Running head: MONEY, HAPPINESS, AND MOTIVATION
Money, Happiness, and the Importance of Motivation
Emily DeCoster
Abstract
The link between money and happiness can be explained by an individuals motivation and goals. In this paper, happiness is measured by social indicators and reports of subjective well-being, and the importance of each is examined across various cultures. Motivation and goals are discussed in light of self-determination theory and Maslows hierarchy of needs. Another source of the link is given in the discussion of discrepancy theories. The implications of these various explanations are then applied to job satisfaction and the capitalism/communism spectrum. Finally, suggestions are given on how to use motivation to make everyone happier.
Contents
Introduction . ... .4
What is happiness? . .. . ..4
Importance to the world today . ... 5
Social Indicators and Subjective Well-Being ... ..5
Social indicators ..6
Subjective well-being ..9
Synthesis ... 12
Income . ..14
Its importance 14
Why more is less ...14
Why the link? 15
Cultural differences ... 16
Motivation and Goals 18
Self-determination theory .18
Maslows hierarchy of needs 21
Discrepancy theories .24
Implications and Applications ..29
Job satisfaction ..29
Socialism/communism vs. consumerism/capitalism 31
Make everyone happy? .33
Conclusion 34
Introduction
Happiness can be a rather slippery term. Everyone knows what it is, and whether it applies to him or her, but trying to determine a universal definition can be difficult. Even finding universal examples can be hard. Does spending time with loved ones bring happiness? Yes, sometimes, but it is possible to have too much of a good thing. What about being an extrovert? Studies have shown that possessing this trait makes one happier, but introverts may disagree (Costa and McCrae, 1980; Diener, Sandvik, Pavot, and Fujita, 1992; Emmons and Diener, 1986). How long must the feeling last, and how intense must it be? All of these are questions are relevant to the study of happiness.
The definition that will be used for the purposes of this study is based on the one proposed by Chekola (1975). He says that happiness is (1) the realizing of a life plan along with (2) the absence of both serious felt dissatisfaction and an attitude of being displeased with or disliking ones life and (3) a disposition to experience favorable feelings and attitudes associated with the realizing of ones life plan (213). As he points out, there are many advantages to looking at it this way. Because it is a process, it can never be a means to an end. Pleasure and enjoyment are seen as by-products of realizing a particular plan, and as a feeling, happiness can be used to indicate that people are in the process of realizing their life plan. These feelings can also be used to refer to the achievement of a plan other than their main goal, but they are still analogous to realizing their primary one. In this paper, the focus of happiness will be on overall positive feelings and satisfaction with life, as defined by the studies that were conducted to measure these variables, with an emphasis on money as a source of happiness.
In todays global world, the link between money and happiness, and its implications, is relevant for a growing number of people. As much of the worlds population moves away from sustenance existence, the question of what to do with ones wealth interests more and more people. Will it make people happier to give part of their income to those less well off, or will they be better off buying something they desire for themselves? For each choice, the question must also be asked, why does it make people happier, especially when the options are at opposite ends off a continuum? This subject has been debated for millennia.
In this paper, factors in this debate will be examined in terms of modern psychology. Social indicators and subjective well-being will be compared to determine the best way to evaluate happiness. Next income will be discussed, including its importance, cultural differences, and the possibility that more money can actually seem like less. Then the link between happiness will be explained from several different directions, including motivation and goals; self-determination theory, Maslows hierarchy of needs, and self-actualization; and discrepancy theories. Finally, the implications and applications in todays world will be examined, focusing on job satisfaction, socialism and communism v. consumerism and capitalism, and the feasibility of making everyone happy.
Social Indicators and Subjective Well-Being
There are several ways to measure happiness with respect to quality of life (Brock, 1993). The first is defined by the ideals of a religious or philosophical system. Christianity, for example, would define the good life as loving and helping ones neighbor. A key point of this, however, is that the individuals themselves do not determine the ideals. A second way to measure happiness and quality of life is by the satisfaction of preferences. If someone has everything that he or she wants, then it is possible to say that he or she is happy and leads a good life. The third way is defined in terms of how people rate their lives, based on their experiences. The first and last measures, known as social indicators and subjective well-being, respectively, will now be discussed in greater detail.
Social indicators are objective measures of individuals circumstances. They most often are examined as part of a geographic or cultural unit (Diener and Suh, 1997). They include demographic information, such as average age and number of children, as well as ecological, welfare, educational, and human rights information and statistics. Obviously, there are many different ways to measure these factors. Most information is obtained from government and pertinent organizational statistics.
A major problem with social indicators is that so much of their value depends on the wealth of a country (Diener and Diener, 1995). For example, in a sample of 52 countries, they found a 0.82 correlation (p < 0.001) between the per capita GDP of nations and books published per person. Another result was a 0.64 correlation (N = 101, p < 0.001) between inventions and discoveries and the per capita GDP of nations. Obviously, a poor country devotes its resources to the physiological needs of its citizens, such as food, and shelter, and therefore does not have as much money to spend on the pursuit of science and the arts. The question may then be asked, is it fair to use social indicators since there are obviously confounding variables affecting them?
