In 1974, Richard Easterlin published research that would have made Buddha smile. In a famous paper that asked “Does Economic Growth Improve the Human Lot?”, the economist presented data that gave rise to what is known as the “Easterlin paradox”. For as the term suggests, his results seemed contradictory. In any country, at any point in time, richer people are on average happier than poorer people. However, Easterlin also discovered that as countries and people become richer their levels of reported happiness do not show any signs of increasing. Hence the paradox.
Such a conundrum would not have come as a surprise to some ancient thinkers. Most religions have some ascetic element. Buddha was no fan of material wants. In the Bible, Jesus and John the Baptist warn of the futility of seeking riches. Greeks such as Pythagoras and the Orphists were believed to have eschewed materialism. But in 1974, Easterlin’s findings challenged the consensus that there was a clear relationship between earning more and feeling happier. The economist gave a modern twist to a debate that is probably older than money itself.
Easterlin, in a paper released in 2010, suggests that his contradictory findings are explained by “the escalation of material aspirations with economic growth, reflecting the impact of social comparison and hedonic adaptation”. Put simply, he argues that human happiness is based on how we compare ourselves with those around us. We also quickly adapt to whatever level of richness we acquire, Easterlin argues. Put even more simply, humans always want more. We are never really satisfied.