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Focus on the source of most satisfaction, not consumption

Clair Brown, Professor emerita of economics | March 27, 2018

(Clair Brown wrote this blog with Simon Greenhill, a senior economics major at UC Berkeley who is writing a thesis on global poverty and the refugee crises. The commentary first appeared in Psychology Today on March 26.)

Buying stuff can make you happy for a short time. But you will revert to needing another happiness boost by buying even more stuff. We can, however, replace the boom and bust of a consumption-driven search for satisfaction with lives that are more fulfilling and economically sustainable. Psychologists have, for example, found that altruism creates happiness and produces a positive feedback loop leading to more altruism. In addition, neuroscientists have found that helping others engenders brain activity leading to happy feelings.

With a more holistic view of the world, decisions that make moral sense are also sound economically.

Sociologist Rachel Sherman’s recent finding—that wealthy liberals are often uneasy about their riches, hiding price tags from their hired help and guarding their bank account balances more carefully than the details of their sex lives—can be extended far beyond penthouse apartments and second homes in the Hamptons.

The complex relationship between wealth and social stigma is on daily display here at UC Berkeley. It’s rarely more evident than among privileged undergraduates navigating an environment far more diverse than their hometowns and learning to play the social games of adulthood. Twenty-year-olds in ragged jeans and Goodwill sweaters buy five-dollar coffees twice a day. A young woman who spilled sparkling water on her laptop had a new MacBook Pro in time to submit her homework the next day. One student posted an Instagram picture of her new Mercedes one day and, hardly a week later, a screenshot of her bank account balance, in the red, with a caption about how broke she was.

Our collective tendency to compare ourselves to those wealthier than us, forgetting those with less, isn’t just a quirk of human character or a testament to our selective social blindness. Thorstein Veblen, the 20th Century economist who coined the terms “conspicuous consumption” and “invidious comparisons,” first pointed out how individuals use luxury goods to show off their social status. As early as 1899, Veblen observed that people were living on treadmills of wealth accumulation, competing incessantly with others but rarely increasing their own well-being.

Our valuation of consumption rests on comparing ourselves to one another, and these invidious comparisons lead people from different socioeconomic backgrounds to ascribe wildly different values to the same material objects. The way we measure our social standing has far-reaching consequences, driving much of our personal life satisfaction and determining our collective impact on the environment.

Brown’s research on U.S. standards of living between 1918 and 1988 found that as family income grew over time, families tended to emulate the spending patterns of richer families, spending a larger share of their income on luxury or positional goods. As Americans’ incomes rose, they fulfilled their basic needs and then spent more and more money to showcase their wealth to others.

With rising incomes comes frivolous spending, which itself drives ever more needless consumption, all so we can try to maintain our relative standing and life satisfaction. Sherman’s research reinforces something we’ve known since the turn of the 20th Century:  luxury goods don’t add to personal well-being, and can even make people feel less happy. Feelings of social discontent and anxiety rise with growing inequality and keep people fighting to maintain their social position, leaving them unsatisfied with their new, fancier, lifestyles.

Today, the story of invidious comparison and ever-increasing consumption is also an environmental one. Weeks before COP 21, a paper by economists Thomas Piketty and Lucas Chancel reported that the world’s wealthiest are responsible for the lion’s share of greenhouse gas emissions by individuals. Topping the list of world high-emitters are American’s 1 percenters, who account for over 300 tons of greenhouse gas emissions per person. That’s fifteen times more emissions than the average American and fifty times more than the average person worldwide, according to figures from the World Resources Institute.

Yet most Americans, not just the rich, need to dramatically reduce consumption to meet the goal set by the Paris Climate Accord:  2.1 tCO2e (tons of carbon) per person per year by 2050. The United States’ current 16.5 tCO2 per person (2014 data) means that the U.S. must reduce carbon emissions by nearly 90%. This kind of reduction is a mind-boggling challenge, yet a combination of personal lifestyle changes and activist government can create a modern economy where people live more meaningful and less materialistic lives. Lavish consumption will finally be seen as the folly it is. When we consume to keep up with our neighbors, we aren’t just failing to fulfill our own desires, we’re expending our limited emissions budget without improving our lives.

In her most recent work, Brown explores how we can restructure our economy with policies that reduce inequality, reduce carbon emissions, and live more meaningful lives. When we ask students and friends what is important to them, we tend to get answers about relationships, helping others, and using their talents to help the world. Contrary to what many economic models assume, no one says they want to consume more.

When people focus on what brings them the greatest satisfaction, and not what guarantees them an ever-increasing income, they are unwittingly practicing what we call Buddhist Economics. Brown has dedicated her recent research to understanding how individual well-being and global sustainability can be integrated to an economic framework.

When satisfaction and happiness seem to elude you, think about what you truly care about. Spend your time and money on activities that you think are meaningful and lead to a worthwhile life. Stop worrying about how to become even richer or about which luxury goods to buy. Focus on how fortunate you are with your income, job, family and friends. Privileged students like those we see around UC Berkeley should be grateful for what they have, and move beyond conspicuous consumption to find long-lasting happiness. Realize that as a Middle American, you are one of the richest people on the planet—and that if we leave our conflicted relationship with wealth behind, we can find ourselves immeasurably richer.

Comments to “Focus on the source of most satisfaction, not consumption

  1. Hi
    Thank you for sharing this post.Buying stuff can make you happy for a short time.
    people will focus on what brings them the greatest satisfaction not consumption.
    Thank you

  2. While we’re revivifying Veblen, how about a similar shout-out to other 20th century visionaries who told it like it was, such as Sigmund Freud and our own Robert Bellah?

    Freud, contrary to the pop image of him that we so enjoy tearing down, always insisted that living up to our ego ideals was a deeper and more durable source of happiness than the discharge (cathexis) of id impulses. (Translation: see what you wrote above about altruism vs. consumption).

    Bellah and his acolytes demonstrated over and over again that tribalism and identity politics, not to say aspirational consumption, were hollow comforts without the deeper ties of moral conviction and consistency. But the need to publish new books and learn the same lessons over and over again — this time with infographics and hyperlinks, yay! — means that we have to forget before we can remember/discover that Buddhist-ish wisdom has been empirically proven every generation or so going back eons.

    Carbon footprints are the Jain himsa against jivas of our tech age.

  3. UC endowment altruism from their alumni
    is demonstrably lower, niche for niche,
    than is private university endowment altruism (Stanford, USC)
    tapping into their similar-niche, financially successful alumni.

    Public university students are so clever to financially game the system?!

    Mostly invisible elites in their redacted chapter in that classic metaphor, the Tragedy of the Commons?

  4. It’s a tough sell — trying to tell literally EVERYBODY that they’re doing it wrong; that the way they are living is practically suicidal. It nudges over toward the absurd when as the blog points out, the people who are doing it best — who are succeeding in our world the most; the one percenters — are the people who are driving the ecosphere as we know it off a cliff the fastest. And I guess that’s perfectly okay with mainstream textbook economics. Maybe Buddhist economics will catch on and we’ll beat the Reaper.

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