Relative Wealth: The Key to Happiness?

You know what they say... "Money can't buy happiness". Well, it turns out, like many things they say, that's only sort of true. Money does appear to buy happiness, regardless of how much you have, as long as you have relatively more of it than the people in your immediate proximity.

Don't believe me? Well, this has been very well studied and thoroughly documented in sociological study after sociological study (Robert Frank's book "Luxury Fever" for reference).  The guy with the biggest shack in the poor part of town is almost always happier than the guy with the crappiest mansion in the uppity neighborhood. Humans tend to compare themselves to their neighbors and then decide if they should feel happy about their privileged circumstances, or sad about their comparative shortcomings.

This concept has been further validated by the popularity of literature that resonates with the masses. In "King Rat", a novel by James Clavell, the author built a story around the lives of dirty, starving war prisoners, living among rats in a mud pit. The King Rat was the guy who lived in the dry corner of the pit and somehow got cigarettes from the guards. Despite his bleak existence, he was well off compared to the other prisoners in the pit and, therefore, about as happy as any free man living in comfort with relatively more wealth than his neighbors.

Unfortunately, relative wealth leads to an infinite number of "arms races" that we commonly call "keeping up with the Joneses". You cannot reach a level of income, choose to live within those means, and coast along through a happy existence if your neighbors keep aspiring to a grander lifestyle. You must keep up; otherwise, you will become relatively less wealthy and subject to the daily comparisons that defeat happiness. No one can stop climbing unless everyone stops climbing, and those near the bottom have no incentive to stop. Their very happiness depends on gaining a little relative wealth. This produces a perpetual cycle of struggle to gain wealth.

The solution? There may not be one. However, if we could all try to compare our means to our needs rather than comparing our means to our neighbor's means, that would be a step in the right direction. Simply ask yourself, are your basic needs met? If so, can you stop longing for more and start appreciating what you already have. 

It sounds simple, but we all know it is not.