GECON200-Topic #6: Happiness, Shortsightedness, and Trust

I would like you to consider the final chapter of Stiglitz’ Freefall book in the context of happiness, shortsightedness, and trust. Stiglitz asks the question “Are we creating an economy that is helping us achieve [the kind of society we would like to have]”. There is plenty of research and insight on happiness, shortsightedness, and trust with respect to the U.S. economy. I would like you to find some applicable research and use it in your comment.

You should not only think about how happiness might be measured, but what might be the problem with only looking at happiness. Can we attain a happier and healthier society, and how can we be sure we have done so? Or, should we simply focus on GDP and income since that is an easy and somewhat effective way of measuring economic activity?

You might also think about the incentives in our economy which have created a sense of individualism without responsibility. Stiglitz notes that there are many situations where success is attributed to the short-sighted aspirations of an individual, but failure is attributed to luck (think of his CEO examples). However, we might be able to avoid many of these failures if we were to give incentives that promote long-run planning. In order to plan for the long-run, we might have to sacrifice some of the instant gratification that typifies today’s culture, but it might be worth it to regain some sense of stability. I would also like you to think about some of the immediate and long-run consequences of switching to a long-run view on the economy. You might also consider discussing how punishment for irresponsible behavior could help or hurt changing to a long-run view of the world.

Finally, you might also consider discussing how the issue of community and trust can lead to a better (or worse) economy. How might the government provide the proper incentives to encourage a greater sense of community? You might think about trust and community with regard to banks, firm behavior, or whatever you choose. Think about any possible negative unintended consequences that might result if the government did promote a more trusting and community based economy.

Please try to think about all of these issues from several alternative perspectives. If you believe these are all great ideas, I want you to really consider how we should go about creating change and the consequences that might result from change. I also really want you to consider if these changes are possible in the United States.

16 thoughts on “GECON200-Topic #6: Happiness, Shortsightedness, and Trust”

  1. It is difficult to argue with the statement that happiness impacts a country’s economic well-being. Ruut Veenhoven, Professor of Sociology at Erasmus University Rotterdam and director of the World Database of Happiness, states that “happy people are healthier, more open, and more active… [which] impacts productivity as well as consumption patterns.” Happy countries also “attract good workers from other countries” (1).

    The Gross National Happiness Index takes the following aspects of a nation into account: psychological well being, ecology, health, education, culture, living standards, time use, community vitality, and good governance (2). This shows there are many components of than economic prosperity that contribute to a productive society. Yes, you can be productive without being content but for how long? All semester, we have assumed our economic decisions must be sustainable. With that being said, being unhappily productive is and must be viewed as unsustainable. Until we, as a society, accept the fact that the way we operate is not sustainable for our community life, use of time, environment, and consequently our health, little is likely to change.

    In the 1700s, Adam Smith had the notion that all decisions made in self-interest leads to the common good of society. Now, almost three centuries later, we have had that outdated theory dominate our economy and bite us in the …butt. In our society today, top executives of mega-firms will stop at no ends to make money, resulting in even more money going straight to their wallets. These financial “gods” (said due to their immense power) must be held accountable for their reckless and careless decisions. As Warren Buffett said in February, “If [the CEO] is incapable of handling that job, he should look for other employment” (3). How many industries can the boss make poor decisions, jeopardize the welfare and sometimes the existence of the company, and receive a bonus? Something needs to change with this fundamental disconnect.

    With the carelessness I described above, a crucial part of the banking system was damaged. The trust of the American public was violated. Is it any wonder that Americans or anyone from around the world would shy away from investing in the United States? They have no faith, and rightfully so, in American firms because of their executives’ selfishness and endless quest for wealth. In order to gain the trust back from potential investors they must prove that our world renowned financial auditing system that ensures honest banking practices is indeed doing its job.

    In short, the decisions made out with greed and self-interest before honesty and morals promote a very dangerous environment economically. The resulting lack of trust detracts from the overall happiness and any feeling of financial security is compromised. We must change the long-term plan of our national economy to be one that caters to all aspects of the GNH index, regains the trust of the public, and most importantly, values that trust with the importance it should actually hold.