Diener and Suh (1997) argue yes. There is more to quality of life, they point out, than living in a wealthy nation. A nation may have lots of money yet lack basic civil rights and freedoms for its citizens, something that obviously affects their level of happiness. Social indicators and wealth are not equivalent, and each can provide information not found in the other.
There are other strengths to social indicators. The most important, obviously, is their objectivity, which can be taken several ways (Diener and Suh, 1997). First of all, there is usually widespread agreement about what the value means and how it is measured. Since the value is so concretely defined (for example, live births per thousand), it can be measured precisely and with little error. Finally, and most importantly, social indicators do not depend on peoples perceptions and opinions, meaning that the researchers biases do not usually come into effect.
A second advantage is that they can measure things that are normative ideals for a society but may have no effect on happiness, such as clean air and lack of crime (Diener and Suh, 1997). They can also highlight problems that need to be addressed on a global level, such as deforestation, and the results of different methods of solving the problem. Other societies, in turn, can learn from this and try to avoid or imitate them when the same problems arise for themselves. Additionally, these highlighted areas may not appear using other indices, such as economic measurements.
However, social indicators have weaknesses (Diener and Suh, 1997). They are only as accurate as the information on which they are based. If something is underreported, the statistics will reflect this. Similarly, underreporting may differ across cultures, or the frequency of occurrences may be difficult to determine (e.g., live births in a country where most births occur at home).
Another limitation is that, although social indicators may be objective, subjectivity appears when deciding what to measure and how to interpret the results. For example, although an individual in a city may have a higher salary than someone working at a comparable job in a smaller town, the first person experiences a higher cost of living. This is not always evident when just looking at the raw numbers. Furthermore, how will the variable be measured? Take divorce rates, for example. Will this include first divorces, or multiple ones by the same person? Both methods will result in different numbers that can both be called the same thing.
Another issue related to the subjectivity debate is who decides what is good or bad. Some variables are obviously one or the other, such as murder rates and pollution levels. However, others, such as those relating to cultural or personal preferences, are less straightforward. If someone is religious, he or she may consider the number of churches important, as well as the number of times an individual attends a worship service, whereas this may not matter as much to a less religious person.
Additional problems arise when trying to determine the relevance of the statistics. Does one cause another, or are they both the result of a third factor, such as the effects of wealth that were described above? Furthermore, one must consider whether to use a global index (combination of indicators) of quality of life, or examine the factors separately (Diener and Suh, 1997). A general index may overlook important differences between individual indicators, whereas the reliance on solely individual factors may cause one to miss trends.
Diener (1995) developed a value-based index of quality of life to try to address these problems. It exists in two parts: the Basic QOL Index and the Advanced QOL Index. The former is more sensitive for the quality of life in less wealthy nations, while the latter is more successful for wealthier nations.
Nonetheless, relying solely on social indicators to determine quality of life and happiness may cause problems. Another method, taking into account individual experiences, may provide a fuller picture of happiness.
Subjective well-being is a personal measure of how someone is doing. A drawn-out proof can show how it is obtained. People constantly evaluate their lives, including events, themselves, and various life circumstances. These evaluations lead to emotional reactions within a person. The more positive experiences an individual has, the better life he or she considers his or her life, leading to the occurrence of more positive emotional reactions, thus leading to higher subjective well-being (Diener, 1994).
Subjective well-being can be defined by three characteristics: the presence of positive affect, lack of negative affect, and satisfaction with life (Myers and Diener, 1995). The first, often referred to as the hedonic level, is similar to life satisfaction, which is considered the appraisal of life as a whole. There is a high correlation between the two, since both are influenced by the same events (Diener, 1994). Additionally, the presence of positive affect and the lack of negative affect are not mutually exclusive opposites (Myers and Diener, 1995). Although the more time a person spends up decreases the amount of time one spends down, this says nothing about the intensity of the moods and fails to account for the amount of time spent feeling neutral.
There are various influences on subjective well-being. Some traits that are found in happy people, though not relevant to this paper, include self-esteem, optimism, extraversion, and a sense of personal control (Myers and Diener, 1995). However, it is not known if having traits makes someone happier, or if the reverse is true. For example, optimists may put themselves into situations that they know will have a positive ending, thus making them chronically happier. Alternatively, repeated positive situations may, over time, make someone into an optimist.
Subjective well-being has been found to be relatively stable over time (Diener, 1994). One might think that it would change as life events are constantly evaluated, but since most peoples lives are consistent over time, and since emotional states balance each other out, subjective well-being is stable also. Various studies have confirmed this (Costa and McCrae, 1988; Headey and Wearing, 1989; Zika and Chamberlain, 1992).
Subjective well-being can be determined by asking a single question or by multi-item scales (Myers and Diener, 1995). A popular measure is a question developed by Andrews and Withey (1976) to determine affective and cognitive components. It asks respondents, How do you feel about your life as a whole? Answers range on a seven point scale from delighted to terrible. It has very high reliability with other methods of assessing subjective well-being, such as the Satisfaction with Life Scale (Diener, Emmons, Larsen, and Griffin, 1985). This multi-item scale focuses mainly on cognitive judgments, and responses to items such as My life is close to ideal range from strongly agree to strongly disagree.
