Happiness has been recognized as a valuable, if not essential, component of human nature for many years. But what is it, exactly? This question has inspired religion, philosophy, art, music and more. In many ways, how we conceive individual happiness defines our lives and cultures. In America, the pursuit of happiness is a constitutionally ensured right that is largely predicated upon individual liberties, which essentially amount to property rights. The legal definition of the pursuit of happiness reveals a close association between happiness and material wealth in American culture, raising another age-old question: Can money buy happiness? Nobel-Prize winning psychologist Daniel Kahneman and esteemed economist Angus Deaton believe it can, sort of.
The two Princeton researchers released a study in 2010 called “High Income Improves Evaluation of Life but Not Emotional Well-Being.” They surveyed 450,000 Americans over two years in order to learn what makes us happy. They identified two types of happiness: emotional well-being and life evaluation. Emotional well-being is how we feel at any given moment throughout the day, be it happy, angry, sad, worried or stressed. Life evaluation is how we feel when we retroactively examine the course of our lives and reflect on our personal achievements. The study concluded that money does improve our emotional well-being, but only up to $75,000 a year. Beyond that threshold, no amount of cash can make us happier on a daily basis.
The reason for this, the researchers posited, lies in our ability to adapt. Regardless of how extravagant one’s lifestyle might be, eventually the individual will become accustomed to it, and even the most expensive luxuries will seem mundane. So, when it comes to emotional well-being, a person who makes $75,000 a year is just as happy as someone who makes $75 million a year.
Kehnamen and Deaton postulate that the most influential factors in our emotional well-being include spending time with people that we like, avoiding pain and disease and enjoying leisure. Thus the $75,000 threshold represents the cost of being able to maximize these three things.
Since 2010, other studies have presented evidence that attaining these three things and, by extension, happiness, might be even less expensive. The Marist Institute for Public Opinion suggested that $50,000 was the cap for money-related pleasure, prompting a Forbes article that stated: “Happiness: Now 33 Percent Off!” The article then proceeded to offer tips on how to increase your salary. I couldn’t help but wonder if Forbes’ response to these findings was the right one. Perhaps this information would be more useful if we employed it to initiate a conversation regarding how much money is too much.
Last year, Charif Souki, the CEO of Cheniere Energy, netted nearly $142 million. If we assume that $75,000 is the threshold for happiness, then Mr. Souki made enough money to satisfy the well-being of 1,893 people last year without increasing his own well-being at all. Our economic system doesn’t recognize this as a problem because it is premised on perpetual, indefinite expansion. In this regard, the amount of money that we can possess is inherently limited, and yet our individual ability to amass wealth is not — but perhaps it should be. Because, in essence, the ability for one individual to stockpile a limitless amount of cash robs other members of society the opportunity to meet the basic requisites of emotional well-being.
I think it is time for us to evaluate whether we can continue to think of the accumulation of money as something that can go on uninhibited. In answering this question, we need to consider the people in the upper-echelons and whether their right to pursue infinite profits should be constrained by the rights of the poor to pursue happiness.