Why so sad?

The public antipathy towards bankers and the bonus culture is indicative of a broader shift in attitudes: the developed world has suddenly realised that money doesn’t make you happy.

GDP might show off how well the economy is performing but it is not – after a certain point – a useful measure of social progress. Living standards have rocketed within the US and the UK but research hi-lighted in this Guardian piece has revealed that happiness has stagnated.

Wealth and the individual amassing of it have taken precedence over almost everything. This is not just the fault of Sir Fred Goodwin – tempting as it is to blame him for everything – but of society in a broader sense. Labour’s 1997 talk of happiness as a defining measurement of Britain’s success was eclipsed by boasts of unbroken economic growth. The culture of celebrity continues to glamourise money. Children are taught to aspire to being ‘rich and famous’ in spite of the endless examples of people who have been damaged by the media glare and the burden of wealth. 

When did wealth become synonomous with happiness? And why is it only in the face of economic disaster that anyone has stopped to question the validity of this equation?

The financial crisis seems to have acted as a reality check on the world’s value system.

Human relationships and with them the quality of human experience suffered during the glory years. The individualistic drive of a capitalist ideology has damaged mutual respect. Personal relationships have suffered and so has social responsibility. In the wake of the crash there has been much written about the future of capitalism (this FT series is useful) and it has been widely noted that there is a real opportunity for the instigation of progressive agendas around the world, led of course by our favourite, Barack.

Let’s hope that as the G20 grapple with the intricacies of our financial system’s failures, they take a  moment to recognise that pots and pots of money have not made us happy; and, that they take more than a moment to ponder just what it is that will.


One thought on “Why so sad?

  1. Wealth isn’t synonymous with happiness, but there’s a strong positive correlation, and with good reason. More wealth means better housing, nicer food, more convenient transport, better healthcare and education, more spare time and more holidays, a wider range of leisure activities etc. Those things make most people happier and less worried, and certainly the option of having them isn’t going to make anyone unhappy. The conditions that the average Briton lives in have improved astonishingly over the past 150 years, despite two world wars, and all under a capitalist system. To put it in perspective, if the same trend were to be repeated then in 150 years time the average Briton will have the same standard of living as today’s millionaires. Happiness is all very subjective of course, but do you really think the average Briton of the 2000’s is less happy than he of the 1950’s, 1900’s, 1850’s or whenever?

    This article seems to hint that capitalism is bad and there is some alternative system out there that might be better to use. Fundamentally, the free market is the *only* method for rational allocation of resources that works, and moreover it is the method which is the most fair to the most people. Central planning has been utterly discredited – in theory by Hayek, and in practice by the failure of the Soviet Union. I could literally write about this for hours, but basically capitalism is great, money is an essential invention if we don’t want to live in caves and together they’ve brought humankind to it’s present state of advancement: Internet, jet aircraft, eradication of smallpox etc.

    Upturns and downturns are an inherent feature of the capitalist system, and yes, some people will be hard-hit by the downturns, causing much of the unhappiness that you write about. The way to combat this is to ensure that the downturns are less severe, shorter and easier to predict, so that people can insulate themselves from the negative effects.

    The severity of the current predicament was not caused by free markets left to “run wild”, much the BBC would have us believe, but rather by state intervention. The idea that we’ve had genuine capitalism is just wrong. Over the past couple of decades governments have done everything they can to distort markets. In this country New Labour have, among other things, encouraged an unsustainable asset price boom in housing, provided a glut of cheap credit to artificially boost consumer spending and introduced tremendous amounts of moral hazard into financial services through their regulatory regime. All of which prevents the market working properly, as the von Mises Institute explains: http://mises.org/story/3155, and causes lots of misery.

    If we want less of this, the solution is to follow the advice of the Austrian School and stop the state from meddling where it should not. Most importantly, the government monopoly on money should be broken and we should return to as true a gold standard as possible.


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