now, if most people could spend time in virtual worlds where lots of simulated people are poorer than them think of the potential for increased happiness. The problem with The Matrix is that all shared the same common simulated reality. To enable real people to all experience high status it is necessary for simulated people to pose as the poor.

All that economic growth did not increase happiness.

The researchers were seeking to explain why people in rich nations have not become any happier on average over the last 40 years even though economic growth has led to substantial increases in average incomes.

Lead researcher on the paper Chris Boyce from the University of Warwick’s Department of Psychology said:

“Our study found that the ranked position of an individual’s income best predicted general life satisfaction, while the actual amount of income and the average income of others appear to have no significant effect. Earning a million pounds a year appears to be not enough to make you happy if you know your friends all earn 2 million a year”

I view socialism as an attempt to reduce the number of people one has to feel inferior to. Hence its enduring popularity.

Another possibility going forward: genetically engineer some humans to feel happy from sacrifice, poverty, and very hard work. One problem for the wealthier naturals: What's the sense of having more than others if others are genetically engineered to not feel lower in status when you cruise by in your Bentley? Genetic engineering to feel happy about low status seems necessary to make this work.

Speaking strictly for myself: I'd rather have a perpetually young body than higher status. But I expect people with higher status will get access to rejuvenation therapies before the masses do. I'm saving to pay for the first rejuvenation therapies. Fewer status-enhancing posessions now. Younger body later.

Share |      Randall Parker, 2010 March 22 09:30 PM  Brain Economics


Comments
David said at March 22, 2010 9:47 PM:

Low status increases inflammation and reduces your lifespan. Nature is a harsh mistress, pretty much demanding that we play the status game. Most people want to make more money than their brother in law :-)

Clarium said at March 22, 2010 10:11 PM:

What if you are isolated from other people such as being a hikikomori and living in your room, but not working a low prestige job? Would that solve the problem?

Clarium said at March 22, 2010 10:16 PM:

"Another possibility going forward: genetically engineer some humans to feel happy from sacrifice, poverty, and very hard work. One problem for the wealthier naturals: What's the sense of having more than others if others are genetically engineered to not feel lower in status when you cruise by in your Bentley? Genetic engineering to feel happy about low status seems necessary to make this work."

Maybe one could construct servile robots... why does one need low status humans when automation are rendering the ones available obsolete now? Being surrounded by robots would not increase one's social status. Don't we already do that already? Aren't poor people most likely to embrace the opiate of the masses; why genetically engineer them to feel happy when societal instutitions like religion can offer them the false dream of being in the elessian fields beatific vision?

Dowlan Smith said at March 22, 2010 10:57 PM:

David- It might be hard to separate out the cause and effect on the status/inflammation correlation. It might be something straightforward as: lower status => increased stress => increased inflammation. It could also be environmental, or some other cause might produce both the lower status and the increased inflammation.

Clarium- funny thought about the "opiate of the masses". Some drugs (nicotine?) work by directly accessing reward centers of the brain. The process of sanctification could be viewed as a process of manually (or divinely) reprogramming the reward centers to derive fulfillment in things like "sacrifice,... and hard work." Poverty is not itself a goal, but contentment without complacency is.

The tendency of the average human to prefer a negative sum game when the high achievers can be drug down, to a positive sum game were their profit is less, can lead one to despair about human rationality and the possibility of an enduring productive society. Capitalism might be greed institutionalized, but socialism is just as well envy institutionalized.

PacRim Jim said at March 22, 2010 11:37 PM:

Being born into healthy sentient life is the greatest gift the universe offers, as far as we know.
Having a wife and children is second.
Everything else is of an order-of-magnitude lower priority.
People who are cheered by dragging down others have their priorities confused.

Clarium said at March 23, 2010 12:01 AM:

No, capitalism isn't an inherently good economic system for everyone. Surely one could argue that it created wealth through technological innovation and investment of capital. This had short term negative effects such as displacing agricultural jobs and several panics such as the Panic of 1893 which was in part caused by investment and speculation in railroads and the depletion of the US gold reserves by the Sherman Silver Purchase Act. No, the real boon was due to socialistic redistribution of this wealth via New Deal entitlements, de facto economic isolation due to world socialism preventing workers from entering the global labor market and World War II destroying the capital of potent economic adversaries. Furthermore, world socialism by competing with capitalism also increased living standards another way by requiring capitalism to earn its Mandate of Heaven by providing economic prosperity to all necessitating social progress to widely distribute this wealth along with economic progress to enhance the overall size of the proverbial pie. Without communism being a viable competitor, capitalism can abrogate any obligation to social progress and return to its usual mode of being an atavism of Darwinian economic barbarism.

