The more cunning among you will surely say: “And why not both?” » And that’s exactly where a big part of the problem lies. On a planet limited in its resources, it is imperative to question our relationship to wealth… the real one, not the monetary one (even if it can have a certain utility).
Listening to certain economists and politicians, it seems that the ultimate criterion for the evolution of a society is the increase in gross domestic product (GDP) or our financial wealth, whether in relation to ourselves or in relation to to another group, such as a province or country. But what does some scientific research say about this?
A well-known paradox in social sciences and economics, that of Easterlin (named after the economist), tells us that an increase in wealth, beyond a certain point, brings almost nothing from the point of view of happiness.
In other words, once a certain threshold is exceeded, money and its derivatives have almost no notable or perceptible effect on improving living conditions. This is easily explained by what is known as hedonic adaptation. Once removed from poverty and when a certain threshold of satiety is reached, it appears that money has only a negligible effect on increasing happiness or subjective well-being, because we get used to this level of comfort. The problem is that the level of comfort is always relative to a comparison which itself increases.
But why continue to accumulate money and wealth once this threshold has been exceeded? Why do you always want more money? And where, exactly, is this level of comfort or satiety located?
Financial satiety: an important concept to make known
No one would question the words of a nutritionist who would say that a human being will maintain health by ingesting an appropriate number of calories for his physical constitution and his level of exercise; by being insufficient or excessive, calorie intake can be problematic. It’s the same with money… even if we don’t want to see this reality.
A solid study1with 1.7 million respondents in 164 countries, tells us that there is indeed a satiety effect of money on happiness, this being generally measured by the presence of positive emotions and life satisfaction, combined with a relative absence of negative emotions.
For North America, this satiety effect appears at the threshold which is located at US$65,000 (for positive emotions), US$95,000 (for negative emotions) and US$105,000 (for life satisfaction ).
This threshold will vary somewhat2 depending on the geographical location where we are, the gender, as well as the level of education, but the general idea holds up: when a certain threshold is reached, the optimal effect also seems to be achieved. We must therefore simultaneously “raise the floor (by increasing funding for social services)” and “lower the ceiling (with taxes on income and wealth)”.
Bonuses and financial transparency
A particularly tenacious belief is, for example, that certain sectors are more efficient than others, among other things through the use of financial bonuses to “motivate” people. From a scientific point of view, it is generally accepted that bonuses increase the consumption of anxiolytics and antidepressants3 and that these increase the quantity of performance, to the detriment of the quality of performance and the well-being of people.
To qualify these remarks, let us mention that these negative effects can be reduced when the bonuses are informative (rather than controlling), entirely transparent and fair (rather than hidden or ambiguous and unfair), collective rather than individual, and when the criteria are democratically determined. (rather than arbitrary) and that the rewards do not create too much differentiation between those who get them and those who do not.
Recent legislation (e.g. State of New York, California, British Columbia) has also adopted rules which move towards more and more transparency (especially procedural), which is a powerful vector of social justice which should be put forward and encouraged at home.
Happiness as a legitimate goal in itself
A study of 57,932 people4 tells us that a 10% reduction in inequity increases life satisfaction as effectively as a 37% increase in annual income would. And in a sample of 33 countries, over a 24-year period, a 5% reduction in inequity increases life satisfaction as much as an 11% increase in GDP would. It is therefore possible to have prosperity without growth, simply by reducing inequities. This is an almost zero-cost policy that benefits everyone.
Also, an investigation5 with more than 220,000 people, covering the period from 1989 to 2016, shows us that prioritizing work over quality time comes with a cost to the well-being of the nation. The true wealth of a people should thus include the daily temporal affluence and the quality of daily experiences.
The World Happiness Report6.7 is available free of charge, every year, for at least 10 years, to take stock of the happiest countries and the reasons for these findings. By isolating Quebec data from Canadian data8, we learn that Quebec is sixth among the happiest administrative entities in the world, ahead of our counterparts in other provinces; this is an accomplishment that we should all celebrate and improve on together!
The great economist Adam Smith also mentioned, as early as 1759, that “(governments) have value only to the extent that they tend to promote the happiness of those who live under their responsibilities. This is their only use and their only end.”
In conclusion, it seems that criteria other than money, including happiness and time wealth, to name just two, can be more conclusive and powerful indicators of societal progress than is money or GDP. Moreover, these indicators may be important societal goals that are worth pursuing as valuable in their own right.
*Co-author of the book Unleash motivation. With self-determination theory published by EDITO
1. Consult the article published in Nature “Happiness, income satiation and turning points around the world”
2. The study “Income and emotional well-being: A conflict resolved”, published in the National Library of Medicinebrings nuances to the satiety threshold, but the general idea that an effect optimal money occurs at a certain threshold is respected
2. Consult the study “Income and emotional well-being: A conflict resolved”
3. Check out the study Pay-for-performance and employee mental health: Large sample evidence using employee prescription drug use (in English)
4. View the academic article Income redistribution predicts greater life satisfaction across individual, national, and cultural characteristics (in English)
5. Check out the academic article Leisure beliefs and the subjective well-being of nations (in English)
6. Consult the World Happiness Report (in English)
7. Consult the site of a related Quebec initiative
8. Read the column of News “The money of happiness”
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reference: www.lapresse.ca