First of all, we have to acknowledge the obvious. If you lack the barest necessities in life, money can buy a large increase in happiness. In other words, if you don’t have a roof over your head, clothing to protect you from the elements, clean water to drink, or enough food to eat, then money will definitely make you happier. Of course, in modern terms you don’t need all that much money to buy these things. Those of us fortunate enough to live in the modern western world essentially never have this issue. Even the very poorest of our poor manage to meet these basic needs.
But what happens after that point? Happiness research shows us that increases in absolute wealth (a raise, a bonus, a nice sized gift) make us happier… for a brief time. After that, we return very quickly to our baseline levels of happiness. Even very large increases in absolute wealth – such as winning the lottery – only increase happiness temporarily.
But research and psychology also reveal a darker truth about humanity. Changes in relative wealth bring about lasting effects on happiness – even if absolute wealth remains unchanged. The ugly reality is that money isn’t the driver – status is. When we are richer than our peers, we are held in higher status by the group. And human beings like status. Higher status, as a rule, makes us happier. Lower status makes us less happy. This rule is especially true for women. Call me sexist all you want, the science backs that. But it’s true for men, too.
People feel good when they feel like they’re doing better than their peers. Status succeeds where money fails – it can buy happiness.
So what can you do about it? Making more money gives you higher status, right? Not necessarily. If you get a raise but so do all of your peers, your happiness level is unlikely to change. If you win the lottery, your social status isn’t actually likely to go up very much. It might even go down. People tend to look down on those who didn’t earn their wealth.
The socialist paradise of equal income for all is impossible. But even if it were possible, it would be a social disaster. We’d have more depression and unhappiness than any other system we can imagine would provide. People are not rational, and they are not perfectly altruistic. If all are equal, all will be unhappy. This ironclad law is hardwired into our base psychology.
But part of its impossibility returns to that same psychology. The more equal people are in income, the more they will elevate the stupidest shit to the level of status symbol. I’ve watched retail workers decide they’re “too good” to hang out with other retail workers now… just because their shop moved to a “higher class” shopping center. Same employees at both shops, nobody’s salary changed. They’re both still working menial jobs that aren’t really enough to live on. But now one person considers herself better than the other. If we take away money as the driver, people will find other ways to compete for status.
Human beings aren’t pretty. Don’t expect it of them. This isn’t a pleasant truth. But it is truth.
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