    1. Isn’t the selfishness and endless quest for wealth the main reason people invest in American firms? Seems like a good chance for a return on investment.

      1. Yes people invest to make money. I don’t see a problem there. The issue that has come before us recently is going on this endless quest and putting morals and values on the back burner or completely disregarding them.

  2. As mass production blossomed during the early 20th century, the United States has been blessed, or cursed, with instant gratification. We are blessed because we rarely have to do without the basic necessities of life, but we are cursed because we have no sense of impermanence or foresight; “we’ll fix it later, lets focus on the here, the now” seems to be the underlying current of our nation. I do not believe this is a productive way to live because despite our affluence, we seem to a nation of overworked, overstressed, and overmedicated individuals. Rather than take the time to look for more sustainable alternatives, we as a nation are more likely to pickup the newest medication to “fix” ourselves, as noted by the marked increase in antidepressant use over the past several years (1).

    Needless to say, the focus on economic growth has not proved to be an effective measure of our happiness. As previously stated, “The Gross National Happiness Index takes the following aspects of a nation into account: psychological well being, ecology, health, education, culture, living standards, time use, community vitality, and good governance (2).” And when all of these factors are put together, we as a country rank far behind those with much lower GDPs such as Costa Rica, Bhutan, and The Bahamas; 23rd out of 178 nations ranked (3).

    Our system of thought states that as long as we are making money and getting new “things”, happiness will follow. I feel as though this statement is wrong on two fronts: what happiness is and how we go about achieving it. First of all, there is no long lasting sense of contentment in this model. We purchase a good and are initially happy but within a month there is usually a “better model” out and we have a sense of cognitive dissonance; what we own is no longer “the best” and as a culture we pride ourselves on having “the best”. So our initial happiness was not really what we thought, it was temporary satiation. Now we are forced to consume more in order to satisfy this new craving but just like that “last” cigarette, it never really does. We as Americans have more of everything than any other group of people in the world, I believe its time we graduated from diapers and became a bit more mature in what we think is truly important; not that extra half-inch on our TVs and not 10 more horsepower, but contentment and happiness with the opportunities we have been given.

    If we can trust that others are not out to ravenously consume until they explode, like the business in Freefall, we can build a more solid economy. Acting only in our own interest while ignoring those with whom we interact causes others to do the same in “monkey-see-monkey-do” fashion. If we as a nation, however, look forward to where we are traveling rather than complaining about the shoes we wear on our feet for the journey, we can see that we are not traveling alone. Life is one big line, we are all standing in it for a reason; and if we think that we are so much more important than the others waiting as we are, that we have permission to cut ahead, we are not only ignorant, but also destined to fail each other in the future. So to those who may complain that they do not have the latest computer model or clothing line and demand gratification, get over it. You, and the rest of us will be happier in the long run. To paraphrase a monk of a religious tradition I cannot remember, “Oh what a joy it is to live in poverty, to live with nothing, for we have nothing whatsoever to lose.”


  3. It’s difficult to even argue that Americans are a happy nation. While we are internationally acknowledged, begrudgingly or not, as being one of the wealthiest countries in the world, our use for that wealth doesn’t make us “happy.” More than one in four households “making more than $100,000 a year say they cannot afford to buy everything they really need” (1). With such a materialistic society, it’s understandable for us to place economic prosperity on a pedestal. However, this isn’t a failsafe system; there isn’t a point at which people become satisfied, become happy. Instead, we are drawn into an ever-deepening pit of materialistic desire.

