and large are always going to seek more money and will always find as they succeed that money in and of itself is of limited value in increasing their happiness. People may still, quite reasonably, want to increase their income. If they can’t buy happiness, they can make some other good use of the money.
The empirical findings about the relationship between money and happiness thus tell us little that is surprising or even particularly
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dismaying about human beings. They do, however, raise a fascinating question: What are the implications of the hedonic treadmill for good public policy?
THE ULTIMATE IRRELEVANCE OF THE HEDONIC TREADMILL TO GOOD POLICY
The issue is how government enables people to pursue happiness. For the enabling condition called “material resources,” the question therefore is: How may we characterize the state of affairs when everyone in a society has sufficient material resources to be able to pursue happiness? When will we be able to say, “The government of the United States has met its obligation to provide for the material needs of its citizens, and may now devote its attention to other matters”?
One internally consistent answer is “Never.” The fact is that people with more money tend to be happier than people with less money at any given slice in time, no matter how much money the poorer people have. The appropriate conclusion, judging from these data, is that money does make a difference and that the only way to deal with the hedonic treadmill is to treat it as a fact of life and go on using the government to redistribute money from rich to poor, no matter how much money the “poor” have.
The logic is internally consistent. The only problem is that the conclusion is absurd. It is absurd first at the limit. No thinking person believes that more money means more happiness after a point. This assertion is no more controversial than saying that no thinking person believes that a person with five million dollars is likely to be happier than a person with four million dollars. The problem is to find the point after which increases in money no longer facilitate the pursuit of happiness.
We may cut down the range by asking questions of this sort: Suppose that at some time in the future the United States becomes so wealthy that the poorest families have the purchasing power of the current median (more than $30,000 in 1987), while the average income has tripled in the meantime. In that state of affluence, would you be prepared to argue that poor people are prevented from pursuing happiness because they have too little money? Or to put it another way, if all families in the United States had at least that much
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purchasing power, could we then forget about poverty as an issue for social policy and worry about other matters instead (even if the median had by that time increased to $100,000)?
In such a society, “poor” people—that is, people with only $30,000 in purchasing powers—will doubtless still envy the rich people, that being human nature. And it will also be true that people with only $30,000 will be unable to purchase some desirable goods, and will feel that if only they made $40,000, or $50,000, or $100,000, then they would have what they need, and would be satisfied. But granting that these reactions will prevail, the question remains: In designing public policy, will changes in economics be the answer anymore, if our goal is to enable people to pursue happiness?
In answering the question, remember that we have defined out of existence all issues of safety nets and minimum income and the meaning of the poverty line. We are saying that the poorest people in the country are making the equivalent of $30,000 a year. So if we are to say that, yes, people are still prevented from pursuing happiness for economic reasons, the policy prescription that follows is (as far as I can tell) necessarily the egalitarian solution, whereby everyone makes roughly the same amount of money. That would succeed in changing the terms of the envy (people then could concentrate on envying other people their power, talent, beauty, and other unequally distributed gifts). Would it enhance the pursuit of happiness among the previously poor people?
In the egalitarian literature, there is a presumption that income leveling would have some such utilitarian effect, but these arguments have historically been put in terms of societies in which wealth exists side by side with abject poverty. It is an interesting question to put to the egalitarians, and one that is increasingly pertinent in a world of expanding wealth: Why, in pursuing happiness, is one person with enough money impeded by someone else’s having more? As far as I can tell (the reader is invited to work through his own answers), the logic behind an answer ultimately has to hinge on some strange understandings of happiness—roughly on the order of, “my happiness is augmented by knowing that other people do not have more than I do.” Presumably this logic is most attractive to those who see unequal incomes as ipso facto proof of social injustice, an argument that I will not try to contest here.
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But if one is not attracted by the logic of the egalitarian solution, as I am not, then one is left without economic solutions for getting people off the hedonic treadmill. When we reach a state of prosperity in which poverty is defined as an income equivalent to $30,000 a year, the hedonic treadmill will remain, but policy solutions to the unequal happiness of the poorer members of society cannot be based on raising their income (I am arguing). Everything we know about how people have reacted in the past tells us that they are not going to be any happier when they are making $40,000, or $50,000, or $100,000, if the rest of society has continued to get still richer.
It may be objected that by assuming $30,000 as the floor I have fundamentally changed the terms of the issue. Currently, poor people in American society are genuinely in need of more material resources, whereas in my imaginary society the “poor” people who make $30,000 would not have such an objective deficit. This raises the fascinating question of where poverty begins, however. Macaulay, writing of Victorian England, chided his contemporaries for sentimentalizing about a Golden Age in the past when “noblemen were destitute of comforts the want of which would be intolerable to a modern footman.”9 A century later, we think of Victorian England as a swamp of Dickensian poverty. Would a $30,000 floor really be “enough material resources,” whereas the current poverty line represents “not enough material resources”? Or has our current poverty line in fact already passed the threshold of enough?
Suppose, for example, that you put yourself in the position of a person in 1900. The same question is put to you, only slightly amended to fit the different moment in history: “Suppose that at some time in the future the United States becomes so wealthy that the poorest families have an income of the current (1900) average, while the average income has tripled in the meantime?” I suggest that no poor person in 1900 would have imagined that his material needs would not be met by the income of the average American at that time—which is to say, an average that made America at the turn of the century the promised land for poor people around the world.
The point is, of course, that we have already surpassed that millennial state of affairs from the vantage point of a poor person in 1900. The real purchasing power of families at the poverty line in the late
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1980s (in 1987, $11,612 for a family of four) is much greater than the purchasing power of the average family in 1900.* Does this mean that people at the contemporary poverty line are living lives in which they can pursue happiness? Not necessarily. Rather, I am arguing that the reason why they cannot does not necessarily lie in money.
All this is far from demonstrating that people with near-subsistence incomes have “enough” material resources to pursue happiness. In fact, two points should be conceded. One is that providing more money to poor people probably will increase the felt-happiness of the people who get the money in the short term (for the same reasons discussed under the explanations for the hedonic treadmill). The second is that if nothing else is done, poor people who stay at the same near-subsistence income while the rest of the society gets richer will probably become more unhappy than they were before. But our topic is the pursuit of happiness. Once subsistence has been passed, what are the relative priorities to be attached to further augmenting income versus other steps (which may preclude augmenting income)? To explore this