And btw, people were happy in East Germany. It is a myth to portray those who lived in the DDR as unhappy, miserable, oppressed people who yearned for freedom and individualism of capitalism. One could live a content life in the DDR; for instance, one person who did well under capitalism said that he is better off now, but he is not more satisfied. He noted that the poor still did not have the freedom to travel today, and that since he was intelligent, he would still get a relatively high status job such as being the manager of a factory in the DDR/ BTW, East Germany’s coat of arms displays a compass symbolizing along with a sickle and grains demonstrating the harmony among the intelligentsia, and the factory and agricultural workers respectively showing reverence not contempt for administrative and intellectual competence.

His verdict on the GDR is clear: "As far as I'm concerned, what we had in those days was less of a dictatorship than what we have today." He wants to see equal wages and equal pensions for residents of the former East Germany. And when Schön starts to complain about unified Germany, his voice contains an element of self-satisfaction. People lie and cheat everywhere today, he says, and today's injustices are simply perpetrated in a more cunning way than in the GDR, where starvation wages and slashed car tires were unheard of. Schön cannot offer any accounts of his own bad experiences in present-day Germany. "I'm better off today than I was before," he says, "but I am not more satisfied."

Schön's reasoning is less about cool logic than it is about settling scores. What makes him particularly dissatisfied is "the false picture of the East that the West is painting today." The GDR, he says, was "not an unjust state," but "my home, where my achievements were recognized." Schön doggedly repeats the story of how it took him years of hard work before starting his own business in 1989 -- before reunification, he is quick to add. "Those who worked hard were also able to do well for themselves in the GDR." This, he says, is one of the truths that are persistently denied on talk shows, when western Germans act "as if eastern Germans were all a little stupid and should still be falling to their knees today in gratitude for reunification." What exactly is there to celebrate, Schön asks himself?

After completing his university degree, he says, he would undoubtedly have accepted a "management position in some business enterprise," perhaps not unlike his father, who was the chairman of a farmers' collective. "The GDR played no role in the life of a GDR citizen," Birger concludes. This view is shared by his friends, all of them college-educated children of the former East Germany who were born in 1978. "Reunification or not," the group of friends recently concluded, it really makes no difference to them. Without reunification, their travel destinations simply would have been Moscow and Prague, instead of London and Brussels. And the friend who is a government official in Mecklenburg today would probably have been a loyal party official in the GDR.

http://www.spiegel.de/international/germany/0,1518,634122,00.html (a story about that man)
http://21stcenturysocialism.com/article/the_legend_behind_the_wall_01929.html

coldequation said at March 23, 2010 2:29 AM:

That's an argument for mass low-IQ immigration. We're getting a larger underclass to look down on. Neoliberalism FTW.

Sycamore said at March 23, 2010 12:14 PM:

> Low status increases inflammation and reduces your lifespan. Nature is a harsh mistress, pretty much demanding that we play the status game.

Correlation/causation.

Sycamore said at March 23, 2010 12:20 PM:

Nature does demand that you play the status game, actually. But it does so using the incentive of desirable lovers/mates. It could also use what you say, but you need to show that both variables are not driven by a third one that we haven't mentioned, and also that the primary direction of causation isn't in fact the opposite of the direction you suppose.

Sycamore said at March 23, 2010 12:22 PM:

Gore Vidal phrased the exact same idea pretty vividly: "It is not enough to succeed. Others must fail."

Sycamore said at March 23, 2010 12:51 PM:

Greg Clark writes in his book that this type of finding is entirely typical. A sevenfold increase in Japan's income per capita (since the war; specifically since 1958) made no difference in mean self-reported happiness. Nor does this result from all people at all times simply tending to report feeling middling. Rather, the individual variance in happiness within Japan is enormously larger than any fluctuations over time (let alone the net change) in average happiness. (Again, all measurements well after the war.)

"Money does buy happiness, however that happiness is transferred from someone else, not added to the common pool."

However, we have to ask about correlation and causation. It seems odd, and is probably unlikely, but is it possible happiness can drive income to some extent?

Mercer said at March 23, 2010 2:49 PM:

People believe that having a high paying/high status job will make them happy but many people with such jobs are not happier then average. Here is part of a description of working on Wall Street from nakedcapitalism.com:


"But the firms are white-collar sweatshops with glamorous trappings. You do not know how hard you can work, short of slavery, unless you have been an investment banking analyst or associate. It is not merely the hours, but the extreme and unrelenting time pressure. Priorities are revised every day, numerous times during the day, as markets move. You have many bosses, each with independent demands and deadlines, and none cares what the others want done when. You are not allowed to say no to unreasonable demands. The sense of urgency is so great that waiting for an elevator is typically agonizing. If you manage to get your bills paid and your laundry done, you are managing your personal life well. Exhaustion is normal. On a quick run home en route to the airport after an all-nighter, a co-worker tried to shower fully clothed.

