Most of modern economic theory is based on the premise that we, as human beings, maximize utility. To an economist, utility means how much people want something. If an economist sees someone working hard and sacrificing to buy a house, the assumption is that houses have a lot of utility to people. However, Jeremy Bentham, the British philosopher who coined the concept of utility and is responsible for “utilitarianism”, conceived of this term as meaning happiness or pleasure.
Economists tend to assume that utility is good, and people should get what they want. However, sometimes people make choices they come to regret. Greasy food certainly tastes good, but those who become obese, develop diabetes and heart disease may later wish they had shown more restraint in consumption. The question becomes, should society care about people’s present wants and desires, or future ones? Bentham’s utilitarianism looked at a good society as one that made its people happy. But what if the things that people desire don’t bring them happiness?
Recent happiness research has led to some surprising and disturbing findings. People appear to frequently seek out things that make them unhappy. One of these involves the use of social media, specifically Facebook. In a 2019 study by economist Hunt Alcott and colleagues looked at how much study participants had to be paid to stop using Facebook for 1-2 months. The median was $100, and the average was $180. Interestingly, the researchers found that the people who stopped using Facebook were happier afterwards, with lower levels of depression and anxiety and higher levels of life satisfaction. The change was about 25-40% of the benefit attributed to psychotherapy.
Why do people spend so much time with something that decreases their happiness? It’s possible that social media becomes an addiction, just like alcohol. Or people are compelled by motivation other than happiness, such as the fear of missing out.
As another example of the discordance between happiness and utility can be found in people’s choice of commuting time versus the happiness that comes from owning a larger house with more land. Economist Robert H. Frank reports in his study that the larger homes in the suburbs don’t compensate for the increased commute time when measured in terms of happiness.
The general disconnect that many studies find between long term happiness and acquisition of material things is a reflection of the power of advertising and our false belief that getting more stuff is the way to achieve happiness. If having fame and fortune provided happiness, than all those people living in the big mansions should be the most deliriously happy people in the world. All you have to do is read any magazine or news article to see that this belief is not true, yet we all somehow continue to strive to acquire more material stuff, and wonder why we are still not happy. So if it is not money and stuff, what do we need to be happy people? Stay tuned – the next posts will deal with the results of happiness research, and what we can learn from it about how to increase our own happiness in life.