Additionally, it can be measured by means other than self-reports, including judgment of a friend or family member, or by the tone and facial expressions used during an interview (Diener, 1994). Non-self-reports correlate modestly with self-report methods (Costa and McCrae, 1988; Lawton, Kleban, and DiCarlo, 1984; Sandvik, Diener, and Seidlitz, 1993). However, due to the lack of overlap, both methods should be used when possible to assure that all aspects of subjective well-being can be measured accurately.
A problem associated with the self-report method is that it is exactly what the name says, that is, a self-report. When deciding on how they feel, people must cognitively evaluate their situations and put their emotions and thoughts into words, or at least concrete feelings. Obviously, they cannot accurately report on what they do not remember, or, more importantly, what they have remembered incorrectly. Priming, as well as the previous questions asked during the interview or on the survey, can drastically influence the level of subjective well-being reported (Diener, 1994). Moreover, Diener, Larson, and Emmons (1984) found that unhappy people overestimate their average negative affect while happy people overestimate their average positive affect. Similarly, people tend to recall more positive experiences when in a good mood, thus leading to a higher reported subjective well-being (Blaney, 1986). The reverse is also true for bad moods. However, these effects can be controlled for when individuals keep a daily record of their experiences and moods, or by leading them through a systematic life review (Diener, 1994).
A second problem with self-report measures is the level of denial the individuals apply (Diener, 1994). This may be for any number of reasons, including their maturity level, coping methods, and emotional state. Similar to this problem is the degree of social desirability in their responses. However, this has been found to be mainly a product of personality and not an artifact of the test. Furthermore, trying to control for this variability has led to lower validity of the measure (Diener, 1994). However, if this is still considered a problem, half the information may be gathered in face-to-face interviews while the remainder comes from impersonal surveys or group settings (Fujita, Smith, and Diener, 1993).
In light of all
these problems, and with the experience of thirty years of research in this
field, Diener (1994) made suggestions on how to better measure subjective
well-being. First, he advocated the recording of nonverbal behaviors as a
supplement to self-reports. Second, reports by significant others should also be
used to complement self-reports, as they give a different view of the person in
question. Physiological indices should also be used whenever possible, as well
as behavioral information such as sleeping and eating habits. Cognitive
psychology should be tapped, including an emphasis on priming, memory, and
attention. People should be evaluated at random, repeated moments during their
day, since this will give them less of a chance to dwell on their feelings.
Individuals should be given a chance to explain why they feel how they do, based
on their motivation, goals, and feelings of self-worth. Their case history and
biographical information should also be included. When assessing these various
measures, it is best to use more than
Synthesis
Social indicators and subjective well-being measures should be used in
conjunction whenever possible. Although sociologists and economists primarily
use the former, while psychologists use the latter, a more comprehensive picture
will emerge when they are combined, thus leading to a better solution to the
question of how to make everyone happy.
Michalos, a pioneer in the field of social
indicators, comments on this trend (1997). Most people tend to stay within their
own discipline and within that on their own specific area of concern. Another
problem is that researchers from different areas come at problems with
fundamentally different viewpoints and motivations. For example, economists may
be concerned with how low-income families allocate their money, whereas
politicians want to know how many programs they can cut before there is a
noticeable effect, sociologists are interested in the effect of poverty on
society, and psychologists would like to know how the children react to the
deprivation they feel in that situation. Only by using a standard set of terms
and concepts, Michalos says, can the goals of everyone be brought to the
attention of everyone concerned.
However, problems arise when trying to
combine both social indicators and subjective well-being measures for the best
view of happiness and quality of life (Diener and Suh, 1997). Politicians, for
example, tend to ignore both and concentrate mainly on the fulfillment of
peoples desires. This, though, has many limitations.
First, the reliance on economic standards
leaves out other variables essential to the quality of life, such as the crime
rate. Similarly, economic progress may actually be negatively correlated with
other facets of life. Diener and Diener (1995) studied the relationship between
national wealth and quality of life, as measured by the fulfillment of
physiological needs as well as human rights and scientific advancement. They
found several negative effects, such as carbon dioxide emissions and a higher
suicide rate, two things that would not be considered
ideal.
A second problem with the reliance merely on
economic standards is that peoples choices may not be what are best for them.
They may want things that go against the ideals dictated by religions or society
in general. Finally, the emphasis purely on monetary value takes away from the
humanity of people, as it obviously does not include the loves, hopes, and
dreams of people (Diener & Suh, 1997).
Income
The level of income individuals obtain dictates a lot about their life. Diener and Biswas-Diener (2001) summarized many different positive outcomes related to wealth: lighter prison sentences, better mental and physical health, greater longevity, and fewer stressful life events. These are in addition to better nutrition and larger availability of schooling, two things that people in the Western world take for granted as part of their culture. Obviously, it is impossible to live without money in todays world.
If money is important for happiness, will raising someones income make
him or her happier? Research on this issue says yes and no. It depends on who is
given the money, how much he or she receives, and when he or she gets
it.
Easterlin (1995) attempts to explain why the answer is maybe. He asks the
question, Imagine that your income increases substantially while everyone
elses stays the same. Would you feel better off? (p. 35). Most people would
say yes. They would be able to buy more than their neighbors and thus be envied
by everyone. However, over time, as individual incomes increase, the average
income of the society increases also, so that one is still equal to ones
neighbors. Prices also rise because of inflation so that more is needed just to
buy what was possible with less in the past. Most people do not realize that a
rise in income has even occurred, thus no rise in well-being occurred.