These values become deeply internalized. One buddy, a vice president in hard-charging, testosterone-filled M&A, spent the better part of a weekend lying on her side on the floor of her office, reading deal documents. She kept reassuring concerned colleagues that she was fine, until the pain got so bad that she relented and called her boyfriend. He came and took her straight to the hospital. The doctors operated immediately, assuming she had appendicitis. They found instead diverticulitis, which usually afflicts the elderly, and she was so close to a colon rupture that they had to remove half of it.

The partners at her firm instructed her to not to return until she had recovered fully. But this was September. Bonuses were paid at year end, and as she read the unwritten code, and knew that staying away too long would be seen as a sign of weakness. She was back at the office three weeks later, looking wan.

She later became the first woman investment banking partner at her prestigious firm. Her instincts served her well. Or maybe not. She later lost 90 percent of the vision in one eye to glaucoma, an easily treated disease, because her overloaded schedule made eye exams seem like a luxury."

http://www.nakedcapitalism.com/2010/03/indefensible-men.html

This is one of the highest paid professions in the world. Do you really think these people are happier then average Americans?

Brett Bellmore said at March 23, 2010 3:22 PM:

I don't think the appropriate response to "Wonderful theory, wrong species", is to change our species.

There's no obstacle to everybody having above average status, as perceived by themselves. All you have to do is have different people judging their status along different axis. Tough for people who are inferior on every plausible axis, though.

Mike W said at March 23, 2010 7:20 PM:

Randall, your comment about socialism - that it's "an an attempt to reduce the number of people one has to feel inferior to." - gets to what I agree is the heart of the matter.

The trouble with socialism is that for all the academic gussying-up done it's behalf, it is really not economics at all, but an artifact of human psychology.

No wonder it fails as an economic system.

Dave Gore said at March 23, 2010 7:37 PM:

Solution 1: Be wealthy but avoid conspicuous consumption. Then others will feel rich, and so will you.

Solution 2: Get a dog and look down on it.

Clarium said at March 23, 2010 8:33 PM:

"Nature does demand that you play the status game, actually."

No... hikikomori if they have shelter and parents choose to quit and just isolate themselves from the room. Actually poverty and society in general forces one to play, but some people will quit if given the chance.

Nick G said at March 23, 2010 9:20 PM:

This study doesn't look at all of the possible predictors of happiness - it's just evaluating the predictive value of absolute vs relative wealth.

It tells us nothing about the importance of relative wealth vs other important predictors such as health, good social relationships, etc, etc.

Randall Parker said at March 23, 2010 9:40 PM:

Brett Bellmore,

I do not think we can get people to do enough of their judging along different axes. Sure, we can and do get some of that. But not enough to solve most of the problem.

Mercer,

Some investment bankers can handle the pressure without harm to health. They are aiming for high wealth before they hit 40. Eventually they can work much less.

Clarium,

The person sitting alone in their room knows they have low status. That bothers most people.

coldequation,

Bringing in a larger lower class increases the number of people who feel a sense of lower status. The larger lower class becomes a voting block for wealth redistribution.

Randall Parker said at March 23, 2010 9:53 PM:

Mike W,

The fundamental problem with market economics is that it does not address the basic status needs of people.

In fact, the technological progress that has made globalization possible has increased the problems posed by resentment of status hierarchies. Instead of lots of local small hierarchies that have a higher ratio of top dogs to inferior members we get much more massive hierarchies that have a much higher ratio of top people to masses.

Larger scale societies increase the fraction of the population that are followers rather than leaders. The US has 1 top political leader for 300 million people. The Chinese have 1 top political leader for 1.3 billion people. A smaller portion of the society are top dogs when societies get bigger and more integrated into a single status hierarchy.

Dave Gore,

I've argued to a wealthy venture capitalist friend that rich people really ought to adopt low profile lifestyles in order to reduce resentment. The whole society would be better off if they did. Plenty of ways to do that. Houses can be designed to look smaller by, for example, putting in bigger basements and placing trees and other obstacles to obscure their size. Also, do not drive a car that costs $60k+.

