Economics and Human Satisfaction

There’s a nice article in a recent edition of The Chronicle of Higher Education entitled “The Economics of Unhappiness“. In this article John Quiggan gives an overview of two recent books that focus on explaining our incessant need to increase our economic status well past the point of meeting our basic needs. Both books suggest that we ought to curb this drive without actually getting deeply into how to be happy with the true ‘economic security’ that most people living in developed economies already enjoy.

In the past I have assigned students in my Human Evolution class a Scientific American Mind article from 2007 entitled “Why It’s So Hard to Be Happy“. As I have indicated in other posts, I am still not sure how to teach human evolution and what ought to be included in my course, but at the time I was interested in the question of human evolved psychological motivations. In essence, happiness is a state of satisfaction, an indication that needs have been fulfilled. It seems paradoxical that people living with fairly profound material security would continue striving for economic gains that may not increase one’s chance of surviving and most definitely decrease one’s chance of reproducing. And yet this is what is generally observed: beyond the boundaries of real need, people strive for more.

One interestingly predictable aspect of human happiness discussed by both of these articles is that it is a socially relative individual state. We do not have hard-wired levels of satisfaction: our feeling of fulfillment can fluctuate widely depending on the quality of life we observe our peers experiencing. This mostly-subconscious socially-local means of gauging when to feel satisfied is a fascinating behavior, and one that seems far too universal to be a purely cultural phenomenon. Sure, we westerners live in a culture that is seeped in media that implores us to keep up with our peers by buying more, but I tend to think that this media is far better at amplifying existing instincts than manufacturing new ones from whole cultural cloth.

If the tendency to gauge one’s happiness based on a comparison with our peers is an evolved behavior pattern, what selective forces would make this behavior adaptive? Especially given that reproductive success and economic success are inversely related in present-day human societies, it is a bit mysterious why we might have a built in “economic striving” instinct. But if you consider where we as humans have lived for most of our evolutionary history, some possible explanations for relativistic economic envy make sense. Even very recently we lived in very small communities, so it is important to remember that our basis of comparison was very small. For the most part we only had local neighbors to compare to, and feeling some anxiety and unhappiness upon seeing their greater success would make sense on two fronts.

The first front has to do with one’s own performance. Let’s imagine that you are a gatherer and you head out into the forest work hard to find food but consistently bring back fewer and/or lower quality foods than your neighbor. Here anxiety about one’s relatively poor wealth would make sense, begging the question “what is my neighbor doing that I am not?”. Maybe she knows better hunting grounds, or she awakes earlier and spends more time foraging. Whatever I conclude, using my local neighbor as a basis of comparison for assessing my own economic performance makes sense because chances are she is working with the same basic resources and environment that I am. Envy has the potential to motivate optimal performance. On the other hand if I am bringing back the same amount of food as my neighbor (or neighbors, as more points of comparison provide a better base of information), I can rest assured that my efforts are adequate in the current environment. Given that environments may shift, it makes a lot more sense to gauge one’s economic success based on a comparison with one’s peers than it does to have an absolute standard for success.

The second front has to do with one’s social interactions, and in this regard is a very different kind of explanation. While comparing to others is a great way to gauge one’s performance if one is competing independently for resources, when one is working with others to cooperatively gain access to resources, comparing serves a different function. In a highly-integrated and interdependent cooperative society, one watches the economic prosperity of peers not to gauge one’s own effort but to watch out for cheating by those peers. If we are working together towards economic prosperity, we had better not enjoy very different economic outcomes. Here “keeping up with the Joneses” is really about making sure we are not getting screwed over by the Joneses.

So how does this all apply now? One of the challenges of modern society is that it presents us with a myriad of social models with which to compare our current state of emotional and economic prosperity. And here’s where we find ourselves in an evolutionary mismatch. While it might have made sense to feel bummed or angry that other members of the tribe were enjoying greater prosperity than you back when we lived in small groups, it probably does not make a lot of sense to compare yourself to people who are not a part of your social group. And yet we live in an environment in which it is possible to have meaningful social contact with hundreds of people and have social knowledge of the lifestyles of millions more, many living at great cultural and geographic distances. So we do compare, but who to compare to is confusin. Even in our local communities, there are usually points of comparison both far above and far below us on the economic spectrum, and for both of the evolutionary rationales suggested above it makes sense that we focus on bringing ourselves up to the level of our most well-off peers. But one of the many problems of modern life is defining who is in one’s social group: who is my peer? How one answers this question is going to have a lot to do with one’s sense of economic satisfaction.

So how should an individual deal with the problem of happiness in relation to their economic status? I suggest that here self-knowledge is the key. Knowing that it is natural to feel envious of others who have more, one can inoculate oneself against allowing these emotions to play a major role in dictating one’s behavior. Knowing that modern society — with its great economic disparities and potent communication to amplify knowledge of these disparities — creates an illogical string of envy all the way up the social class hierarchy at least provides the opportunity to reject instinctual envy in favor of a more enlightened appreciation of just how well off we are compared to our ancestors. And as the Scientific American Mind article points out, one can also manipulate one’s own sense of relative prosperity by spending more time around (and hopefully in aid of) people who enjoy less social success.

Of course you could also argue — as I probably would — that economic striving due to class envy is such a potent social problem that we ought not just leave its solution to enlightened individuals. Failure to rein in the “more is better” culture that is produced by economic striving will eventually lead to the ecological collapse of the systems on which we depend, so there is a common interest in dealing with this phenomenon. At the larger social level we need to lower inequities, which can be accomplished by expanding opportunities for those at the lower end of the economic spectrum (for instance by making higher education free) and contracting the potential for profit at the higher end of the economic spectrum (for instance by making it very hard to earn exorbitant wealth by investment rather than labor). Whatever we decide to do in terms of policy, that policy needs to keep in mind the very relativistic envy present in all human societies.