Paul Krugman's May 2000 article, “Reckonings; Pursuing Happiness”, is about money vs. happiness. His main point in the article is that happiness cannot be bought. Although many people believe this is possible and try to make it so, Krugman uses supporting evidence to show that for the most part, it just isn't possible. He writes about surveys that were conducted after WWII and the man who compiled the information Richard Easterlin. Krugman explains that from these surveys, Easterlin came up with the “Easterlin Paradox” which says, “Above a very low level economic growth does not seem to improve human welfare”. This study was done in different parts of the world with random groups of people. Easterlin found that when asked, people were no more happy 30 years ago than they are now, and the varying degrees of affluence played no major role in their happiness. The study also showed that many people aren't happy with the amount of money they have because the next guy might have more; it's all part of the keeping up with Jones' idea.
Krugman cites David Blanchflower and Andrew Oswald's findings that say people find more happiness in being married and employed than in being rich. He is careful to point out that this affects people on both sides of the political balance. Some people want a higher minimum wage but others are forecasting that that would mean there would be fewer jobs available and the increased happiness of those still employed would be negligible. He compares our current social and governmental system to that of France explaining that although in theory it might sound good, the unemployment rate there is double that of America 's due to their policies. Krugman concludes by stating that even though the current system in America isn't the best, it's still better than other parts of the world.
I agree with the main idea in Paul Krugman's article that money doesn't buy happiness, but I don't think that the way in which he argues his point is succussful. Krugmans's article has strengths and is well written, but begins to dwindle toward the end. Overall I don't think the article was completely effective. The article is well organized and easy to read; it starts out strong but toward the end his argument begins to weaken. In the first part he builds up a solid head of steam with his examples and sources but then seems to lose the intensity of his argument in the last three or so paragraphs of his article. He compares America 's government to that of France , which I don't think, is a relevant comparison, and his conclusion is a bit disappointing in that it seems as though he has talked himself out of what he was arguing originally.
The beginning of his article is quite convincing; he uses good supporting evidence and outside sources. His first reference is to a survey done in the 1970s by Richard Easterlin. Krugman relies on Easterlin's results quite a bit and spends a considerable amount of the article referring to Easterlin's findings. The results of the survey are in conjunction with Krugman's argument that having more money doesn't mean having more happiness. Although the surveying was done decades ago, he addresses this issue by pointing out that subsequent evidence concurs with that done in the 70s. He then moves to Blanchflower and Oswald's paper, which has similar findings but approaches the matter in a different way. Their paper concludes that having money can make people happy but that other parts of one's life seem to override the importance of money. This example is relevant but is a bit confusing for Krugman's purpose. It goes against Krugman's argument saying that money does buy happiness, but since “its influence is swamped by non-pecuniary factors” (i.e., marriage, being employed, etc.) the money equals happiness equation is somewhat masked, and therefore appears to go along with Krugman's argument.
The last half of the paper is more in economic and political terms. He writes about raising minimum wage and the economic affect that it would have on people. He explains that
even if this happened, it wouldn't help anyone in the long run. This makes sense because all things being relative, everyone's wages would eventually rise in response to the minimum being raised. Those people that feel like they were just bumped up a notch would still be as far below (economically) everyone else as they were before.
Krugman's last illustration is not as convincing as the rest. He compares America 's policies to that of France . His example is that France 's government policies seem more attractive because they offer better health benefits and mandatory paid vacations. He explains that the flip side of these great benefits is that France 's unemployment rate is double that of America 's. He implies that it is better to be under paid and struggling in America , than it is to be unemployed, yet better taken care of in France . I don't see how this illustrates that money doesn't buy happiness. Krugman writes that being unemployed is demoralizing and therefore leads to unhappiness, but that would mean that happiness is attributed to being employed and making money, thus buying said happiness.
Krugman shows through some of his examples that it is a documented concept that money doesn't buy happiness, but overall I don't think this was an effective argument. I agree with Blanchflower and Oswald's findings that happiness is something that must come from other parts of our lives rather than our socioeconomic standing. Krugman does a relatively good job of proving his point but because he loses strength at the end of his article, it becomes unconvincing.
By the time I reached the end of the article, any excitement that I had for the argument had been deflated and I didn't really care anymore. If Krugman had left the latter examples out of his argument and focused more on the former (surveys, etc.) I think it would have made for a better article.
Responding to a Rover
Robert H. Frank wrote an article entitled "Timmy's Range Rover", published in the New York Times on December 22, 1998. This article discusses the differences between Christmas shopping of the wealthy vs. the middle-class. Explaining that the wealthy are buying gifts like miniature Range Rovers that are more expensive than average real cars. Frank describes the idea of the consumption tax to replace the income tax. He considers this tax to be beneficial because it will decrease extravagant spending on most levels by creating incentives to save. Frank points out that most Americans are unsatisfied with what they have and are always trying to keep up with the class above them. Americans now have more money to purchase more items than ever before, but Frank believes this obsession to achieve what is just out of our reach is helping the producers and the consumer is left with just the price tag. A consumption tax would decrease the amount of extravagant spending.
Considering that I believe that a consumption tax would not create the equality that Frank believes and I think may even further expand inequality, I still agree with several of Frank's reasons for needing a tax of this nature. First, there is a need in my opinion to lessen the gap between the rich and the poor because the huge difference creates unhealthy competition. A consumption tax would provide incentives to save but the wealthy have a greater percentage of income that they are capable to devote to savings. Workers at the middle-income level will spend the vast majority of their lifetime trying to reach a higher social status, only to realize that the only significant improvement in status will be seen by their children, not themselves. The wealthy in contrast experience a lifetime of luxury and freedom that the middle class pays for with their lives but will never be able to taste.
Second, I believe the lack of equality detracts from helping people to achieve contentment. Frank states that the wealthy buy toys that exceed the price of the middle-class' families entire yearly spending. At the same time, families of the middle-class are striving to become wealthier and acquire fancier commodities to experience the so-called better life that is marked with material goods, and not moral substance. The lower class has to devote a larger percentage of their income to necessities. Together both classes are reaching for champagne while sparkling cider is cheaper and healthier.
Finally and most importantly, I am concerned that this quest for material wealth detracts from being able to achieve happiness, which I feel comes from contentment. As one family purchases baseball equipment or basketballs for presents and see that their kids are unsatisfied because the neighbor across the street received an X-Box or dirt bike, the first family then feels less content than they would've hoped and perceives that the family with the dirt bike has vastly passed them in contentment. The truth is the second family may feel the exact same way because their friend of the family's child received a personal hovercraft. This creates a vicious cycle in which nobody becomes content with what they have.
Now consider if everybody in the neighborhood had pooled their funds for a single gift that would benefit the entire community, assuming it was possible that they could ever possibly agree on one thing. Take for example a community without a park, the whole community may come to an equal contentment by pooling funds and creating one thing that would benefit everyone. Furthermore such an effort could inspire a mutual feeling of contentment, equality and benefit to the community's social status.
Frank, Robert. “Timmy's Range Rover.” New York Times 22 Dec. 1998: 31.