Plenty of interesting experiments and studies have confirmed that our levels of happiness remain at a relatively constant state regardless of life’s trials and tribulations. In 1978, Brickman and Coates published their famous paper, entitled “Lottery Winners and Accident Victims: Is Happiness Relative?” As they found in their study, “Contrast with the peak experience of winning should lessen the impact of ordinary pleasures, while habituation should eventually reduce the value of new pleasures made possible by winning” both of which prevent the long term elevation of happiness.
Contrast, in other words, means that the first steak you had was much better than the hamburgers you used to love. So now hamburgers hold none of the joy they once did. Habituation, on the other hand, means that eventually you grew accustomed to eating steaks, and they now bring you only as much joy as the hamburger once did. So you are back where you started—only now you have to eat a $40 steak every time you want the amount of pleasure that a $5 hamburger used to provide.
As you can guess, this is where the treadmill analogy comes in. No matter how much money you have or how many steaks you eat, you eventually return to the same level of overall happiness regardless of your fortune. The same, it is worth noting, is true for the unfortunate. Although lottery winners were not substantially happier a year after their winnings; neither were paraplegics significantly less happy a year after their accidents.
So what does this mean for government spending programs?
As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.” Yet, the idea that those living below the poverty line are as happy as the richest were 100 years ago is laughable. In fact, happiness in the country has stayed remarkably steady since the 1970s.
Arthur Brook’s Gross National Happiness suggests that happiness is linked to one’s belief about upward mobility and opportunity. As he found, Americans who believe that with “the way things are in America, people like me and my family have a good chance of improving our standard of living” were more likely to be happy and less likely to believe that income inequality was a major problem.
For those that answered in the negative, income inequality was a much bigger issue. And, according to the Gini Index, income inequality has steadily risen in this country since 1960. Interestingly, that’s around the same time that federal spending began to grow exponentially, even taking into account inflation. In fact, federal spending as a percentage of GDP is at a 60-year high, while tax revenues are at a 60-year low. (It should come as no surprise, then, that our national debt began to double every 8-10 years starting in the 1970s.)
Of course, as the government has ballooned, so too has its involvement in every part of the economy through the ever-expanding Federal Register. The Competitive Enterprise Institute released its annual report finding that federal regulatory compliance was costing $1.75 trillion. Last year, the Federal Register came in at a whopping 81,405 pages, and agencies spent $55 billion enforcing those rules.
The result of all of this is a depression in opportunity—the very thing that does have a correlation with happiness—while increasing the level of income inequality. High marginal tax rates supporting a massive government make it harder to save the money to start a new business. Onerous regulations make it harder to open the business. And unnecessary licensing requirements for jobs like florists and decorators make it hard for people to switch to a profession they would find more rewarding and, for jobs like lawyers, make it much more expensive for people to hire legal counsel to protect their rights in small dollar matters.
Despite all of this spending and regulation intended to protect the most vulnerable, Eric Weiner’s Geography of Bliss found that happiness was relational. Robert Putnam’s Bowling Alone agrees and follows the collapse of America’s communities. A collapse, at least in part, precipitated by the government’s monopoly on services that crowds out private charities and churches as suggested by Ross Douthat’s latest and outstanding column this week.
So here we are. Despite no increase in Americans’ happiness in the last 40 years, government spending continues to snowball regardless which party is in power. And any suggestion of cutting Medicare or raising the age for social security is met with a resounding thud by those that say it would crush the American Dream.
Just like the person who goes from hamburgers to steaks to caviar, the government is chasing a level of happiness on a hedonic treadmill going nowhere. And if all of this government spending and regulation is having no effect on the happiness of its citizens, what are we doing here?