Empirical evidence exists to support this point.
However, an increase in income can have a positive effect to a point.
Some scholars argue that the relationship is curvilinear: an increase in money
has a large effect in poorer countries compared to an almost nonexistent effect
in richer countries (Veenhoven, 1991). As an example of this, in poor countries
more money provides food and shelter, whereas a lack of money means living in
squalor. Obviously, income makes a difference in the happiness of the people
involved in this situation. However, in a wealthy nation where more money means
the difference between a 25 and 29 television, more money does not affect
people quite as dramatically.
Nonetheless, people living in squalor can be happy, just as those with
more money than they know what to do with can be miserable. A deeper explanation
must be sought for the link between money and happiness.
Why the
link?
There are many reasons why money can equal happiness (Diener, Horowitz,
and Emmons, 1984). People with money can afford activities that are more
pleasurable and can also avoid negative events and people more easily. They have
a greater sense of security against unseen misfortunes, such as unemployment. In
modern Western society, where wealth is highly valued, making and having money
is often accompanied by respect and power, two possible sources of happiness.
However, there are pitfalls associated with money. The acquisition of
wealth often consumes enormous amounts of time and energy that could be devoted
to other areas, such as family and friends. Additionally, there are negative
factors associated with it, including tax audits and increased responsibility.
Furthermore, the happiness brought by money may not last. People may adapt to
their income level, causing their aspirations to rise so that more money is no
longer sufficient.
These reasons are all rather superficial, and besides they fail to answer
the question of why some people are content with a small home and few
possessions, while others must have the biggest and best of everything. Other
solutions must be examined.
The relationship between money and happiness depends, in part, on the
culture in which an individual exists. Although life satisfaction tends to
consistently retain the same mean level differences across nations, it varies
from nation to nation, and among groups within a nation (Diener, Oishi, and
Lucas, 2003). There are many reasons this happens.
One cause is everything that comes along with wealth: human rights, democracy, and equality. People cannot be happy unless they have basic rights and perceive themselves to be at least equal to everyone else in their society. Attempts have been made to sort out the relationships so that each part can be measured and studied, but so far, the results are not promising (Diener et al., 2003).
Another basis for the relationship between cultures is self-serving biases (Diener et al, 2003). They were briefly mentioned above in the discussion on subjective well-being reports. Specific to the current topic is the self-enhancement bias. This is found in European Americas, who tend to overestimate their experiences and abilities. Contrasting this is the self-critical bias, found in Asian Americans, who tend to underestimate their abilities. This in turn leads to a higher sense of life satisfaction for the former.
Additionally, the trade-offs between happiness and other values must be examined (Diener et al., 2003). Members of individualistic cultures have more chances to pursue their own goals; at the same time, the competitiveness of their endeavors weakens social bonds so that they are more likely to feel lonely and depressed, thus lowering their overall well-being. Conversely, members of collectivist societies share each others joys and sorrows, providing constant support, yet they are unable to take control over specific aspects of their lives, leading to frustration and lower levels of life satisfaction.
People must also choose to be happy now or in the future (Diener et al., 2003). Asian students tend to be happier when involved in activities relating to future goals, while Caucasians prefer activities that bring immediate enjoyment. However, Asian students continue to work at something until they master it, while Caucasians tend to switch to something else if they are not succeeding at an activity, leading to greater enjoyment of their chosen task. This may keep them happy and positive even if they perform badly at another activity, although they may not learn skills that will bring them future satisfaction later in life.
Furthermore, how a culture or group views happiness affects its response to well-being measurements (Diener et al., 2003). If it is seen as being top-down, then global satisfaction will influence satisfaction with specific domains; a bottom-up view will result in the opposite. Similarly, measures of whole life satisfaction will give different results than those of specific areas.
What people define as important for happiness also differs across cultures (Diener et al., 2003). Satisfaction with self is less important in collectivist societies than in individualistic ones, while freedom is more important for the latter. Wealth predicts happiness better in poorer nations than in richer ones.
Although some aspects of culture are different across nations and ethnic groups, some factors remain the same, such as motivation for doing something. In the next section, two theories of motivation will be discussed: self-determination theory, including intrinsic and extrinsic motivation, and Maslows hierarchy of needs, including self-actualization. Then discrepancy theories and their relevancy to the topic will be examined.
Self-determination
theory. Developed by Deci and Ryan
(1985), this theory consists of four types of motivation: intrinsic,
self-determined extrinsic, non-self-determined extrinsic, and amotivation. They
exist along a continuum from most to least
self-determined.
Intrinsic motivation involves engaging in behaviors purely for their own
sake because an individual enjoys them. This would include arts and leisure
hobbies, for example. People would partake in these types of activities even if
there were no incentives to do so.
Extrinsic
motivation, on the other hand, refers to behaviors that are undertaken as a
means to an end. The goal of this type of behavior is either to receive rewards
or to avoid punishment. It can further be broken down into two subgroups,
self-determined and non-self-determined extrinsic motivation. The former
involves personally choosing to engage in a certain activity because they
perceive it to be important or valuable. The latter, however, occurs when the
individual feels pressured to perform or act, either by personal reasons or
because of outside factors. An example of this would be exercising to relieve
the guilty feelings of having eaten too much.
