resources.
This points to the second reason why money has taken on such a central place in social policy calculations: Material resources, alone among the enabling conditions, are fungible. I can use money to buy you a meal or a place to stay. I cannot use money to buy you esteem. Deficits in material resources are in this sense susceptible to “solutions” in ways that the other enabling conditions are not.
The third reason is that deficits in material resources suggest threats to survival. Without food, people starve to death. Without shelter, they perish of exposure. The state of being “in poverty” is loosely identified with a state of being at risk of life and health. The plight of the street people again provides an apt illustration. The street people are in the
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streets and do appear to be in danger of starving—and they are also “in poverty.” The observer may point out that the street people constitute a small fraction of the people labeled “homeless,” and that the homeless constitute a small fraction of the people under the poverty line. He may analyze the data on why people live in the streets, and point out that the reason why people live in the streets in Calcutta or Cairo (no way to make a decent living) applies to only a small fraction of street people in the United States. He may then conclude, with logic and evidence on his side, that the problem of street people and the poverty problem are separate, that the means for solving one are all but unrelated to solving the other. But for most of us the visceral link will remain. Poverty taken to its ultimate extreme means death.
These are some of the reasons why poverty has so preoccupied us. It is the generic stand-in for the social problems of our age. Solve the riddle of poverty, we have often seemed to hope, and the rest of our problems will solve themselves. As long as poverty exists, we have often seemed to despair, nothing else can compensate the poor for their condition. “Whatever progress has been charted on the graph of ‘progress and poverty,’” Gertrude Himmelfarb writes in her history of the idea of poverty, “it is poverty that still strikes the eye and strikes at the heart. It is as if the modern sensibility can only register failure, not success, as if modernity has bequeathed to us a social conscience that is unappeasable and inconsolable.”1
A continuing theme of this book will be that in fact most of the pains and damages that we associate with contemporary poverty in Western societies have little to do with a lack of material resources (beyond a certain point): that money in itself, by itself does not inspirit the dispirited homeless, make loving mothers of neglectful mothers, make a cheerful home of a dump. A few days later, even if the money continues to be provided, the dispiritedness and neglectfulness will be back and the home will be a dump with different furniture. The crucial qualifier, of course, is that phrase “beyond a certain point,” for below that point money can make all the difference in the world. So the topic for now is material resources and an exploration of that “certain point.” When the enabling condition is material resources, how much is enough?
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I will present two talking points. The first is that, for purposes of opening up a wide range of ways to pursue happiness, “enough money” lies close to subsistence—not precisely at subsistence, but close. The second is that the first proposition can hold true, to a far greater degree than we commonly realize, for inhabitants of sophisticated Western societies.
What Is “Enough” Money?
The proposition that “enough money to pursue happiness” lies close to subsistence is a minor revision of the notion that money does not buy happiness. Combine this unoriginal proposition with the truth that you can’t pursue happiness if you’re starving, and the implication for the quantitative relationship of income to happiness is fully defined: If we have an accurate measure of happiness and an accurate measure of income, then the relationship of happiness to income should look something like figure 1.
Happiness is very low until subsistence is reached, rises very steeply immediately thereafter, but quickly levels off as subsistence is left behind. Or, as Maslow would argue, once the physiological needs are met, the next level of needs arises and determines the organism’s state of satisfaction. How does this expectation compare with what is known about the relationship of wealth to happiness?
FIGURE 1. On Money Buying Happiness, Theoretically . . .
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HAPPINESS AND NATIONAL WEALTH
The answer depends on whether you look at the relationship of happiness to income across countries or within countries. If the question is “Are people in rich countries happier than people in poor countries?” the answer seems to be quite close to the expectation. Very poor countries in which much of the population is barely surviving—countries such as India, Bangladesh, and some parts of sub-Saharan Africa—show very low levels of avowed happiness. But this holds true only at the extremes (and even then with exceptions). Avowed happiness rises quickly with national wealth in the early stages, then much more slowly among the wealthier countries. Figure 2 gives a rough idea of the relationship, using happiness data from the Cantril and Gallup international surveys, both of which used a self-anchored scale
FIGURE 2. On Money Buying Happiness, Empirically . . .
Sources: The happiness data are from the Gallup world sample (1976) and the Hadley Cantril data (1965), as reported in Ruut Veenhoven, Databook of Happiness (Boston: D. Reidel, 1984), table e, p. 518. Per capita GNP data are taken from Charles Lewis Taylor and David A. Jodice, World Handbook of Political and Social Indicators, 3 d ed., vol. 1 (New Haven, Conn.: Yale University Press, 1983), table 3.6; and from Bureau of the Census, Statistical Abstract of the United States 1970 (Washington, D.C.: Government Printing Office, 1970), table 1254, p. 810. All per capita GNP are expressed in 1978 dollars. Note that a per capita GNP in 1978 of $9,770 in the United States translated into median family income of $17,640, or more than $30,000 in 1987 dollars.
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that is claimed to have high cross-cultural validity.2 National wealth is expressed as gross national product (GNP) per capita.
These are not data to go to court with—sample sizes for some countries are only 300 people—but the general correspondence with the curvilinear “predicted” relationship in figure 1 is obvious. Very quickly, more money buys little more happiness.
Some argue that the relationship between national wealth and happiness is even weaker than figure 2 indicates. Political scientist Richard Easterlin, who has done the most rigorous work in this area, reached the conclusion that the relationship is nil: “[R]icher countries are not typically happier than poorer ones. . . . By and large, the evidence indicates no relation—positive or negative—between happiness and national income. Whether the people in a particular time or place are comparatively happy is seemingly independent of the average level of income.”3 The Gallup data suggest that this may overstate the case slightly—examined closely, those data show signs that happiness scores continue to increase, albeit slightly and irregularly, with wealth even after subsistence is left behind. But such uncertainties only tend to reinforce the proposition that national wealth has at most only a very tenuous relationship to avowed happiness.
HAPPINESS AND INDIVIDUAL WEALTH
The predicted relationship of wealth to avowed happiness fails to match reality, however, when we turn to the happiness of individuals within