    If the people of the United States truly wish to become a happy nation, they need to destroy the American culture. While radical, this is absolutely necessary, for today’s society is devoted to materialism. When one watches a 30-minute program on television, a full eight minutes are devoted to commercial advertising, a none-too subtle “BUY MY PRODUCT!” from every industry in existence. But how can we break this cycle of materialistic devotion? Helena Norgberg-Hodge, the director of the International Society for Ecology and Culture, believes that the first steps towards economic happiness lie in localization. A business has one focus – profit. Those that have maximized this are evident in Apple, Nike, Coca-Cola and other massive global firms. If instead corporations had a vested interest in their local communities, Norgberg-Hodge believes that it would begin to create an economy of happiness. “…the profits of the giants would decrease, whereas the profits of millions of local businesses would increase. And this is the way of reducing the gap between the rich and the poor while reducing global warming” (2).

    So instead of the constant buying and selling of products that are almost always unnecessary luxuries, what society needs to embrace is a long-term sense of commitment. To begin with, the environment must be made a priority; the preservation of the Earth is a solid step towards happiness, because quite frankly, being sick tends to suck. The culture must then simply attempt to become less materialistic. One method of not focusing on possessions is to instead spend money on experiences. “…we become accustomed to objects…but remembering activities can give us pleasure indefinitely” (3).


  4. There are currently many flaws in our economic system. We have fashioned a hedonistic society in which materialism dictates moral commitment, and the rapid growth achieved is neither environmentally nor socially sustainable. According to Joseph E. Stiglitz, an Economic Sciences Nobel Memorial Prize laureate, while the socio-economic elite have been doing well for the past three decades, the adjusted incomes of middle class Americans have stagnated or fallen (1). Standards of living are going to have to fall if we continue to consume as though our incomes are rising. It is safe to say that most people want what Joseph Stiglitz wants— a socially just and economically sustainable world in which people are holistically happy. In order to generate a new financial system in which meaningful jobs will be created and decent work will be available for all of those who want it, we need to focus on long-term goals and shift away from our hedonic nature and longing for short-term appeasement.

    Economists refer to it as the hedonic treadmill: The way many Americans work constantly and live in an arms race for status conspires against the happiness they say they crave. We’re the most affluent and influential country in the world. However, an increasing amount of hard data shows that as our ability to own homes, cars, and other luxuries has increased, so have our rates of addiction, depression, and economic disparity (2). This just shows that notwithstanding the fact that external forces are constantly changing our life goals, happiness for most people is at a relatively constant state.

    Although getting rid of a lot of the short-term impulses we have would be a challenge, it is a crucial step towards our economy’s progression. This is why: Without long-term planning, the too-big-to-fail banks will be able to continue much as before, over-the-counter derivatives that cost taxpayers so much will continue almost unabated, and finance executives will continue to receive oversized bonuses (3). Without fundamental changes in economic policy and regulation, the position of the US in the world political and economic arenas may deteriorate significantly. The utilization of long-term planning will lead to a new society in which each individual is able to fulfill his or her ambitions and live up to his or her potential.





  5. The top 1% of households in America controls 40% of the nation’s wealth. The poverty line in the United States falls well below what experts say is the actual cost of minimally adequate housing, health care, food, and other necessities — On average, households need more than double the official poverty threshold to meet basic needs. Here in our beloved USA, a woman who has the same exact qualifications of a man will earn on average only 76 cents for each dollar that same man earns. About a third of all murdered women in America are killed by husbands, boyfriends, and ex-partners, and less than a tenth are killed by strangers. Finally, did you know that the US has no equal rights amendment (1)? It is no wonder that Americans are so unhappy.

    Bouncing off of what Taylor said, shouldn’t all of this poverty make Americans happier? I mean, what do all of these poor people have to lose? To answer this question, we need to take a step back and examine all of the issues that prevent us from being happier. Sociologist Emile Durkheim did a lot of research concerning suicide. Durkheim explained that the reason people who are poorer tend to be happier than those more economically well-endowed is that they can’t aim as high – their sights are set on making it from one day to the next. With no plate of filet mignon being set before them at every meal and no shiny new sports car (or two, or three) in their garage (if they have a garage), their dreams are limited. Those who have more money have access to what they desire and need, so their dreams are constantly escalated until they wish for something that is unattainable and, thus, unhappiness (2).

