Jane Doe is a 22 year old graduate from New York University, one of the nation’s most expensive private colleges at nearly $55,000 per year. Only one short year after graduating Jane is knee deep in debt; with $60,000 in student loans and no job, Jane must make some of the most crucial financial decisions of her life. Although Jane may be a hypothetical student, she represents the predicament many recent college graduates are facing. But the hefty college price tag and the long distances from home have not deterred many students from setting their sights on beautiful, sprawling campuses like that of New York University. Why, one might inquire, would a student risk incurring so much debt for a college degree? What is so great about college that millions of students are willing to spend decades paying for it? It is simple. In this day and age, students are willing to do nearly anything to be best prepared to enter the workforce, especially with the high levels of unemployment we have seen as of late. We, as Americans, are trained to believe that life is a competition, and whoever makes the most money wins. And then what? Will this create some newfound sense of happiness or self-wroth? Is the inevitable debt and possible threat of unemployment worth the time? Decisions regarding college, as with most choices made today, revolve around two things: money and happiness.
To better understand the reasoning and justification behind spending such exorbitant amounts of money on college, we seek to uncover the relationship between happiness and money. The existential issue of life, the motive behind most actions, and the reason for life itself is the never ending search for human happiness. What is it? How do we find it? How do we maintain it? But more importantly in today’s society, how does it relate to money and wealth? However, simply defining happiness, an obscure concept at best, is nearly as difficult as achieving it. Ask any source what happiness is, and you will hear an entirely unique answer:
“Happiness is thought of as the good life, freedom from suffering, flourishing, well-being, joy, prosperity, and pleasure.” – PBS
“ Hapinesss to us is anything that can bring a smile to someone’s face.” – Coca-Cola
“Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it.” – Groucho Marx
“Happiness is something final and self-sufficing, and is the end of all that man does.” – Aristotle
To define the concept of happiness, we first look to the works of Aristotle, a Greek philosopher whose teachings have been highly regarded for centuries. Aristotle defines happiness in relation to wealth and politics in his works the Nichomachean Ethics and the Politics.
According to Aristotle’s assessment of happiness, happiness is not simply a fleeting emotion or a feeling, but rather something to be achieved and the end goal of life. Although “men agree that the good is happiness, [they] differ as to what this is.” It is universally accepted that happiness is the overall goal and end of human life; however, this is where the agreement stops, for the definition of this happiness differs from one person to another. In an attempt to put an end to this debate and define happiness for what it truly is, Aristotle describes human happiness in terms of mental faculties and wealth.
Wealth is vital to ones happiness because a human’s wants are virtually unlimited. Think about it: we obtain one material item and we want more and more. The original iPhone was amazingly innovative when it came out, but walking around with the thick, rounded, and outdated design is nearly unheard of two generations later. An old iPhone is looked down upon and simply just not enough for many people today, who are constantly bombarded with new technology and the latest updates. As humans, we are never truly satisfied with just a little bit, we always want more. Even disregarding the excessive and widespread materialism we see in society today, at least some amount of material goods is absolutely necessary to live a comfortable life. It is difficult, if not impossible, to be truly happy if there is no roof over your head come the winter or no food in your stomach at dinnertime. Therefore, according to Aristotle’s teachings, at least some basis of wealth is necessary for true happiness. Furthermore, because “happiness is an exercise of the vital faculties in accordance with perfect virtue or excellence,” it is imperative to understand what virtue is in order to further define the concept of happiness. Virtue, according to Aristotle’s teachings, is a trained faculty and a habit of choosing the mean, or average. This means that man must train himself to choose something neither to excessive nor too meager, but rather in a relative amount to his own, individual needs. Though happiness is relative to one’s own needs, it encompasses so much more than just the individual. Both the goal of the individual life and the goal of state are happiness and self-sufficiency. “The end of the state is the good life, and… the state is the union of families and villages in a perfect and self-sufficing life, by which we mean a happy and honorable life.”
With a better understanding of happiness, we can now apply this definition to modern day society, where money is the chief factor in decisions and economic risk taking. Many believe that money leads to happiness, which Aristotle would confirm to a certain degree, yet there are many who counter that money is not the cause of happiness but the cause of greed, depression, and corruption. On the other hand, some argue that happiness leads to more money and that those who are happy tend to perform their jobs better and earn higher wages, which therefore leads to further happiness. So, if money leads to happiness, and happiness leads to money, then it can be hard to know where to begin and where to find the truth.
What is the link between how much money one earns and how happy they are? Contrary to popular belief, money and happiness are not one in the same. A paper published by Richard Easterlin in the 1970s suggests that the relationship between income and well-being is nowhere to be found. For example, just because a nation as a whole is wealthier than another does not mean that the wealthier nation has a higher level of well-being for its citizens. That being said, relative income does, to some extent, dictate one’s level of well-being. If, in this theoretical nation, the average income is $30,000, any given citizen will be generally more satisfied with an income of $50,000, again confirming Aristotle’s argument that some wealth is necessary for happiness. A more recent study by economists Justin Wolfers and Betsy Stevenson, professors at University of Michigan, reveals that Easterlin’s claims may no longer be valid in the 21st century. Today’s nations with higher incomes, such as the United States, have a generally higher standard of living and satisfaction; however, that does not mean that an abundance of material goods and wealth directly correlates with happiness. While these nations do have more satisfied citizens, they do not necessarily have happier citizens, especially in an Aristotelian sense of the word.
So, to a certain degree, earning money can create happiness and satisfaction. At the same time, the opposite is also true: those who are happier earn more. Though money does not necessarily equate to happiness, those who are happy tend to earn higher wages. A study done by University College London and London School of Economics revealed that those who are genuinely happy tend to earn 10% more by age 29 than those who are unhappy. The study, which was published by the National Academy of Sciences, followed 15,000 participants for nearly 14 years, and the results further supported the notion that happier people earn more money. Those participants with a more satisfying childhood tended to earn significantly higher salaries as adults. Happier children were proven to have “positive, outgoing attitudes and… [a] greater likelihood of getting hired, promoted and earning a higher degree.” So what does this mean for us?
These studies reveal the vicious cycle of happiness and wealth: those who set out to earn money become unhappy, earn less money, and become yet unhappier. On the contrary, those who set out to be happy earn more money, become happier, and earn even more money. If one embarks upon life with the sole purpose of attaining material wealth, they will not achieve the end goal of happiness. However, if one enters life with the goal of being happy and exercising virtues, they will, along the way, gain both wealth and happiness. It is imperative that we do not get caught up in the money-centric society we live in today. If we focus on our virtues and mental faculties as individuals, we will achieve the end happiness while gaining higher salaries along the way. Through the investigation of this never-ending cycle of wealth and happiness, we can conclude that money is not the cause of happiness; happiness is the cause of money.
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