The Easterlin paradox, it should be noted, has aroused much debate and contention. In one of the most serious challenges to Easterlin’s findings, B. Stevenson and J. Wolfers (2008) argue that analysis of time series data shows that log GDP (which Easterlin did not consider) is correlated with levels of absolute happiness. Easterlin (2010) responded to Stevenson and Wolfers’s study by noting that their data reveal only a short-term association between log income and happiness and adduced further longitudinal data to show that a longer-term relationship (greater than ten years) does not exist.15 Taking up the question once more, Daniel Kahneman and Angus Deaton (2010), examining US survey data collected by Gallup, found that emotional well-being—feelings of happiness and satisfaction in the moment, as opposed to “life evaluation”—increases with income up to about \$75,000 per year. Beyond that point, any further increases in income do not yield additional increases in happiness.16
The Kahneman and Deaton study suggests that perhaps both Easterlin’s research and the Stevenson and Wolfers study are on to something. Yet, significantly, Kahneman and Deaton did not add the variable of free time to their analysis—nor indeed do many of the other studies on income and happiness. Such studies typically compare reported happiness at diferent levels of income but not at diferent levels of income in combination with diferent amounts of leisure.17 The finding that emotional well-being, in a set of capitalist societies, is, on average, correlated with increasing income up to \$75,000 does not imply that there are not ways of arranging life at lower levels of income, with greater amounts of free time, that produce superior levels of happiness and wellbeing. It would clearly be unwarranted to conclude from the Gallup data that a capitalist society in which everyone earns at least \$75,000, but with all other features of capitalism in place, including its work-time regime, represents the best possible distribution of resources between income and free time. Despite the interpretive controversies around the research on the relation between income and happiness, one firm conclusion can be drawn from it for the purposes of this book: it is certainly not the case that that the empirical evidence supports the proposition that over time added increments of income necessarily increase happiness—even at a rate that is diminishing at the margin.
The research on happiness also provides some more fine-grained information about the sources of subjective well-being, in light of which the pattern of economic growth under industrial capitalism becomes yet more puzzling. Psychologists Leaf Van Boven and Tom Gilovich (2003, Van Boven 2005) found in their research that what makes people happy are experiences rather than the possession of things. Presumably some of those experiences are commodified and, therefore, demand money—but certainly not all of them are. The connection between valued experiences and the use or possession of commodities (or spending of money) is clearly a contingent rather than a necessary one. Indeed, other research on well-being suggests that it is associated with activities that can easily be pursued without much in the way of expenditure. The Gallup data on afect that Kahneman and Deaton make use of, for example, show that subjective well-being is most closely tied to a set of factors that seem to have little to do with direct consumption. These include being treated with respect, having close ties with family and friends, learning something new, exercising a skill, and having free time (Diener et al. 2010). It is not at all clear that the happiness derived from, for instance, the experience of being with friends and family is amplified in anything like a linear fashion, if at all, by the money spent during that experience.
18
Time for Things