Economics, with its talk of opportunity cost and utility, is philosophically a measurement of happiness. Ben Bernanke picked up this thread in a commencement speech Saturday at the University of South Carolina. His speech walked graduates through his opinions on the basic tenets of economics and happiness.
Money Not Necessarily The Key To Happiness
Not surprisingly, the Chairman of the Federal Reserve had quite a lot to say about the role of money in our lives and our happiness. Richer countries have more resources to devote to medical care, nutrition, sanitation, and safety. And it’s intuitive to believe that countries who can afford to focus on these things can expect to have better health and economic indicators like infant mortality, GDP, and environmental statistics. But Bernanke also spoke of the Easterlin paradox, which states that even though richer people report they are happier more often, on average, than poorer people, happiness does not grow in accordance with wealth. In other words, the richer people in Costa Rica are as happy as the richer people in America, despite a wealth discrepancy of almost 25%. Comparisons of wealth actually decrease a person’s level of happiness and increase internal pressures to earn more, which takes time away from family, hobbies, and gratitude. Bernanke spoke about how, beyond a basic sustenance level, money is not a utility of happiness — certainly a good lesson for new graduates.
Joy Found In Community, Relationships
Bernanke went on to say that the happiest people are those who spend time with friends and family and who emphasize social and community relationships. He mentioned flow: An economic term that can be applied to our daily lives in instances when we become so engrossed in a project or activity that we lose track of time. Although being adaptable can be useful in certain situations, it can detract from happiness by allowing us to absorb circumstances rather than work to enjoy them. Abraham Lincoln was credited with what he called the “utility-maximizing theory of behavior,” where humans are conditioned to act so as to maximize their own happiness. Like Lincoln, Bernanke stressed the importance of the feelings we get when we do good for ourselves and for others.
Welcome to the Real World, Graduates
Happiness research has experienced a bit of a renaissance in recent years. Like the subject itself, the research has been full of underpinnings and contradictions and a basic affinity for pleasure. As Adam Smith, whom Bernanke referenced in his speech, said in his intro to “The Theory of Moral Sentiments,” “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him.” Bernanke last expressed the importance of ethical behavior and wished good luck to all the graduates who entered a new phase of happiness over the weekend.
To read the full text of Bernanke’s May 8 speech, click here.