About Rationally Speaking

Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Monday, March 31, 2008

Spending will make you happier, but not the way you might think

Common sense says that we are happier when we get more money to spend on ourselves. At least, that’s what passes for commonsense in modern capitalistic societies, from the United States to China. Indeed, when Elizabeth Dunn and colleagues at the University of British Columbia and at Harvard Business School asked a bunch of their students (the usual subjects in social science studies), that’s exactly what they found: students thought they would be happier getting $20 than $5, and that they would be happier spending the money on themselves than on others. Turns out, the students were spectacularly wrong.

Research over the past several years has steadily contradicted the capitalistic assumption about human nature. For instance, it is well known that there is only a weak correlation between income level and self-reported happiness across the globe, with the relationship plateauing (meaning that additional money does not increase happiness) at surprisingly low levels of income. And yet, people keep playing the lottery, or its white collar equivalent, the stock market. Why?

Dunn and colleagues have recently published an intriguing paper in Science magazine (21 March 2008) which begins to present us with a surprising answer: apparently, we literally don’t know what makes us happy. The researchers conducted two surveys and one controlled experiment, with the results of each clearly pointing toward the same conclusion: people feel significantly happier when they spend money on others, regardless of how much money they make. For instance, one of the data sets concerned the self-reported happiness of a group of people before and after they got a bonus at work. The results clearly showed that “prosocial spending was the only significant predictor of happiness” after people received the bonus, and this effect “was significant when controlling for bonus amount.” In other words, it didn’t matter how much of a bonus people received.

Dunn and collaborators suggest that in attempting to understand what determines people’s degree of happiness, we have been paying too much attention to what they call “life circumstances,” such as one’s religion, gender and income. It turns out that people adjust pretty readily to those factors, something that would not have surprised Stoic and Epicurean philosophers of time past. What makes a difference, Dunn et al. argue, is the sort of behavior in which one can be proactive, such as charitable giving. In other words, the ability to make a difference for others, no matter how small ($5 given away measureably increases our daily dose of happiness) alters our perception of life in a positive fashion.

This sort of research not only puts into question the entire structure of a society bent on personal gain and on the (empirically wrong) idea that a larger car will make you happier, but strongly suggests that people ought to reconsider what they assume to be “obvious” about the priorities in their own lives (oh, and the environment would benefit too!). Perhaps science is telling us that we should enroll in a philosophy class or two to find out who we are and what we want, the latest Hummer be damned.


  1. And how "personal gain" hinders us "the ability to make a difference for others"? Are you not saying that we feel better when we actively spend money on others than when this money is subtracted from us and then reallocated?

  2. Yes, that is what I'm saying. But if you are suggesting that we should replace taxes with voluntary donations, I simply don't believe one can run a state based on people's individual inclination toward charity.

  3. Putting others first is not exactly what socialism achieves either, Massimo. In as much as you seem to have this gripe against capitalism, (and I think you were "educated" into believing that) oftentimes countries that expect huge gains in taxes from the population, generally don't get significant returns in profits from business owners either. For a person who expects precision in other areas of his philosophy and life you are not giving much thought to whether socialized resource allocation places money in the most needed place or not.

    New Mexico is unquestionably socialized. And for as long as I have lived here, medium to small business owners really struggle to make it. Everything in our taxing and bureaucratic structure really works against both they and medical professionals. So while it is one thing to give up 30% in taxes for the cause of people who really have sincere health or aging issues and infrastructure, it is highly discouraging to hardworking people to realize that the funds that are divided out by the gov are given 60-75 % of the time to people who really could do some work for themselves.

    A great many of recipients of welfare WOULD feel a lot better about themselves if they could give something back to society too. But libs unusually frown on that and call conservs "uncompassionate". So how about if we just don't use the poor and downtrodden to beat each other up with anymore? That would be a real change for the better.

    Giving is unquestionably good. But the gov taxing system impersonalizes the charitable aspect of helping out those in financial distress. And that level of depersonalization causes the cycle of poor money management to continue on in many cases. And that is not a loving thing to allow to continue on.

    My sense is no matter what the cause, the ACTUAL level of neediness ought to be established before we just toss resources out there. Asking for more precision in the system cannot possibly be wrong.

  4. New Mexico is socialised, Cal? Then what does that make the Netherlands?

  5. "In as much as you seem to have this gripe against capitalism,..."

    There are plenty of legitimate gripes against capitalism, just as there are legitimate criticisms of other social-economic systems.