    At this point, you’re most likely thinking, “Well, Carolyn, how do we solve this mass epidemic of unhappiness caused by wealth?” That, my dearies, is a relatively easy question to answer, but I suggest that you take a seat (not only because the answer is shocking, but also because if you’re reading this and not sitting down, you use computers in an odd fashion). America needs some revisions. We need to rethink what is important to us as a society – as a culture. What America needs now in order to be happy is America 2.0. How might we do this? Redistribution of wealth through things such as taxes and charitable donations can take money from those who have an awful lot and place it in the hands of those who need it. Yes, I suppose I am proposing a sort of Robin Hood effect, which is better than a Marxist approach which would be to just take an axe to capitalism altogether.

    However, I feel that we cannot stop at the economics in order to increase happiness. Sociologist Marilyn Frye explains that oppression occurs in the form of cages, and all of us have multiple cages: being freed from the cage of poverty does not free one from the cage of racism or sexism (3). All of these issues are merely individual legs that hold up oppression (which is unhappiness). To upend oppression, we need to take out all of the legs of oppression just like how the Rebel Alliance toppled the Imperial AT-AT walkers in Star Wars Episode V: The Empire Strikes Back!

    …Yeah. There’s really much, much more to be said on this topic, and not all of it can be said in one nice (ie. easy to read) blog post.

    (2) Lemert, Charles (ed). 2004. Social theory: The multicultural and classic readings (4rd edition). Boulder, CO: Westview Press
    (3) Frye, Marilyn. 1983. The politics of reality: Essays in feminist theory. Freedom, CA: The Crossing Press

  6. First of all, I think it is naïve to view happiness of a nation in a macro sense. Each individual has his/her own personal definition of happiness and how to achieve it. For some it is wealth and status, and for others it could be religion, fighting for a noble cause, having a family, etc. Not everyone conforms to the materialism that America is so often characterized by.

    That being said, in our free market economy, monetary/economic incentives are what drive innovation. No one can deny that the technological advances made possible by our free market economy have given us the ability to work more efficiently, live longer, and know more about the world than ever before.

    Dr. Neveu says in his prompt, “I would also like you to think about some of the immediate and long-run consequences of switching to a long-run view on the economy.” If firms are smart, they are already based on a “long-run view”. In the case of the investment banks that failed in the recent financial meltdown, the possible astronomical short-term gains led them astray from the true path of success, which is long-term growth. They made risky investments and failed because of them.

    What it all comes down to is personal responsibility. Firms/leaders need to take responsibility for their own actions even in the bad times. The federal bailouts and CEO golden parachutes have eroded this kind of expected integrity. It will take quite awhile for banks to regain the public’s trust, but one way to do so is for banks to emphasize long-term wealth building through legitimate means, not scams that force clients into bankruptcy because they were tricked (1). If banks want our trust back, they need to make sure their client’s best interests are in mind, so that both the firms and clients can be successful in the long-term.


  7. When looking back on my microeconomics class last semester, I realized I never quite understood the section where we learned about measuring utility, or in other words, a measurement of satisfaction. (1) When trying to grasp the concept, I thought of it as unfeasible. If you can measure something, then you should be able to break it down into smaller units, like how yards can be broken down into feet and how meters can be broken down into centimeters. So can happiness be broken down into smaller units? I don’t think so (although calling it “centihappiness” and “kilohappiness” would be quite comical.) Also, would happiness require different scales in different areas of the world, like the metric and English system? Some countries value materialistic items over others, so would each country have a different scale?

    If this was the case, then it would be almost impossible to compare Country A’s level of happiness with Country B’s. But the World Database of Happiness has tried to accomplish this feat. They surveyed 148 nations, and ranked their happiness level on a scale of 1 to 10. Coming in first was Costa Rica with an 8.5, followed closely behind by Denmark with an 8.3. (2) A good friend of mine lives in Denmark. When I informed her that her country was the 2nd happiest country in the world, she just laughed, as did her friends and family. They all wanted to know what kind of a “scale” this survey was using.