But the problem is that some wealthy people want to look at people and know those people feel resentment. Luxury brands advertise to the general public to assure the luxury brand buyer that others will know that their luxury good is very expensive. Curiously, evolutionary psychologist Geoffrey Miller argues in Spent: Sex, Evolution, and Consumer Behavior that high status luxury goods buyers overestimate the extent to which luxury goods will boost their status. Lots of luxury goods are a waste of money in terms of how much they raise your status.

As for looking down on dogs: I'd much prefer to look down on humans. Dogs are just way too cool to look down on.

Brett Bellmore said at March 24, 2010 4:35 AM:

Well, Randall, eventually the low status people can spend most of their time immersed in VR worlds where they're at the top of the pecking order. How much of your time would you have to spend in a simulated pecking order with yourself at the top, to compensate for the time you spent in the real world? What's the minimum effective dose? Probably a better solution than engineering most of us into being a drone class. Easier, too; Who knows how deeply status seeking is embedded in our fundamental wiring?

Mercer said at March 24, 2010 5:36 AM:

"Mercer,

Some investment bankers can handle the pressure without harm to health. They are aiming for high wealth before they hit 40. Eventually they can work much less."

I know that most bankers don't go to the hospital at a young age but they do have to spend their weekends at the office reading legal documents. Who enjoys doing that? The article I linked to says the pressure to work long hours never lets up no matter how long someone works at the firm.

Sycamore said at March 24, 2010 8:40 AM:

> some people will quit if given the chance.

Well, some people are born without a closed cerebrospinal chamber - some people are pathological.

INFIDEL said at March 24, 2010 10:28 AM:

If the future goes the way some are predicting the whole world will be rich or something like that.

There will still be one richer than others, but I doubt that in such a world it'd be as big of a deal.

There's a difference between not having basic necessities like food and living miserably in places like sub-saharan africa and being poor in europe.

If that level of poverty disappears, and then the level of being poor in europe, and on and on to the point where the lowest classes are what would now be middle class in a rich country or even rich, then who cares?

Imagine if everybody had at least a million dollars. Sure, there are ones with 100 million and billionaires, and there could still be resentment, but you can't say those people with the one million aren't happy or would be just as resentful if they were really poor.

Gen-x said at March 24, 2010 10:32 AM:

As a visitor to East Germany in 1980, the comment about East Germany being full of "happy people" is one of the most absurd things I have ever read. Only visiting the defunct concentration camps of Dachau was more ominous, but even then, East Germany had a tangible sense of doom because you knew it was so real and current. Before I passed through the gates of the wall, with guard towers and soldiers toting automatic weapons, I had read a story of how someone had been shot trying to escape over the wall a few days before not that far away. Behind the wall, I saw bleakness. Most unexpected was the relative absence of color and the blandness of the food. A column of soldiers goose-stepping down a cobblestone street was a potent reminder of where you were, and no doubt a reminder to residents of their lot in life. I never saw a smile anywhere - not one. It was odd being a tourist of communism, but an experience I'll never forget.

INFIDEL said at March 24, 2010 10:49 AM:

I wonder if this also applies to other things like beauty.

Chunk said at March 24, 2010 11:42 AM:

As someone who is currently having problems putting food in my mouth, this article seems ridiculous. To say that overall access to resources doesn't make people more happy is stupid... and that some semblance of egalitarianism isn't a worthwhile goal insidious.

If I had a million dollars, and everyone else did, I'd at least have a place to stay, even if it was a cookie-cutter bland storage-locker for humans kind of place. I'd know I had food and medical care if I needed it. I could focus on my true interests, rather than this BS.

hiddensalience said at March 24, 2010 8:46 PM:

I think its worth speculating on some aggravating factors here. I'm pretty confident these are true.

1.) Decline of Christianity. It's interesting you say this Randall:
Another possibility going forward: genetically engineer some humans to feel happy from sacrifice, poverty, and very hard work".
Occasionally this sort of person arises on his own. They're called saints. This study reflects why Christianity encourages a humble, grateful disposition. Certainly Buddhism and other religions address this issue as well. In the west, though, people will find the status hierarchy harder to cope with without religion and the wisdom that it transmits to guide them.

2.) Advertising, the media and the degeneration of culture. Some of our societal institutions actively exploit for profit human insecurities about status. Not to state the obvious, but societies exist where members are not constantly bombarded with messages designed to make people feel insecure. So much of our culture is base because special interests can make a lot of money pushing other people's buttons (and lying to them). Just look at the diet/fitness industry.

DowlanSmith said at March 25, 2010 9:46 AM:

Since it is relative wealth rather than absolute wealth one can just change your environment. Instead of having the worst house on the block, have the best mobile home in the trailer park. "It works for me!"

Watch more "They call me Earl" and less "90210".

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