    Regardless, there is no "socialism" in New Mexico, or the U.S., but there are welfare state programs supported by taxes (i.e. food stamps, medicare, medicaid, section 8 housing, social security etc.).

    And you do know that there was "welfare reform" in the 1990s that drastically restricted who and for how long people could actually receive living-subsistence welfare. The perpetual welfare recipient is an artifact of the past, unless of course they really are unable to work do to disability.

    Furthermore, have you considered that there are structural features of capitalism that create various problems?

    The goal of capitalist firms is to maximize profits. One way to do this is to attempt to keep wage and health benefits costs as low as they possibly can.

    Meanwhile, owners of rental property and health insurance are also attempting to maximize profits. It doesn't take too much imagination to see how market forces such as these can put the squeeze on workers, particularly the less skilled.

  6. Mexico is supposedly socialized to a greater degree than New Mexico, yet we are currently paying 1.79 per gallon for fuel more than Mexico is. Can you believe it? At least we were as of one day ago. And it is said, of course, that our fuel rates are on account of taxes.

    Just about anyone who lives here who knows something about governing and governments (I have two family remembers in politics) knows we more socialized than most states in the US.
    There are possibly a few (almost) success stories regarding socilization. But even Finland, which was once considered one of the better models for socialization, is now thought to be developing high rates of alcoholism, as are other scandi countries. Interestingly, Indian reservations are known also for the same affliction. It seems that this is the natural result when you take away the incentive of a person to be thoroughly responsible for his own affairs.

    But few would disagree that unchecked and unregulated capitalism is certainly cause for concern. for people like yourselves who claim to be very interested in the rights of the individual, you ought to understand that handing over more "power to the people" is by no means the eventual goal of the socialist or communist republics.

    Is that what you really want?

    Corruption in Mexico, for instance, has not gotten better it has far gotten worse. What about Italy? Same thing. Corruption is worse than ever.

    It is a totally fallacy that capitalism alone generates corruption.

  7. Personal gain has too many factors to really put it on just one topic. I mean, if you didnt have anything as a kid, then maybe that new car is a stepping stone for you to have more confidence. It's really tough to say, but I like the overall intent of this post.


  8. Over the years, I have been telling faculty that it is precisely their lower salaries which makes them more content compared to other professions. This places their focus on giving to the students and feeling good about "the sacrifice", rather than on self-centered economic gain.

  9. Does the study show whether or not anonymous spending on others makes us happy?

    For example, would a random man be happy if he was able to snap his fingers and $1000 would be added to the bank account of another random person who our man #1 didn't know?

    I'm forced to think that we can only be happy in ways in which evolution has allowed us to be happy. As in - whatever it is that makes us happy has to benefit us somehow, or we have to think (at least subconsciously) that it benefits us.

  10. Cal, the high rates of alcoholism and binge drinking in Northern Europe have nothing to do with "socialism"; it's because capitalist corporations like Diageo make two-for-one offers and cut-price booze in order to get consumers to spend more. They have created a culture in which getting bladdered every night is seen as de rigeur.
    Please do your homework before making any more egregiously false statements.

  11. "It is a totally fallacy that capitalism alone generates corruption."

    Another fallacy is the Strawman fallacy, which is what you are employing here. Has Massimo or anybody else made such a claim as you state above? No!

    Massimo has made a very basic claim, a truism really, about the values that are promoted in a capitalist economy. That is the value of unlimited consumption, which is allegedly supposed to make us happy. Do you deny that is a value promoted in a capitalist economy?

    Then Massimo goes on to cite a study that suggests that giving and service to others is more likely to make people happy. This seems to be something you would likely agree with based on your previous comments elsewhere.

    So are you just being contrarian for the sake of being contrarian?

    You read something construed to be critical of capitalism, and immediately your defenses go up. Even when it would seem to agree with your own professed values. You are a walking contradiction.

  12. "So are you just being contrarian for the sake of being contrarian? "

    Not really. There are aspects of the anti-capitalism pov that tend to take away from the individual being entirely responsible for his own affairs. Are you being a contrarian for not being able to see the value of a system which allows its participants to think independently and be responsible for the thinking and calculating that they do?