    This is why I believe when it comes to measuring economic activity, we should only focus on GDP and income. An individual can easily rate and measure their own happiness, but when it comes to an entire nation, I feel the components used for measurement are too broad to be able to give an entire country a single rating.


  8. They key is not to measure happiness but to measure preference satisfaction. We need to figure out if the needs that people personally deem most important to themselves are being met. Everybody has a different definition of happiness. One person’s happiness may contribute to increased individualism and environmental degradation while another’s may lead to activities that create a greater sense of community and allow for sustainable economic growth. Some refer to this as the measurement-theoretic argument (1). And so there is no way that the government can make us happier. However, like Tim Kasser, a psychology professor at Knox College, says, the government can take away institutions that prevent people from pursuing their own idea of happiness. (2) Marketers make our society so materialistic and make us think that the only way to be happy is buy what they’re selling. Various workplaces create such rigid and inflexible hours that it becomes impossible for people to spend time with their families. Perhaps if the government focuses on eliminating some of these stress-causing factors we can truly have a society that thinks about the long-run and is less worried about finding ways to only help the individual. The government is so focused on creating inventive ways to measure happiness and progress that it fails to realize the importance of getting rid of the things that make our county unsustainable and selfish.



  9. As the Declaration of Independence states, Americans have the God-given rights to “life, liberty, and the pursuit of happiness.” (1).The right to “Life” is hopefully a given, and as it may be debated in arguments over abortion, or the death sentence, for the most part, Americans value and accept the right to life. Liberty comes with the rights of free speech, free religion, and equality. This leaves Happiness. This word is much harder to define then the previous two. Is happiness making a lot of money? Is it having a stable job? Is it education levels, or crime rates? As one can see, the standard of “well-being” is hard to pinpoint, yet we are entitled to it, so there must be some way to acknowledge and measure it, or else it does not exist. I believe that our country should not focus solely on GDP for this measurement, because the flaws of the index out-weigh the benefits.

    We are experiencing a digital society; there is no doubt about that. As the internet becomes more and more popular, and technological advancements continue to increase, I believe that we should rethink our previous GDP calculator and switch to a more logical evaluation for our generation. Gross National Happiness (GNH) indicator measures the quality of life or social progress in more holistic and psychological terms than GDP (2). There is an application on Facebook that actually measures this by evaluating people’s statuses. GNH is composed of positivity and negativity. It is the difference between the two that determines the level of happiness for a given day (3). Now this may seem irrational, but if you think about it, instead of measuring the amount of goods and services produced, GNH measures people’s feelings in relation to what is going on in the economy.

    The GNH concept proposed in 2006 by Med Jones, the President of International Institute of Management, focuses on being an index for seven of the total average per capita measures:

    1. Economic Wellness: debt, income, inflation
    2. Environmental Wellness: pollution, traffic
    3. Physical Wellness: personal health, illnesses
    4. Mental Wellness: mental health, prescribed medications
    5. Workplace Wellness: complaints, lawsuits, employment
    6. Social Wellness: discrimination, divorce rates, crime rates
    7. Political Wellness: individual freedom, foreign conflicts (2).

    As you can see, a measure like this can easily cover most of the areas that our GDP indicator overlooks. Obviously, like any index though, GNH may be hard to measure accurately. Perhaps a survey could be done monthly, or annually, to record citizen’s “happiness levels”. Although this may be costly, I do believe that it would be beneficial in the long run. Who knows, maybe we can just start living by the rules of Facebook, and simply measure our economic quality off of the positivity or negativity of our status for the day. This may seem like a crazy idea, but sadly enough, for some of us Facebook is our lives, so maybe this is the best way to go.