Amotivation, however, consists of the lack
of either type of motivation. Individuals in situations like these feel that
they have no choice in the matter and must perform. They derive no pleasure or
punishment from the behavior. This is similar to the theory of learned
helplessness (Kowal and Fortier, 1999).
Furthermore, there are three motivational
determinants: perception of autonomy, perception of competence, and perception
of relatedness (Deci and Ryan, 1991). Autonomy refers to peoples need to feel
that they are in control of what is happening, and that the consequences they
face are directly linked to their choices. Competence refers to their desires to
interact effectively with their surroundings, and relatedness to their desire to
be connected to others and to experience a sense of
belonging.
A concept similar to intrinsic motivation is
that of flow, which is described as the pleasurable holistic sensation people
feel when they act with total involvement (in an activity) (Csikszentmihalyi,
1975, p. 36). It has nine main characteristics (Kowal and Fortier, 1999):
(a) The existence of a balance between the
perceived skills of an individual and the perceived challenges of a situation,
(b) a merging of action and awareness, (c) the presence of clear goals, (d) the
presence of unambiguous feedback, (e) concentration on the task at hand, (f) a
sense of control over oneself and the environment, (g) a loss of
self-consciousness, (h) a transformation of time, and (i) the autotelic or
enjoyable nature of the experience (356).
Flow has been found to be linked to both self-determined motivation and
the perception of relatedness determinant of motivation (Kowal and Fortier,
1999). When individuals are freely involved in an activity they enjoy,
surrounded by friends or family who also enjoy it, then there is a highly likely
chance that they will experience flow.
These concepts can be used to explain the
link between money and happiness. Someone who undertakes an activity purely for
the enjoyment of it will not care about the money involved, and furthermore will
not need wealth in order to appreciate what is occurring. People who are
extrinsically motivated, however, will need the extra incentive that money
provides in order to do what needs to be done. They may also need the pressure
of what others think to complete a task, compared to intrinsically motivated
individuals to whom the opinions of others are not
important.
The ideal situation would be for someone to
be intrinsically motivated, in which case money would not matter to him or her
except as a way to gain what he or she needed to be happy. However, these needs
would be self-determined and would not rely on what others
have.
Associated with this are the determinants of
motivation: autonomy, competence, and relatedness. If a person has control of
the situation, knows what is happening and why, and is surrounded by friends,
then he or she will be more inclined to keep doing it. Therefore, I believe that
if people are told that why do not need much money and why, and if their friends
believe the same thing also, then they can be happy if they choose to be in this
situation. However, all these things must occur in order for them to be truly
content, according to self-determination theory.
Maslows hierarchy of
needs. Maslow devised a hierarchy
of motivation based on basic human needs. He first devised a list of
propositions that must be included in any theory of human motivation (1943a).
Key points of this include 1) stress upon the end goal, and not the means to an
end; 2) many basic needs may be simultaneously expressed through any motivated
behavior; 3) almost all states that someone experiences are motivated by
something; 4) human needs can be arranged in a hierarchy, and each must be met
before moving on to the next; 5) classification of motivations must be based on
goals, and not simply lists of drives; 6) the situation of the organism cannot
be a substitute for motivation; and 7) motivation and behavior theories are not
synonymous, as motivations are only one class of behavior
determinants.
Maslow used the preceding principles to develop his hierarchy of needs
(1943b). These needs start with basic needs and move up through
self-actualization. In order to move on, the previous need must be met in order
to allow focus on the next.
The first need proposed by Maslow is physiological. He postulates that
this need is predominant over all other needs, including safety, love, and
esteem. This need can make all other needs seem non-existent, or at least push
them into the background until it is met. However, for most people in the
Western world, this need is almost always met, except for extremely extenuating
circumstances. When hunger is taken care of, a person can move on to the next
need, safety.
Safety needs, Maslow thinks, are most easily studied in children who have
a more black and white view of danger. He illustrates this with their desire for
a stable daily routine, the lack of which makes the world look unreliable and
unsafe. The average child desires a safe, orderly, predictable, organized
world, which he can count on, and in which unexpected, unmanageable or other
dangerous things do not happen (373).
After safety needs are met, love needs take precedence. They include
love, affection, and belonging, and are not always synonymous with sex, which
can be used to satisfy many different needs at once. A way to achieve this is
for people to find a place in their group. Additionally, this need involves both
giving and receiving love.
Close on the heels of love come the esteem needs. They require the esteem
of others as well as self-respect and self-esteem. This group can be broken into
two subsets, according to Maslow. The first includes independence and freedom,
achievement, adequacy, strength, and confidence in the face of the world. The
second group is based on recognition, attention, appreciation, importance,
prestige, and reputation. To satisfy this need, the individuals must have an
unwavering, well-established, high evaluation of themselves.
The final stage in Maslows hierarchy of needs is self-actualization. It
is best summed up by Kurt Goldstein, who said, What a man can be, he must be (376). This is described as a desire
for fulfillment, and obviously its form will vary greatly from person to person.
It often includes the desire to know and to understand, and the search for
meaning. This need is the one most relevant to the paper.