    "That is the value of unlimited consumption, which is allegedly supposed to make us happy. "

    I don't know of a single person who REALLY thinks that the value in capitalism lies in "unlimited consumption". There is a guy, however, who lives down the road to the NW of us who lives very extravagantly, but I don't think it has done him any favors and I can't even say if he is a capitalist or not. Seems like he must be tho. If that is where most capitalism actually lead, I would have nothing to do with it.

    here he is:


    But AH! I hear Jeff has given a lot of his funds to science! So if any of these extremely wealthy people give a quite a bit to science, is it then going to be okay for them to be capitalists? ;)


  13. "I don't know of a single person who REALLY thinks that the value in capitalism lies in "unlimited consumption". "

    As usual Cal, you cannot follow or stay put on a single point, probably because your reasoning is mush.

    Pay attention to what I actually wrote, (or what Massimo wrote) and address that.

  14. Sheldon,
    I paid attention to what he wrote and that is the problem.
    I still feel like the focus is not quite right if we ask the question of whether giving makes us more happy than getting. The question ought to be, do I (or you ) in fact improve the life of the person we give to. That is really being "others centered" What you do (give)and how you do it is extremely sensitive when dealing especially with an indigenous society. (all of us other spoiled people don't count that much)
    Since a lot of people do not understand the delicacies of how you do what you do , there were some mistakes made last week when we were in Mx. by another group that were allowed to travel with us in to the mountains. I just hope, as our doc said the other day, that there will be no deaths because of things some people in the other group did. We always follow certain rules about giving, what we feed people and interacting in a manner for their good and not for ours. The other group, got into the "we'll give what we like however we like and do as we please" mentality.

    My husband kept trying to relay to some of this group that we are to leave as small as a footprint as we possibly can, (except for positive things)and most of them, including their leader, more or less blew him off.

    Point being

    If one decides to do something for another person, it darn well really better be for the good of the other person!

    as for the points on capitalism..
    During last weeks trip to Mexico I also met a young woman who moved from Ca. 1-2 years ago. And keep in mind that most of California is about as far left as you can get, okay. She tells me that the life style in Ca. is all about what you can get (of course we know this) and just about all most people do is chase their tails to GET MORE. She said that even tho her family (parents brothers sisters) live there, she has no interest in ever going back. And that just because of the lifestyle in ca. So yes, no one would disagree with you that unchecked capitalism is damaging to a society. But what causes unchecked capitalism? You act as if their can only be one cause and one explanation. It seems to me that M thinks it is the weakness of the right, while the population centers that actually hold to this kind of capitalism and lifestyle are anything but on the right.


  15. Cal, you did NOT pay attention. You are adding statements not made by the others. Is this because you mistakenly think that you know what they are trying to say, which is somehow different from what they actually wrote?

  16. "It seems to me that M thinks it is the weakness of the right, while the population centers that actually hold to this kind of capitalism and lifestyle are anything but on the right."

    Kimpatsu is right Cal, you are not paying attention.

    Where in the post does Massimo even mention anything about "right vs. left"? He does not. This is because "right vs. left" terminology is rather sloppy shorthand for a multi-dimensional and complex political universe. You are attempting to flatten that universe.

    Nor did Massimo make any arguments for "socialism", or unfettered welfare state etc..

    Instead of responding to what Masssimo and others actually write you continue to go off on tangents, thus making it difficult to actually have a conversation.

    The topic is about how the pursuit of ever increasing consumption and self-interest is less likely to lead to happiness than other alternatives.

  17. Sorry to disrupt the thread of responses. I am not sure what I agree with in the original post.

    Statement: (a) students thought they would be happier getting $20 than $5, and (b) students thought they would be happier spending the money on themselves than on others.

    My thoughts:

    (a) Go to some monestary, some third world village, any culture, any time in history. Set up two desks. Hand out the equivalent of $100 at one desk, 10 cents at the other. Which desk gets the longer line? My guess is the result is "what passes for commonsense in modern capitalistic societies," in which case we can go back to the generic "common sense."

    (b) same experiment, now following what people do with their money. Some people will spend only on themselves, some will gift part of it, and some will give away most or all of it. However, I think that will occur across time and macro-economics. Greed and charity seem to be themes in the records of most, if not all, cultures since records have existed.

    Statement: There is only a weak correlation between income level and self-reported happiness.

    Thought: "Money can't buy me love." How much research effort was expended to obtain this profound insight? I'm sure somebody can mine quotes and aphorisms of the retorts.

    Statement: The ability to make a difference for others, alters perception of life in a positive fashion. People feel significantly happier when they spend money on others, compared to spending money on themselves.

