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Last Updated: Thursday, 27 January, 2005, 15:54 GMT
Why money doesn't buy happiness
By Tim Weber
Business Editor, BBC News website, in Davos

Youssou N'Dour
It's not about the money, says Youssou N'Dour

If getting rich makes us happy, then why don't countries as a whole get happier as they grow wealthier? A workshop at the World Economic Forum in Davos tried to find out.

Are you happy? Really, truly happy?

Yes? Oh good! But why? Is it because you are rich, healthy, successful, have a family, or are you just having a good time?

So far, so easy. Even better, neuroscientists could tell me whether you are lying.

They can check whether the right parts in your brain get active when you claim to be as happy as a bunny.

And one thing they have discovered is that money tends to make us happier, says Lord Layard, professor at the London School of Economics and author of the book Happiness.

The conundrum

Now comes the hitch: when a whole society gets richer, there is no overall increase in happiness.

Instead, rich Western societies are plagued with high levels of depression and envy.

Unfortunately, it takes more than an entrepreneur, a media executive, a musician, and two economics professors to find an answer for the conundrum.

At least they gave it a try: "serial entrepreneur" Stelios Haji-Ioannou, Imax co-chief executive Richard Gelfond, Senegalese music legend Youssou N'Dour, Yale professor Robert Shiller and Lord Layard.

Pay taxes, be happy

Are you satisfied earning one million dollars if your neighbour rakes in two million?

Money may make you happier, says Lord Layard, but when you judge your wealth (and thus your happiness) you measure it against the people around you.

Even worse: Western societies make this "terrible error" of telling people they should work ever harder to compete.

What a waste, says Lord Layard (possibly tongue in check) and suggests that only higher taxes can force people to stop competing and restore a healthy, happy work-life balance.

The lesson: pay high taxes, don't work yourself to death, and live happily ever after.

Play football, be happy

Not so, argues Stelios Haji-Ioannou, boss of Easygroup and amongst many other things founder of budget airline Easyjet.

Greece winning Euro 2004
The joy of victory

People quickly get used to their wealth, just as they get used to their own beauty.

As a result, having tons of money won't make you happy, and as proof there are plenty of unhappy rich kids, says Mr Haji-Ioannou (and he should know - he once was one himself).

Instead we should take a Greek lesson: never was his home country happier than after Greece won the European Football Championship and hosted the Olympics last year.

The lesson: play football, and "don't try to fix happiness with taxes or wealth".

Be competitive, be happy

But being an achiever and rising out of poverty surely must bring happiness, argues Richard Gelfond.

And once you are rich you can afford the "creature comforts" that make life pleasant and happy.

The lesson: "wealth plays a bigger factor in being happy than we all would like to admit."

In surveys, people consistently give three reasons for their personal happiness: wealth, family and health.

Being richer affords you better health, and in all likelihood better relationships as well, believes Professor Robert Shiller.

The lesson: "we can use increased wealth to create happiness," but if we aren't happy yet, we just don't go about it the right way.

Get grooving, play football, be happy

Forget money entirely, says Youssou N'Dour.

There is plenty of happiness in Senegal, even though its people are not wealthy at all, says Mr N'Dour.

"Just see the joy that music and entertainment can bring to the boys in the poorest parts of Dakar."

But he concedes that one thing was even better: the moment when Senegal beat France in the 2002 Football World Cup.

The lesson: if you're happy and you know it...

The happy factor

The audience was not convinced.

"What about values?"... "Why are deeply religious people usually so much happier?"... Are "television programmes about the rich and famous", is the "pop culture celebrity cult" the source of all unhappiness?

Maybe happiness is like a forest that from time to time needs a fire - or suffering - to grow happily?

There was agreement on just one thing: governments will find it difficult to legislate for happiness, although they can clear some of the obstacles out of the way.

As the discussion wrapped up, Youssou N'Dour grabbed the microphone and sang us a song about happiness.

And so we went back into the bitter cold of the Davos night.

Feeling strangely serene, even happy.


What do you make of the observations in this article? You can send us your views using the form at the bottom of the page.


Your comments:

An interesting article. Its all a product of your upbringing, I think. Money makes me very happy and it makes my wife happy too. As such, we both work very hard in the City to make as much as we can. We have also decided that we don't want kids as basically they will get in the way of this objective. Shallow? Selfish? Maybe both, but we love the lifestyle that having money has allowed us and are truly content.
Andy, London

And I thought money was the root of all evil? Or is that Greed and Envy. The root of happiness is giving and never more so than when you have lots of money to aid you to give.
Mike, UK

Happiness is relative. It comes with the balance between aspirations/expectations and realities of life. Imbalance between these factors leads to unhappiness.

The factors that control aspirations are envy, greed, self-actualization and lust for power.

People interested in happiness try to match realities with aspirations by their hard work and intelligence. Failure to do so and existing hurdles in the way to do so lead to unhappiness.

Lowering the ambitions during the time of unhappiness can match it with the reality. This time window helps to generate ideas and tips to walk from reality to ambition via a smarter route in the next attempt.
SUNIL PURI, Chicago, USA

Money doesn't always bring happiness but at least you can be miserable in comfort!
ged, liverpool

Consists of recognizing that everything is inter-connected. Everything in this Universe is dependent on something else. If you send out love along those connections - if you truly see and acknowledge the beauty of a tree, the magnificance of the ocean, or truly see & acknowledge the strengths, beauty, and essence of another person - then that love you send out is what you feel internally, as happiness.

Every emotion, every deed, every thought, inter-connects with everything else and has an effect.
Mike, Bolton

People compare themselves to those around them. If an entire country gets wealthier, individuals do not get richer relative to each other - thus don't notice the increase as much, thus don't get happier.
Dan, UK

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