The Happiness-Wealth Correlation

by Charles Hugh Smith

Exactly how correlated are wealth and happiness? We as a society would be well-served by reflecting on that question as financial wealth evaporates.

It is a truism of "advanced" societies that material wealth leads to happiness. Yet the level of unhappiness in the "wealthy" U.S. calls that premise into question. We can begin any analysis of the correlation between wealth and happiness with the observation that some level of prosperity is necessary for happiness but it is not necessarily sufficient for happiness.

Numerous studies have found that some modest level of material well-being is a key to happiness: clean water, shelter, sufficient food, a livelihood, an environment not plagued by random violence or war, etc. But beyond these basics, rising wealth and income add very little to happiness.

We habituate to higher income very quickly and easily, yet we cannot habituate to a loss of community and friendships; being alone continues to make us unhappy.

Reader Scot572 recently posted an insightful commentary on the Daily Java forum on how America looks to a person from Guatamala. Happiness is a slippery word and state; it comes and goes, and defies a precise definition. Nonetheless there is much worth pondering in this account.

Scot was writing in response to my recent entry Adaptation, Habituation, Consumption and $9/Gallon Gasoline (April 26, 2010).

Thinking about 9 dollar gas prices and our adjustment as a country made me reflect on my many trips to Central America. I will refer to Guatemala, having married a Guatemalan woman I know their hard reality quite well.

Gas is priced in dollars and then converted to the local curency. Right now the Quetzal is around 8 for every dollar. Gas prices are around 30-32 Quetzal per gallon. So figure between 3.50-4.00 per gallon in dollars. The average day wage in Guatemala is around 60-80 quetzal per day, six days a week in the costal region where my wife is from. Even if you spent all your money on gas, you could only buy two to three gallons a day.

So very few people own cars. If you are lucky, you own a motorcycle. Most of your life you never leave the town you are born into. If you do, you take a bus on the rare occasion. You buy large bags of rice and beans. You grow what you are able to on your own, you raise chickens for the eggs(which are a big part of your protein intake). Eating meat is for most a Sunday feast, and that is mostly chicken. Beef? Ha. The only place one will see obesity is in the "upper" class or in tourists. It is a classic case of 10% wealthy, 90% poor.

You learn to climb Mango trees as a child, there is no money for a bag of M&M's, a fresh mango is pretty sweet. You walk everywhere you can. Family is central to your life and survival.

The most interesting difference I have seen with my own eyes is this: They are much more happy than we are.

My wife was amazed at first in this country, the buildings, the malls, the roads. The safety of non- corrupt police. The ability of even those lowest on the rung to make money. 300 dollars a week is 2400 quetzal per week. Everyone has new clothes. Everyone drives a car and most own two or three extra ones. She was astonished that I lived alone in my house before we were married. How huge it was for just one person! "What a waste" was the first thing she said. She had grown up in a house half the size with 8 people in it.

But that was only the begining of her amazement. She was amazed at how alone we are, us North Americans. How so many live alone or only in pairs. How we drive alone in our huge cars. Work alone in our cubicles and offices. Spend holidays alone or with a few family and friends. Sit alone and watch TV/or on the internet for hours on end. How so lonely our world looks to her eyes.

Why do we work so hard to have so much? Waste our lives for more and more money and wealth? Amazed that I rarely take a day off. And this is life? She has a great perspective. She really hates our Christmas celebration. There in their poverty, a gift is rare and very special. It has meaning. Their streets are a party, a celebration of what they believe. A community experience with revelry all night long. Togetherness. She was again amazed when all we do here is spend months buying presents and then open them in a flurry that lasts a few min. No meaning to the orgy of our excess.

Our excess is the exception among the 6 billion of the world. We forget that easily as we cling to it. Like you said in your blog, humanity adapts. So will we.

Thank you, Scot, for this thought-provoking account.

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