  10. I think in the long run economic prosperity affects happiness. Humans naturally compare themselves to others and material goods are an easy yardstick to use. One cannot be happy if they have less than others because this leads to feelings of inadequacy. In a study by Cambridge University it said the most important factor for one’s happiness is the prosperity of one’s ‘significant others’. (1) This makes sense. Happiness is contagious. The mood of others around greatly affects your mood. So the economic prosperity of those close to you affects your mood. Hence, economic prosperity leads to happiness. I do believe though if there is such a focus on equating economic success to happiness this could become an issue. Not everyone can be the wealthiest in a society and with the media constantly showing how the ‘other half’ lives, this makes some people painfully aware of what they do not have. This could lead to a lowered mood and greater instances of depression.
    I think we can attain a happier and healthier society without focusing on gdp. Some of the most cost effective methods of manufacturing drain resources, and damage the environment. Contaminated water and unclean air do not lead to healthier people and in many studies are blamed for many illnesses. (2) GDP is important because it gives us power internationally (strong military) but for society to become happier positive character traits such as honesty and integrity should be emphasized because those are things people can control. One cannot necessarily control economic prosperity. In sum I believe that although gdp is a good indicator of access to basic quality of life measures such as health care and education but it is not a good indicator of happiness and to improve happiness character traits should be emphasized rather that economic success.


  11. Certain things are mutually exclusive. The idea that everyone in America can always have everything all the time is ridiculous and insane. That same idea applies to economic theory. If the main goal of an economy is to achieve an emotional highpoint, then the true goals of growth and sustainability are thrown by the wayside. Happiness and trust are both good things to have, to be sure. But if trust is legislated, is it really trust? If happiness is artificially created through wealth distribution, is it really happiness? In short, when measuring economic performance, happiness shouldn’t have anything to do with it. This is not to say that happiness and economic success cannot be reached at the same time. But, when someone refers to economic performance, happiness should not be included in that. There are obvious limitations to measuring a concept as vague as happiness. If we agree to include happiness in measurements of the economy, whose definition do we use?

    Our perception of reality is the only thing holding us back from true happiness. We are the richest nation in the world, and yet many continually look at their economic conditions with despondency. Instead of looking to the economic structure of the United States as the sole culprit for our happiness woes (pun intended), we should look to the education system. Classes in “positive psychology” emphasize the effects of changing the way students think about life, and how that will make them happier (1). Some basic tips taught at Harvard’s positive psychology 450 class are “keep it simple, allow yourself to be human, and look at failure as a learning experience.” Aside from higher learning, if children are taught these techniques at a very young age the effects will be lasting.


  12. Someone has to fail in a capitalist economy. Capitalism introduced by Adam Smith, which Matt mentioned, Smith believed that “ [people] were self serving by nature but that as long as every individual were to seek the fulfillment of her/his own self interest, the material needs of the whole society would be met.” Competition is a major aspect of capitalism, so I feel as a society we are not achieving the economy we should strive for because someone is always losing.

    I feel as a whole society we are putting so much focus on constantly spending and buying. When you have money to spend, most people believe you will be happier, and those that have less money will be less happy. But you know that famous line “you can’t buy love” well I feel that “you can’t buy happiness” either. So if you can’t buy happiness and according to Les Picker the term happiness is extremely ambiguous (1) then measuring happiness is not the way to go in order to see if an economy is successful. So what is?

    Stiglitz says, “average GDP per capita can be going up even when most individuals in our society not only feel that they are worse off, but actually are worse off” (2). I believe GDP is not the most accurate measure of the society we would like to have but since not everyone can succeed, some people have to fail or lose something. I feel to improve the accuracy of GDP a solution may be to focus on spending just on basic needs, and not try to just boost our GDP number on spending whenever we can.

    (2) Joseph E. Stiglitz. “Freefall” Chapter 10.

  13. What does happiness mean to the average US citizen? I feel fairly confident in saying that the “average Joe’s” response to this question would simply put, be money. Money is what runs our society and is the driving force in our economy. Without money then, it would seem our economy would crumble. This is all the more evidenced from the economist’s view, by their long-lived method of measuring the economy’s success: the GDP. However, a new movement has started that seeks to measure GNH (Gross National Happiness) over GDP, with a goal of returning to the Founding Father’s original “rich” sense of the word happiness. John Ralston Saul defines this as a “balance of individual and community interests.” (1) So, the question then is, is this a good measure, and is happiness really that important?