As rigid as this hierarchy may appear, Maslow had many caveats and
exceptions. First of all, in order for the needs to be met, especially the
higher ones, a persons basic rights and freedoms must be guaranteed because
without them it is nearly impossible to satisfy any needs. Second, the ability
to fulfill each successive need depends on an individuals cognitive capacities.
People cannot be blamed for not having the desire to attain self-actualization
if they do not understand what it is or realize that it exists. Third, conscious
goals are more or less important depending on how close they are to the basic
needs. This association can also be applied to behavior and defense
mechanisms.
Maslow warned that the hierarchical needs
are not always in the same fixed order. For example, the drive to create can be
so powerful as to overshadow all other needs. Also important is that someone may
want something but does not act to meet or fulfill the need. Additionally, after
long periods of deprivation, an individuals level of aspiration may be
permanently lowered or even deadened. From the opposite point of view, if a need
has been met for a long time it may be undervalued and higher needs may become
more important; but when the higher need can no longer be satisfied, the lower
need again becomes more important. This is illustrated by people who work hard
at developing a career and do not worry about how they will get their next meal,
but when they are laid off and cannot find another job, food becomes a priority.
A final exception is martyrs for a cause, who will deprive themselves of lower
needs to obtain a higher goal.
A few other basic points need to be made
about Maslows hierarchy. Most important is something he refers to as degrees of
relative satisfaction (1943b). According to this, an individual can be partially
satisfied in all his or her basic needs while simultaneously partially
unsatisfied. It is not all or nothing. However, there are decreasing percentages
of satisfaction as one goes up the hierarchy. For example, 85% of the
physiological needs may be met, compared to 65% safety, 50% love, 35% esteem,
and 5% self-actualization. These higher needs will gradual emerge by slow
degrees from nothingness.
Finally, these basic needs are more
unconscious than conscious. They are common to all people, especially when
compared to superficial desires and behaviors. Lastly, and most importantly,
most behavior has many different motivations behind it and meets several needs
simultaneously, depending on the individuals situation.
Maslows theory can be applied to explain
the link between money and happiness. Because people are at different levels at
in the hierarchy, and because their level of fulfillment varies according to
their position, they have different things that they want. If someone is at the
lowest level, for example, money will be seen as a way to get food and shelter,
which is equated with happiness. Therefore, more money will be welcomed.
Skipping ahead to the need for esteem, a person at this stage may hinge his or
her sense of worth on his or her possessions, which are viewed as inducing a
sense of worth and purpose. For this person, also, money will be equated with
happiness, because it will allow him or her to buy more things, thereby bringing
about a greater sense of worth.
However, the value of self-actualizing
people is not tied to possessions. They equate their worth with their
accomplishments. Rather than rely on what others think of them and how others
view their possessions, what matters to them is their own personal opinion.
Money, needless to say, is not important to this type of person, unless it is a
means to achieving their goal, whatever that may be.
The previous two theories
focused on motivation as a way of being happy with something. Discrepancy
theory, however, focuses not so much on why individuals do something, but rather
on how they feel about it, and specifically their desires.
Desire discrepancies are very important as a way of determining
happiness.
For answers, they examined another discrepancy theory: social comparison.
Karl Marx may have said it best: A house may be large or small; as long as the
surrounding houses are equally small it satisfies all social demands for a
dwelling. But if a palace rises beside the little house, the little house
shrinks into a hut (cited in Easterlin, 1995, p 36). As applied to income,
Hagerty (2000) examined 7000 adults from around the
This theory also has problems. A main limitation is determining to whom
people compare themselves (Solberg et al., 2002). For example, people may
compare themselves to those not as well off as them, so that they in turn look
better and feel better about themselves. In addition, comparisons depend on
someones relationship to others. If individuals admire someone, falling short
of his or her accomplishments may inspire them to do
better.
In light of the drawbacks of the social comparison discrepancy theory,
the past comparison discrepancy theory was examined. According to this, people
compare their current situation to past living conditions (Solberg et al.,
2002). However, the direction of the comparison depends on whether the
comparison event is contrasted or assimilated with ones current life and
whether one sees life as continuous with or disconnected from the past. Another
difficulty with this theory is whether past comparison discrepancies apply only
when past events are related to current desires.
Solberg et al.
(2002), in a series of three
related studies, tried to develop a unified discrepancy theory that addressed
several of the other theories limitations. They postulated three main
hypotheses: 1) Discrepancies from what one desires and possesses cause
dissatisfaction; 2) desire discrepancies can be produced by low current
standing, high aspirations, or both; and 3) desire discrepancies play a crucial
role in mediating the influence of social and past comparisons on income
satisfaction (727).
The first study manipulated the items that people wanted while holding
social and past comparisons constant. The researchers put participants into two
different groups: those that did not have enough money to buy less desirable
objects in the year 2050, and those who did not have enough to buy more
desirable objects. They found that the participants in the less desirable
condition were more satisfied with their income, demonstrating that manipulating
desires can influence satisfaction with income. However, the results were only
hypothetical since they took place in an experimental
setting.
The second study took place under more realistic conditions. This time
they manipulated the income that participants felt was necessary to achieve
their unique desires. The researchers had participants determine their income
based on what occupation they wanted, then had them rate their desire for actual
objects, and finally asked them if they would be happy with their income.
