What do these findings tell us about human needs, decision-making motivations
and the importance of a constantly growing number of possessions? They indicate
that Easterlin had not so much discovered a paradox as a natural development
process. This is indeed what Martin E.P. Seligman, another renowned positive
psychologist, seems to conclude in an overview article on well-being studies:
economic indicators are extremely useful in analyzing societies in their early stages
when the fulfillment of basic material needs is important but “as societies grow
wealthy, however, differences in well-being are less frequently due to income, and
are more frequently due to factors such as social relationships and enjoyment at
work” (Diener/Seligman 2004: 1).
None of this provides much support for any law-like equation of more economic
output with more happiness for everyone. If societies are built around this equation,
it results in pathways of development and civilizations that psychologists have
diagnosed as resembling a ‘hedonic treadmill.’
In the 1970s researchers started investigating the relatively small and short-lived
effects caused by changes in people’s circumstances. They observed people who
had suffered lasting setbacks to their health or had been afflicted with disabilities.
The results showed that within two years most had returned to the average life
satisfaction they had reported before their misfortune. Only those with severe
disabilities did not fully recover.
The same leveling out holds true in the case of important positive events like
marriage. Reported well-being typically increases one year before and after the
actual event before returning to the mean. Purely economic gains like a salary
increase or buying and enjoying a new car show the same adaptation effects but the
return to the norm is much faster (Kahneman/Krueger 2006: 14).
In the 1990s, Michael Eysenck, a British psychologist, formulated the hedonic
treadmill analogy as a generalization of these findings: the more you have, the more
your expectations rise and the more things you want. So it is not so much the
absolute number of possessions that matters but the relative amount of what we
have and against which we judge changes (Eysenck 1990). So even with a high
income, instead of being happy with what you have, you think that having more
will make you happier. This is especially true when your society promotes ever
more possibilities of consumption and richer lifestyles. One great example of this is
the income levels deemed necessary for having a good life in the United States. The
median estimate of Americans as to how much income they felt they needed to
“fulfill all of [their] dreams” was approximately $50,000 in 1987 and rose to
$90,000 by 1996—in constant dollars (Bok 2010: 13).
Other impressive survey results with the same message were cited by Stephen
Marglin, a Harvard economist in The Dismal Science: How Thinking Like an
Economist Undermines Community (2010). He refers to a 2005 PNC Bank survey
of wealthy individuals.
When asked how much they needed to feel financially secure in the future, respondents
consistently cited a need to approximately double their current level of assets. Those with
$10 million or more felt they needed a median of $18.1 million; those with $5 million or
70
3 Why the Mainstream Economic Paradigm Cannot Inform …
and the importance of a constantly growing number of possessions? They indicate
that Easterlin had not so much discovered a paradox as a natural development
process. This is indeed what Martin E.P. Seligman, another renowned positive
psychologist, seems to conclude in an overview article on well-being studies:
economic indicators are extremely useful in analyzing societies in their early stages
when the fulfillment of basic material needs is important but “as societies grow
wealthy, however, differences in well-being are less frequently due to income, and
are more frequently due to factors such as social relationships and enjoyment at
work” (Diener/Seligman 2004: 1).
None of this provides much support for any law-like equation of more economic
output with more happiness for everyone. If societies are built around this equation,
it results in pathways of development and civilizations that psychologists have
diagnosed as resembling a ‘hedonic treadmill.’
In the 1970s researchers started investigating the relatively small and short-lived
effects caused by changes in people’s circumstances. They observed people who
had suffered lasting setbacks to their health or had been afflicted with disabilities.
The results showed that within two years most had returned to the average life
satisfaction they had reported before their misfortune. Only those with severe
disabilities did not fully recover.
The same leveling out holds true in the case of important positive events like
marriage. Reported well-being typically increases one year before and after the
actual event before returning to the mean. Purely economic gains like a salary
increase or buying and enjoying a new car show the same adaptation effects but the
return to the norm is much faster (Kahneman/Krueger 2006: 14).
In the 1990s, Michael Eysenck, a British psychologist, formulated the hedonic
treadmill analogy as a generalization of these findings: the more you have, the more
your expectations rise and the more things you want. So it is not so much the
absolute number of possessions that matters but the relative amount of what we
have and against which we judge changes (Eysenck 1990). So even with a high
income, instead of being happy with what you have, you think that having more
will make you happier. This is especially true when your society promotes ever
more possibilities of consumption and richer lifestyles. One great example of this is
the income levels deemed necessary for having a good life in the United States. The
median estimate of Americans as to how much income they felt they needed to
“fulfill all of [their] dreams” was approximately $50,000 in 1987 and rose to
$90,000 by 1996—in constant dollars (Bok 2010: 13).
Other impressive survey results with the same message were cited by Stephen
Marglin, a Harvard economist in The Dismal Science: How Thinking Like an
Economist Undermines Community (2010). He refers to a 2005 PNC Bank survey
of wealthy individuals.
When asked how much they needed to feel financially secure in the future, respondents
consistently cited a need to approximately double their current level of assets. Those with
$10 million or more felt they needed a median of $18.1 million; those with $5 million or
70
3 Why the Mainstream Economic Paradigm Cannot Inform …