What makes you happy?
This is probably my final blog post…
What is happiness? I don’t think anyone can pinpoint the definition of this word because there are so many ways to be happy. One thing for sure, happiness is not proportional to the amount of wealth in one’s possession. In fact, we can be happy from very simple things that are given to us. For me, happiness comes from the ability to appreciate what you have. Coming from this perspective, being well-off sometimes just doesn’t do the good. Well, this is the case with me at least.
When I first came to Ukraine, my family didn’t have much money. We were living in a very small two-room flat. My dad was finishing his PhD thesis, so we had to live off the money he had earned before that. It was difficult, but during the first summer my dad would still drive the whole family to the local McDonalds to buy the cheapest ice-cream they had on offer: vanilla cone that back then cost around 20p. My sister and I would have one ice-cream each because that was all my parents could afford. Looking back, those were the happiest days in my life. Now my family is in a much better position; my parents can afford to send me to England to study and I have Häagen-Dazs instead, but all these are not necessarily as valuable as the vanilla cones I had when I was nine. I definitely appreciated everything I had more back then.
Luckily, we can use economics to explain the phenomenon of happiness.
Economics is largely based on the theory of utility. The more goods we consume, the more utility we derive. Pretty simple I guess. However, is happiness equal to the amount of utility we can get? Many people would say so, but if happiness is all about appreciating, then this is not true. Instead, happiness must be the marginal utility you can derive from consuming an extra unit of good. And the truth is most people in our world have diminishing marginal utilities. If I couldn’t afford a vanilla cone, and you gave me one, I would be over the moon. At that very moment, nothing in the world can make me happier. However, if I could buy plenty of them, and you gave me one more, it would mean nothing to me.
The more we possess the less appreciative and happy we become from gaining extra. Simple economics tells us that consumerism and wealth will eventually eliminate happiness from the world. This may explain why poor working people in countries like Nepal and Vietnam look content and happy with their lives. Sure, there are many things that can be improved and done, but those people are much happier because they can appreciate every little thing they get – the things that people in the Western world now take for granted. Unfortunately, there is no going back on this. We can only try our best to find the rare simple moments of true happiness.
Happiness is difficult to understand. One will need to go through all the ups and downs of life in order to gain just a vague idea. It is no good being in your comfort seat and thinking that you know what makes people happy. I guess it is a bit naive and idealistic. Really, go and experience the world through your eyes and see for yourself what makes you and other people happy. For me, nothing can make me happier than being loved and surrounded by friends and family, even if that means I will not be able to buy the latest iPhone that’s coming out.
October 11th, 2011 at 11:59 am
I agree with your last sentence – “For me, nothing can make me happier than being loved and surrounded by friends and family”.
But your earlier argument suggests that the more time you spend with family and friends the less you will appreciate them and the less this interaction will make you happy?
I hope this isn’t true for you and I don’t think it will be. I think happiness is a choice that people make rather than a function of economics. I believe that is why people in countries like Nepal and Vietnam look content and happy with their lives.
November 14th, 2011 at 11:22 pm
The reason that people in Nepal are content is because they have adapted their aspirations downwards to ‘realistic’ values to be satisfied with what they have, and although this is an admirable quality, it does not mean that increased wealth would not make them happier. I think the point you miss is that wealth in itself will not make anyone happy but it is its instrumental power which will, such as improving life expectancy, education and so on in places such as Nepal or Vietnam, because I am pretty sure if i was a poor child working in a Vietnamese sweatshop that I wouldn’t think twice about increasing wealth would bring about the end of happiness, despite it being “simply economics” (not quite sure where in economics it says that?).
If your parents, now richer, can afford Haagen-Dazs, this means that -in economics jargon- the income effect has caused them to move to a higher indifference curve, thus deriving more utility- so by definition he is happier.
You almost seem to draw a causation from the correlation of you being poorer and having the happiest memories, yet I’m sure your parents would’ve been happier if they weren’t under such financial pressure.
And yes, happiness is equal to the total amount of utility because that is the definition of utility; and marginal utility is the same as marginal happiness. What you really mean to say is that becoming increasingly richer does not lead to a proportional increase in utility, but suffers from diminishing marginal returns.
Sorry for a rant, but felt the economics mistakes should be corrected for such a site x
January 17th, 2012 at 8:29 am
This is quite good from one side. Now try to investigate,in the Economist’s view, the meaning of happiness of an African Politician.
January 23rd, 2012 at 3:57 pm
I think its very hard to be completely happy in the west as we all have such high expectations from the start that we are brainwashed by the media that we need to buy so many things and look and behave a certain way to be happy. Unfortunately we are mostly too busy working all the hours we can to buy more and more stuff that we often lose sight of the important things such as spending time with family or giving ourselves enough time.
October 11th, 2014 at 1:29 pm
For me it is almost impossible to try and explain a persons personal feelings with structured economic principles. Human emotions are extremely subjective and each person will have uniquely different reasons as to what makes them happy. I just feel that no conclusion can be drawn as to what makes the human race as a whole happy. Each individual will have a different answer due to different physical, social and economic environments that surrounds them.
Economics does however allow us to generalise and simplify the complex world of happiness and utility.
October 12th, 2014 at 10:24 am
This blog was very enlightening, it helped me in understanding the rationale behind Marginal utility when applied to real-world examples.
October 12th, 2014 at 3:05 pm
we live in a society where happiness is our ultimate priority, everyone wants to be happy in life but happiness does not come from materialistic things. utility according to the economists is the satisfaction that a person obtains from consuming a product or a service. having much of everything may lead you to dissatisfaction because us people enjoy things that we rarely can get hold of so too much of everything can prove to lead to not wanting the product or service anymore.being happy is a choice not a matter of being wealthy or to do with what you have accumulated, people who have a little appreciate what they have and seem to be more happy.
October 14th, 2014 at 12:23 am
I disagree with what has been said about more utility being derived as we consume more goods. Utility is not necessarily based on the number of goods that one obtains. Utility depends on the satisfaction that one gets from deriving a specific item. This is why the law of diminishing marginal utility exists. This principle states that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.
October 14th, 2014 at 4:22 pm
I also believe that being appreciative of what you have is an irreplaceable and priceless quality which every person should strive for. I, however, disagree that we appreciate less, the more we gain.
Money is not eveything, but everything that’s important needs money. For the majority, we all have dreams we would like to achieve some day, but our financial means restrict us from chasing our dreams; we shrink our dreams to fit the size of our income and that is why many people would rather be content in settling for what they have. They have no choice but to apprecieate what they have.
In the end, we all want more whether you’re well off or not. For those who are well off, a simple sense of personal fulfilment is what would scratch their backs because money was never a problem. For those who are not so fortunate, that sense of personal fulfilment would be embodied in an increase in wealth, regardless of how that would be acquired.
October 15th, 2014 at 1:32 pm
I disagree with what has been said about more utility being derived as we consume more goods. Utility is not necessarily based on the number of goods that one obtains. Utility depends on the satisfaction that one gets from deriving a specific item. This is why the law of diminishing marginal utility exists. This theory states that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.
October 15th, 2014 at 1:39 pm
Too many people are missing the point. Hapiness is not about how much money you have. Its about how much you value the money that you have.