Solberg et al. then manipulated the costs of the desired object so that
participants would be placed into one of two groups: high cost, where they would
not be able to afford everything they wanted, or low cost, where their desires
were within reach. The individuals then said how satisfied they would be with
future income, in light of the discrepancy between the two figures. Participants
in the low-cost group were significantly more satisfied than those in the
high-cost group, demonstrating that the ability to attain what one desires is
important to satisfaction with income.
A third study was then conducted that did not involve hypothetical,
future situations. Participants were asked to answer 32 statements relating to
income satisfaction, desire discrepancy, and past and social comparisons.
Results showed that desire completely mediated the relationship between past
comparison and income satisfaction, as well as partially mediating the
relationship between social comparison and income satisfaction, thus explaining
previous mixed results between each theory.
Taken altogether, these studies have important repercussions for the link between money and happiness. First, people are more satisfied when their desires are fulfilled. Second, the more realistic peoples desires, the happier they are. Therefore, Solberg et al. suggest that the way to be happiest is to keep ones desires on a level close to ones resources and abilities.
Furthermore, people can often
achieve positive subjective well-being by matching their goals to the assets
they possess (Diener and Fujita, 1995). Although similar to desires, goals tend
to be more concrete and realistic. People may want something but will not work
towards it; goals, on the other hand, tend to be something that people try hard
to attain.
Diener and Fujita found another result pertinent to this topic. The more
relevant a resource was to the attainment of someones goals, the more the
resource affected that persons well-being. Although this applies to external
resources like money, it was also true for social resources. Women especially
valued close social relationships and tried to concentrate their resources in
that area, whereas men excelled more in dominance related tasks and focused
their resources on making an impact on others. Although there is no further
discussion on gender differences in motivation, they must be taken into account
when trying to determine how best to motivate people. Obviously, regardless of
gender, one must try to match desires and goals with available
resources.
However, this is not to say that people cannot have wishes and dreams.
King and Broyles (1997) view wishes as a healthy part of everyday life,
completely unrestrained from reality. They see wishes as a coping mechanism, as
when individuals cannot realistically have what they want. By saying what they
would like but knowing they cannot have it, they may pacify themselves by making
a final effort to achieve it. However, they found a high correlation between
well-being and participants rating of the probability of their wish coming
true, thus supporting the point made by Marx and Solberg et al.: being satisfied
with what one has is very important to being happy.
Implications and Applications
From philosophical and business theories to government policies, the
relationship between money and happiness, tempered with motivation and goals,
continuously affects the world. In this section, two real world examples are
examined: job satisfaction, then socialism and communism v. consumerism and
capitalism. The idea of making everyone happy is then discussed in light of all
other information presented, including the feasibility of it and suggestions on
how to go about it.
An important concept related to income and happiness is job satisfaction.
Numerous studies have linked satisfaction with job related variables, although
not as many examine the role of money. In this section, various studies will be
analyzed in light of this factor. Theories discussed above will be used to
explain results. Although many studies are older, it is assumed that they are
still relevant to this topic.
Warr and Jackson (1984) examined the financial strain of job loss on
psychological health, comparing people by age and length of unemployment.
Although 8% of the surveyed men reported improvement in three months due to the
removal of occupational pressures, 20% reported deterioration, including
depression, anxiety, insomnia, and irritability. The greatest decline was in men
aged 40-49, possibly because of dependent families. However, after six months
the changes leveled off, perhaps because they were able to adjust to their
situations and change their goals and desires to match their new
income.
Near, Rice, and Hunt (1978) took a different perspective in trying to
determine the relationship between life and job satisfaction. Although they
found job satisfaction to be highest among professionals and managers and lowest
among laborers, occupation and life satisfaction were not significantly related,
nor were occupational prestige and life satisfaction. However, health and
satisfaction with life were positively correlated with household income; they
were highest among unemployed people not seeking work and employed people not
needing work, and lowest among unemployed people seeking work and employed
people needing work. This illustrates two principles: that job satisfaction is
just a part of overall life satisfaction, and that intrinsic motivation provides
greater happiness than extrinsic.
Ethnicity and gender can play a role in the relationship between
happiness and job characteristics (Crohan, Antonucci, Adelman, and Coleman,
1989). For example, when women had a high personal income, their sense of
perceived control rose, leading to higher overall life satisfaction. The same
also applied for a high occupational status and for black women. This is
consistent with the self-determination theory, which implies that perceived
control leads to greater happiness. When other factors were examined, such as
being married, a strong correlation was found between higher life satisfaction,
higher job satisfaction, and higher earnings. This, too, plays a part in the
self-determination theory; a connection to others increases happiness
levels.
White (1981) found that job satisfaction had a higher importance as
predicting life satisfaction when people were satisfied with their pay. This
relates to what Near et al. (1978) found when examined with respect to
motivation. When people did not need to work for money, they were happier than
when they needed the income. Extrinsic motivation comes into play here to
explain why they are working, and as shown earlier, it is not as able to produce
happiness like intrinsic can.