    Thought: "It is better to give than to receive." Another less than novel insight, like saying that people have to learn from the past. By the way, I had a proposal for "Do unto others as you would have them do unto you" which was rejected by the Department of Defense. This surprised me because I thought it was both a very Christian and predatory free-market idea at the same time.

    Comment: It seems to me that the original post relates to "wealth" and "consumerism" as societal values. Perhaps these are associated with "capitalism" because that is the economic model that provides the individual (other than a select few) with the opportunity to acquire wealth and the choice on how to use it.

  18. While I'm at it:

    The last line of the post is worthy of a separate comment.

    Perhaps science is telling us that we should enroll in a philosophy class or two to find out who we are and what we want, the latest Hummer be damned.

    Maybe science can tell us why ads for material things appeal to people around the world, and probably across time, in contrast to appeals for selfless giving.

    If this is evolutionary biologic behavior, rather than a learned social construct, how should society (philosophy, economics) respond. Is it to have a philosophy course such that, when one comes across a windfall, the response is not "I'm going to Disney World!" but "I'm giving it all to charity!" I don't know.

  19. @Pugowner:
    You ned to read the latest from Dr. Michael Shermer, in which he demonstrates that homo economicus does not exist.
    You can form your two linesw, but add one caveat: everyone at ine 1 gets $100, but prives for a weeks groceries cost $100, and at line 2 give out 10 cents, but an identical week's groceries cost 8 cents... and then see what happens...

  20. Kimpatsu,

    Shermer is making a different observation, which is that individual economic choices are socially relative and emotive rather than absolute and rational.

    Let's go back to the original post. It states that students thought they would be happier getting $20 than $5. Period.
    True or false? I say "True."

    However, I posit that is not a "capitalist assumption", but an assumption that would be made by most people across time, culture and economic systems.

    True or false?

  21. @Pugowner,
    Such decisions are not made in a vacuum. You cannot ask merely, "Would the students be happier receiving $20 or $5?"; you need to supply the background to the receipt. What is everyone else getting? What are the circumstances?
    Without this, and hypothetical is meaningless.

  22. Kimpatsu,

    I am simply quoting the study:

    Social psychologist Elizabeth Dunn of the University of British Columbia (UBC) in Vancouver, Canada, wanted to find out what kind of spending really does make people happy. So she and colleagues surveyed 109 UBC students. Not surprisingly, most said they would be happier with $20 in their pocket than they would with $5. They also said they'd rather spend the money on themselves than on someone else.

    However, when Dunn's team gave 46 other students envelopes containing a either $5 bill or a $20 bill and told them how to spend it, those who shelled out on others were happier than those who spent it on themselves.

    Based on your reply above, clearly you believe that this study (and therefore any conclusion Massimo may have drawn from it) is hypothetical and meaningless.

    OK. That wasn't my point, but it is a reasonable observation.

  23. @Pugowner:
    You've now added extra factors, such as the students being directed how to spend the money. Ergo, the statement is no longer in a vacuum.

  24. It seems like others have dropped this thread.

    Studies show that people are not happier because of personal accumulation of material wealth. Helping or sharing with others is more likely to be associated with happiness than keeping or acquiring things for oneself.

    Massimo is stating that the basic ethos of modern capitalism is to value personal acquisition of wealth, so that one can have the most money and stuff (think Donald Trump, who should therefore among the happiest of people). Neither the rich, nor the poor students in a simple study, are happier for chosing selfish accumulation of money or things. Ergo, capitalistic values are misdirected - societally, how to be happy, ecologically, etc.

    I am stating that the desire to accumulate things for oneself is not a capitalist value per se. It is true of people throughout time and place, and has an obvious evolutionary and social behavior basis (squirrels don't find happiness by sharing their nuts with less fortunate squirrels).

    I think there is a distinction between capitalism and consumerism. Capitalism has as its incentive and reward money/wealth for the individual. One is free to use that money/wealth wisely or otherwise. Warren Buffet is a capitalist on par with Donald Trump, but I think his values on what to do with his wealth (his home, his spending) are quite different.

    Students in a capitalist society would be wise to take a philosophy course to learn how to be happy with their earnings, be they teachers or billionaires.

  25. I think the reason that Don Trump is not the happiest man in the world is because he doesn't own everything. Wasn't it Andrew Carnegie who said "It is not enough that I succeed; everyone else must fail"? (It may have been said by other people at other times, too.) In other words, his happiness is predicated not upon other people's happiness (the "share and share alike" ethos Max advocates) but on schardenfreude. Could he be borderline psychopathic?
    I have no idea where everyone else has gone, but I'm having fun discussing this with you. (Lies down and stretches out in all the new empty space that's been created...)

