The evidence shows that growth does little or nothing to
increase happiness after people reach a level of middle-class economic comfort
that the average American reached decades ago. The economist Richard Easterlin
first noticed in 1974 that surveys showed Americans had not become any happier
since the 1950s, despite decades of growth and rising income across all
economic classes. This finding still holds up today: American’s self-reported
happiness peaked in 1958, and it has jogged up and down a bit but has never reached
that peak again. Though our per capita GDP has more than doubled, we are not as
happy as we were a half-century ago.
International comparisons prove the same point. Beginning in
1990, the World Values Survey asked people in many nations how happy they are. The
graph shows the results of a recent survey, comparing the happiness rating from
this survey with the per capita GDP of each nation at the time. We can see that,
in lower income countries, the happiness rating generally increases as income
increases, but after countries reach about one-half of the United States’ per
capita GDP, happiness no longer increases significantly as GDP increases.
This result is not surprising. In poor countries, more
income is needed to provide people with decent housing, food, education, health
care, and other essentials; it makes sense that people will become happier as
they can afford more of the necessities and basic comforts of life. But when
people reach about one-half of the average American’s current income, they have
enough to make them comfortable, and there is relatively little benefit to
consuming even more.
America’s per capita income in the 1960s was less than
one-half of what it is today (after correcting for inflation), and Americans felt very prosperous at the
time: In 1958, a best-selling book called America “the affluent society,” and the economic boom of the 1960s made the
nation feel even more prosperous. Though there was still poverty in the
country, the average American of the 1960s had the necessities and comforts
needed to live a good life.
Once you have the basic elements of economic
comfort, such as good housing, health care, and education, and you also have
enjoyable luxuries, such as music, books, and travel, consuming even more does
not bring significant benefits - but growth continues to cause massive
environmental costs even after it stops bringing significant benefits.