These examples show that job satisfaction can be improved if money is not
the reason for working. However, this is not the case for most people who must
work to pay bills. Another way must then be found to intrinsically motivate
them. This would be best achieved if the workers enjoy what they do and can
become wrapped up in it, thus achieving flow. Another way to intrinsically
motivate them would be to let them take a role in decision making (autonomy,
according to self-determination theory). Additionally, if employees values are
congruent with their employers and they can understand why they are doing their
jobs (competency), as well as doing them in a friendly environment (relatedness)
that provides opportunities for them to do their best (self-actualization), then
high job satisfaction is possible.
Socialism/Communism v.
Consumerism/Capitalism
A
fundamental ideological problem relevant to this topic is socialism and
communism v. consumerism and capitalism. The latter ideology has shaped the
culture of
Communism
can be summed up by the famous slogan, From each according to his abilities, to
each according to his needs (Myers, 1998). This idea was made famous by Karl
Marx in his book The Communist Manifesto, but can also be traced back to
utopian societies of the early nineteenth century. After the 1918 revolution in
Capitalism, too, had high hopes. It is a system where one is rewarded for taking risks, and the harder people work, the more they earn. According to this system, based on Darwinism, the fittest survived and flourished until someone or something better came along and took their place. However, this ideology also had flaws, based mainly on human greed, which caused people to look elsewhere for answers.
The
philosopher Hegel proposed a dialectic theory of the philosophy of history,
which said that a movement (thesis) produces a countermovement (antithesis), and
the two then combine to form a new movement (synthesis). In the case of
capitalism and communism, two polar opposite ideologies, two syntheses have
arisen: socialism and consumerism. Socialism is similar to communism in that the
government owns much of the industry (means of production), yet private
entrepreneurship also exists. It is becoming increasingly influential in
These syntheses reflect a growing move away from extrinsic goals and motivation, and towards a growing call for truer economic equality for everyone. One reason for this may be the publics growing dissatisfaction with the ever-increasing gap between the rich and the poor.
At
the same time, however, there is frustration when one is not rewarded for his or
her work, yet at the same time another individual seems to be getting a free
ride from the government. This frustration can lead to a backlash against
socialism. However, by changing peoples motivation from extrinsic to intrinsic,
and by meeting their lower needs and providing a chance for self-actualization,
a greater understanding of the welfare system may be brought about. However,
this brings up questions about the fundamentals of human nature and social
loafing. The problem of being happy with what you have is very complicated.
Make Everyone Happy?
Is it possible to achieve the goal of universal happiness? As cited
above, Easterlin (1995) has hypothesized that raising the income of all will
not increase the happiness of all because
happiness and income are relative: people are happier when they have more than
their neighbors, and less happy when their neighbors have more. Obviously, then,
increasing everyones income will not change anyones position.
Therefore, another solution must be found.
The key to happiness as discussed above is being satisfied with what one
has and not wanting what one does not have. Furthermore, people must understand
and accept this for themselves, while realizing that the opportunity remains for
them to do their best.
Although this may be hard to accomplish,
I believe that it is actually possible given enough time and effort. The most
effective way to accomplish this would be cognitive therapy, instituted in
schools and by the media.
The main theory of cognitive therapy is a
focus on the thinking and cognitive processes of clients (e.g., their appraisals, attributions, belief systems, and expectancies) and the influence of these processes on emotions and behaviors. The implication is that any change in either feeling or action must result from cognitive change or restructuring. Clients are actively taught to perceive reality differently and to relate differently to themselves and to their environments (p 42, Ritter, 1985).
This therapy has been found useful in treating various disorders, such as
depression and anxiety, in clients ranging from school children to the elderly
(Ritter, 1985). Based on the need to convince people to change their beliefs, I
believe it will also be effective for the purposes described in this
paper.
Conclusion
Happiness and money are intricately linked, although not in a direct
fashion. In order to determine the relationship, each term must be defined and
measured. Happiness consists of two components, social indicators and subjective
well-being, which should be used in conjunction with each other to give the best
estimate.
Money is important in todays world because it dictates every part of
life. However, its effects vary across cultures. Raising the income of everyone
will not increase happiness, as part of its allure is in having not only enough
for what one needs, but more than ones neighbors.
The need for money can be explained by motivational and discrepancy
theories. Self-determination theory, for instance, says that activities are more
enjoyable when they are self-selected and an individual has perceived control,
autonomy, and relatedness. Maslow, however, believes that people follow a
hierarchy of needs, satisfying each lower need until they are able to become
their very best. Discrepancies, furthermore, play a large role in how people
perceive their desires and needs in relation to everyone else. The smaller the
perceived discrepancy between what they want and what they have, the happier
they will be.
These theories all have everyday applications and implications. By
developing a theory of motivation and satisfaction, for example, job
satisfaction can be increased without raising someones salary, which is
important for businesses. Furthermore, in terms of world political systems,
equality can be achieved if everyone is willing to accept that there is more to
life than money, as long as they are free to choose that path. A way to
encourage this belief is through cognitive therapy over time. This, I believe,
is the way to make everyone truly happy with respect to
money.
As well thought out as this idea is, it has several problems that must be
overcome before it can be widely effective. Human nature, for instance, tends to
be rather selfish. Secondly, people are set in their ways and resistant to
change. In order to overcome these problems, more research needs to be done on
the effects of using cognitive therapy to strengthen the self-actualization
process and instill in people a true desire for intrinsic motivation.
Nonetheless, I remain confident that this can be done.
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