Wealth, Economics and the Attainment of Happiness

As 2010 draws to a close, we could safely argue that it has been another economically perplexing year for Australia and the world at large

According to recent trade figures, the Gross Domestic Product (GDP) in Australia expanded at an annual rate of 0.20 percent in the third quarter of 2010. From 1959 until 2010, Australia's average quarterly GDP Growth was 0.88 percent reaching an historical high of 4.50 percent in March of 1976 and a record low of -2.50 percent in June of 1974.

Australia's economy grew at its slowest pace in nearly two years in the third quarter of 2010, as global volatility and a soaring currency weighed on exports, pushing the Australian dollar to parity with the us dollar. We were spared by the strength of Australia as a major regional financial centre and a vital component of the global financial system.

Australians should feel somewhat happy as we were successful in eluding the perils of major recessionary forces that were threatening to induce a harsher reality on our economy. The fairly strong performance of the stock market mixed with less than vibrant property market dynamics have generated mixed emotions of some happiness, and some tolerable unhappiness interludes. Employment rate looks promising, commodity prices are on the rise, and there is a glimpse of hope on the horizon as financial institutions might be considering the easing of some of their borrowing protocols.

So practically speaking, some of us should be better off today than at the beginning of the year, at least in terms of material well being. While others cherish the stability of their mental being as they wait anxiously for the departure of 2010. No doubt, the strong performance of our stock market and the surge in the prices of our treasured resources have reinstated the multi billionaire status on a list of few and our mining magnates. Some of the wealth has trickled down to people in lower income brackets, and the feel good effect is spreading in some economic circles and in the mining spheres of influence. This begs the question: Are we now mostly happier?

Let's not get too excited, I am not suggesting that we should look for the answer in the technical and the fundamental analysis of the stock market. However, we can't dismiss economics and financial markets as irrelevant to this question. These days, the economics of happiness is shaping up as the paradigm to shifting attitudes, and fast becoming the focus of the new age media.

The influence of economics on our mood and sentiment cannot be ignored any more. It is being seriously deliberated and explored by a cross-section of social scientists, including economists. The findings are interesting; apparently, while our economic well being and growth continues to improve our income and standard of living, there were no signs to show that they make us actually happier!

Perhaps, this is just another proof that money cannot buy love or happiness, as many "wealthy" individuals can verify. Economic studies on happiness confirm that while people with very low incomes become significantly happier as their earnings rise, once they reach certain level of income, any further increases in earnings bring little, if any, extra happiness.

According to Maslow's Hierarchy of needs, beyond a certain income level, people do not necessarily get happier as they become wealthier. An explanation for this dogma is that people adjust quickly to changes in living standards. This notion is worth analyzing and qualifying as it has strong policy implications.

While governments typically use GDP growth as a measure for well being, the link between GDP, stock market performance and happiness is elusive at best of times. It's therefore essential that the role of governments be extended to include the development of ideal conditions for its citizens in which happiness can thrive across the board.

Another and more important reason why more money does not necessarily make people happier is that they tend to compare their situation with that of others. It seems that they will be happy with less, as long as they are better off than others. Several studies confirm that people are often more concerned about their income relative to others than about their absolute income.

psychologists dedicated lengthy chapters and research to happiness and well being. An authority on the subject is Martin Seligman, a professor at the University of Pennsylvania, who suggests three ways to find happiness: "the pleasant life", which consists of experiencing as many of life's pleasures as possible, including getting educated, being happily married, living in a place you don't want to move out of, having close friends, going to restaurants and movie theatres, etc; "deeper contentment", which lies in getting absorbed in your work or in things you do best and losing yourself in the process; and "the meaningful life", where engaging with a cause or an institution supplies a sense of belonging to something much bigger than oneself.

Unemployment, insignificance and uncertainty are major causes of unhappiness. Governments and private industries in the civilized world should converge in an effort to promote happiness amongst their citizens. Creating exciting and rewarding working environment is not attained by increasing the average wage and decreasing work hours only, as evident by the European experience. But further, allowing their people to view their jobs and efforts as adding significant value to their lives and the lives of the people in their communities might be another avenue towards economic happiness.

According to the human needs psychology. All human motivation to happiness can be attained by acquiring one or more of the six primary human needs, these are: Certainty, the need for stability, safety and comfort. Variety, the need for stimulus and change. Significance, the need to be special and worthy of attention. Connection & love, the need for connection with others and to love and be loved. Growth, The need to develop and expand. Contribution the need to give beyond one's self to the community.

The attainment of these human needs will lead to a pleasant, rewarding and meaningful life, thus creating the essence of the economics of happiness.

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