  26. Pugowner said:
    "I think there is a distinction between capitalism and consumerism. Capitalism has as its incentive and reward money/wealth for the individual."

    Whoa...! Not so fast! Seems to me that capitalism and consumerism are neccessary sides of the same coin. The goal of the capitalist, generically speaking, is to accumulate capital and profits. The capitalist may save and live relatively frugal, and/or be a philanthopist.

    However, the capitalist as individual agent and capitalism as a system depends on the promotion of ever expanding consumption, the expansion of markets etc..

    Thus, that is what I meant in my comments to Cal, that capitalism promotes the values of consumerism. That capitalism has generated as a byproduct the most sophisticated propaganda industry ever known to humankind i.e. the advertising industry.

    This industry assaults us with images and messages that associate happiness, status, and satisfaction with the consumption of commodities. Just turn on commercial television, or flip through a glossy magazine for evidence of this claim.

    Whether people explicitly believe that the accumulation of more or fancier commodities will make them happier or not is irrelevant, evidently many people are persuaded by this propaganda on some level.

    If there are not people who continually desire things, whether they really need them or not, then there will be some capitalist investors who will be making less of a profit.

    And this by the way is why if you file a U.S. tax return, you will be getting an economic stimulus check from funds borrowed from the Chinese; in the hope that you will go out and spend it to keep the economy going.

  27. Sheldon,

    Thanks for following the posts and chiming in.

    Admittedly, I will be out of my league if we get too serious or in depth with economic theory or philosophy.

    You write "capitalism as a system depends on the promotion of ever expanding consumption, the expansion of markets etc."

    It is human nature, to value acquisition, and I agree that capitalism reflects and amplifies that aspect of human nature.

    Capitalists, in system terms, have a Darwinian need to change to thrive or otherwise fall behind.
    Large individual companies and even large segments of the market have been forced to contract in order to survive or provide increased market value.

    However, human nature is not going to change, and capitalism is indeed of the same coin as human nature.

  28. pugowner,

    let me interject a brief comment here. You say:

    "It is human nature, to value acquisition, and I agree that capitalism reflects and amplifies that aspect of human nature."

    That's a very broad assumption for which there is limited, if any, evidence. Plenty of societies throughout human history have functioned outside of the capitalist model, and the little we know about how humans lived in prehistoric times tells us that they were sharing resources, not accumulating them (just like other primates and contemporary hunter-gatherers). Assertions like yours are the result of recent capitalist thinking a la Rockefeller...

  29. Adding to Massimo's last thought. There are also people who try to swim against the current in our own society, attempting to resist the pressures to constantly spend and consume, to try to live simpler material lives.

  30. Sheldon

    I agree with your statement. That is the point I was making in the Warren Buffet vs. Donald Trump comparison. One can be capitalist economically, yet function as an individual or group with the values you just expressed.

    However, your other point was that capitalism as a system depends on the promotion of ever expanding consumption. I view that as a Darwinian aspect of capitalism. It will expand or contract based on outside forces, but I concede it's essence is to expand. Social values from outside capitalism have to be applied, to which capitalists find it inherently necessary to adapt.

    Massimo, thank you for taking the time to make a comment. You note that plenty of societies, not just prehistoric hunter gatherers, share resources, not accumulating them. But perhaps that is more at the level of and within the tribe/pack, and closer to subsistence levels. Proud Mary "people on the river are happy to give."

    I think I would create conflict if I went to a "non-acquisitive society" and handed out valued items, but only to a portion of the larger community. A small unit might share, but only because the acquisition remains "in the family." This problem would be especially true between communities, providing largesse for people on one side of the river, but not the other. Human nature.

  31. Additional comment:

    Kimpatsu correctly encourages real world examples, so I thought of communes and the Israeli kibbutz as modern societies based on sharing instead of personal acquisition.

    However, these communities have not thrived as models emulated by others, and they have adapted to allow more personal holdings. I think they are "noble" experiments precisely because they go against human nature.

    I see Massimo has a new post, so it is probably time to move on. Thank you for challenging me.

  32. In response to Massimo's post and the exhortations of Jesus - I gave away everything I had. Now I'm unhappy. Naturally I will be suing both Massimo and the church (again). Darn-it, will I never learn? Curse my mushy reasoning.


Note: Only a member of this blog may post a comment.