Can The Economy Make You Happy?

Over the centuries capitalism has helped the economy to grow and improved the lives of countless people. But more is now expected as economists hint that a vibrant economy can also make us happy. Are they right?

Many commentators believe that issues like quality of life and well-being are important and should form part of our pay back from a growing economy.

The recently developed science of happiness, which is a combination of economics and psychology, is largely responsible for such ambitious thinking.

The argument suggests that as countries grow richer people grow happier but, in reality, greater economic prosperity doesn’t lead to greater happiness.

Capitalism can’t deliver on such a lofty promise because when people reach a certain level of wealth their happiness plateaus, as they worry about what they don’t have rather than enjoy what they do.

People often grow dissatisfied with what they have if others have more: for many, it seems, success is not enough if others enjoy greater success.

Economists and psychologists see such behaviour as undermining the view that a successful economy should lead to greater levels of happiness.

Work provides an example of the contradiction given the belief that less work and more leisure leads to greater happiness but this is not always the case.

Work for those who enjoy it stretches them mentally and physically to the point of fulfilment as it provides engagement and a sense of meaning and purpose.

It also engenders feelings of self-worth by enabling the achievement of a higher goal thus making the effort expended all the more worthwhile.

Some people enjoy work beyond its financial reward and there is a belief that older people who stop working die sooner than those who stay at work.

Having fun too is not as simple as it once was as people value the challenge and experience of actively doing something more than passively buying something.

Capitalism is often accused of being wasteful as it focuses on materialism and consumerism to the exclusion of other activities and ambitions.

But without such drive and energy the economy won’t grow at the level needed to provide a standard of living sufficient for the majority of people.

While economic growth beyond a certain level may not make us happier a shrinking economy will not do so either.

Capitalism has traditionally been expected to provide people with a decent living rather than extend to the provision of individual happiness.

And perhaps such a goal is enough to expect and sufficient to provide a platform from which to seek our own happiness.

So, capitalism can create wealth and distribute it fairly but it cannot be expected to make us happy as that is something we must do for ourselves.