    According to a British study, 81% of people claim that a government’s primary responsibility should be the “greatest happiness” of the population rather than the “greatest wealth.” (2) Further studies reveal that those with vast amounts of money really don’t become “happier” with more money…and on a macro-level, once economies reach a certain threshold of GDP, further growth does not equate to happiness. (2) This research then would seem to suggest that GDP, or “money”, is not the answer to everyone’s problems. Simply focusing on “growing” the economy doesn’t seem to equate to increased happiness. So in answer to the question, “should the US solely focus on our GDP?” the answer seems to be “no”…instead there must be some alternative factor that affects happiness; but what?

    According to Dr. Ronald Inglehart, “Some types of societies clearly do a much better job of enhancing their people’s sense of happiness and well-being than other ones even apart from the somewhat obvious fact that it’s better to be rich than to be poor.” (1) What is the key? Researchers at both Harvard and Princeton have found that at least part of the key may lie in how wealth is perceived. One study found that 50% of people would rather be wealthier than their neighbors than have twice as much money but be poorer than the general population. Acknowledging this fact, Britain has begun “taking into account not only income but mental illness, civility, access to parks and crime rates.” (1)

    The key to measuring the success of our economy thus seems to lie more in just GDP, but also in this “index of well-being”. Rather than simply focusing on how productive and wealthy our economy is, it seems necessary to also consider the general happiness of the population. How do we then increase this GNR? An exact method has yet to be developed (if it even possible to create an exact equation), but one thing is clear: societies that focus on “assessing community health, living standards and people’s division of time among work, family, voluntarism and other activities” seem to be happier overall.


  14. Many different situations and circumstances stimulate happiness as well as unhappiness. From an economic standpoint, I believe the source of unhappiness in our country is social comparison, or evaluating one’s own income against that of others (1). Social comparison breeds jealousy which leads to greed and dissatisfaction with what one has. If we are blinded by dissatisfaction and greed, there is no way we can be genuinely happy.
    Two summers ago I traveled to El Salvador on a mission trip and spent a week with some of the poorest yet happiest people that I have ever met. We spent the week in a tiny village called Las Delicias, isolated from the main city of San Salvador and the competition of prices and wages that come with city-business. The people of this village only received running water several times a week and wore the mismatched clothes that previous volunteers had given to them as used hand-me-downs. So what do they have to be happy about? Not much, but they also don’t have the issue of social comparison in their small isolated community to make them unhappy. In the absence of social comparison and without the distractions of material goods, it is much easier to find happiness in the simplicity of life. In this atmosphere, community flourishes.
    In the United States our poor are not poor compared with poverty standards of places such as El Salvador. In March I helped out for a week at the Harrisonburg and Rockingham Thermal Shelter which offers a place of last resort for the homeless people of the region. If these were some of the worst off people in the area, their situations didn’t seem too terrible considering many came to the shelter with cell phones, some with laptops and almost all apparently had enough money to satisfy their cigarette craving.
    Since the core group of these people spends basically every night together in the shelter, a type of community was present but instead of one of trust and happiness as in Las Delicias, this community was defined by the underlying presence of hostility derived from greed and ultimately social comparison. Several times I witnessed fights erupting over trivial matters such as misplaced phones assumed stolen. This is the result of placing such high importance on material goods. It is proven that there is a strong correlation between income level and happiness which was definitely evident in the homeless shelter but did not seem to hold true with my friends in El Salvador (1).
    The solution to the disparity between the happiness of the rich and poor is reducing the wage gap. If America can achieve greater equality as a national community, we would also achieve higher levels of happiness because there would be less social comparison making us greedy and unsatisfied. Reducing the wage gap is not easy but overall increases in our national productivity are one way to increase real wages in the long run. Another way is to decrease our reliance on imports and increase support of domestic goods, specifically those produced by unskilled work. Another solution could be to increase taxes on the wealthy and cut taxes on the poor to force a balance of wealth.
    Whatever the plan of action may be, it must lead to increased economic equality because this is one sure way to improve happiness among United States citizens.


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