Whether or not money can buy happiness is a continued debate. Billions of people in all parts of the world sacrifice their ambitions and subconscious tensions on the altar of profitability and higher incomes. Millions of people dream to achieve the level of wellbeing, when earning money will no longer be a problem to them. Legal or illegal does not really matter, as long as these strategies lead individuals to the desired monetary outcomes.
Professional economists assert that more money does not buy happiness. As a result, it makes no sense for people to pursue money. Yet, the reality is quite different, as money, wealth, high incomes, and wide opportunities which they open make people extremely satisfied. Based on the current knowledge of economics, the opportunity costs of pursuing money can be extremely high. Therefore, it is better to pursue money for a purpose rather than for its own sake.
People always wanted more money. Money inspired professional economists and bank robbers. Millions of people would even try to sell their souls for a reasonable sum of money. Nevertheless, the debate on whether or not money can buy happiness continues to persist. Globalization and consumerism have turned money into the main criterion of individual and professional success: the more money you earn the better person you are.
However, professional economists suggest that money does not make people happy. The current state of research claims that, despite the rapid increase in personal incomes, the percentage of people who consider themselves happy has not changed (Lee, 2005). Similar disconnects between income and happiness were found in most advanced economies, including Japan, Europe, and the United Kingdom (Lee, 2005).
However, the general inconsistency of these research results is too obvious to ignore. First, what does it mean for people to be happy? Professional economists may have profound knowledge of economic concepts but can hardly make happiness measurable. Second, can people be happy with their incomes if they always want more? Most probably, at any given point, individuals will feel dissatisfied with what they have and will try to obtain more.
I agree that money buys happiness, but this happiness is never constant. This idea is further supported by Lee (2005), who assumes that people will make all sorts of sacrifices to get money, but their happiness will be temporary at best. Lee (2005) relies on the two main premises.
First, “happiness people realize from having more income results from having more relative to others in some reference group, not from having more absolutely” (p.389). Simply stated, individuals always compare their incomes and positions to those of other individuals. They want to have more relative to what others have or can have. However, their happiness wanes as soon as others achieve a better social position, income, or level of wellbeing.
Second, the nature of sensory adaptation in humans explains why people are never happy with what they have: human receptors become irresponsive to the continuous presence of one and the same stimulus (Lee, 2005). As a result, the more money individuals earn the happier they become; however, with time, money turns into boredom and no longer brings happiness.
Obviously, it does make sense to make money, since money is the main instrument of exchange and the source of unlimited opportunities for everyone. Money opens the gateway to a broad range of material and nonmaterial values, including health and education.
We should never belittle the significance of money merely because it brings only temporary satisfaction (Lee, 2005). Yet, it is always better to pursue money for a purpose rather than for its own sake. Money for the sake of money makes little sense. Money is not the end but only the means of achieving some goal, like purchasing a new house or curing a sick child.
Moreover, a common increase in individual wealth is always a positive externality, as richer countries experience lower childbirth mortality, fewer traffic deaths, better health, and longer life expectancy (Lee, 2005). We live in society and our wealth necessarily benefits others, through taxes and charity. Therefore, it always makes sense to pursue money to improve individual and societal wellbeing.
The opportunity costs of pursuing more money can be extremely high. Opportunity costs are everywhere, as every decision necessarily involves tradeoffs. Individuals sacrifice their families and personal wellbeing to become successful, rich professionals. Others apply to illegal activities and decisions to earn their wealth. In my own life, my decision to become educated was associated with major opportunity costs. First, the costs of education impose a heavy burden of financial obligations on me.
I could use this money to meet other life goals. Second, I spend more time at work and earn more money; I lose considerable earnings each time I pursue a better grade. Third, not all courses are equally pleasant: some courses seem not to be tailored to the specific needs and demands of the student majority (Frank, 2005). I could use this time to improve my knowledge of the disciplines that are important for my future career. To a large extent, the dollar cost of education does not reflect all opportunity costs.
Yet, many students forget that higher education provides a variety of benefits that helps to decrease most, if not, opportunity costs. Statistically, college and university graduates earn $14,000 a year more compared with their non-educated counterparts (Anonymous, 2003). The social value of higher education is difficult to underestimate (Porter, 2002). Education enhances workplace productivity and stimulates professional growth. Therefore, the marginal utility of a university degree increases.
Almost all economists treat opportunity cost as the main economic concept (Frank, 2005). Every single decision is inevitably associated with one or more opportunity costs. These involve explicit and implicit costs of other opportunities (Arnold, 2008; Baumol & Blinder, 2008). Opportunity costs reflect the significance of the cost-benefit principle that governs most individual decisions (Frank, 2005). Introductory economics courses must place particular emphasis on teaching students how to weigh benefits and costs of various decisions (Frank, 2005). This knowledge of economics and economic principles will subsequently reduce the opportunity costs of education.
Whether or not money can buy happiness is a continued debate. Billions of people in all parts of the world sacrifice their ambitions and subconscious tensions on the altar of profitability and higher incomes. The current state of research claims that, despite the rapid increase in personal incomes, the percentage of people who consider themselves happy has not changed.
However, these results do not reflect the real order of things in the world. Money buys happiness, but this happiness is never constant. The more money individuals earn the happier they become; however, with time, money turns into boredom and no longer brings happiness.
Moreover, a common increase in individual wealth is always a positive externality, as richer countries experience lower childbirth mortality, fewer traffic deaths, better health, and longer life expectancy. Yet, the opportunity costs of pursuing more money can be extremely high. Every single decision is inevitably associated with one or more opportunity costs. Knowledge of economics and economic principles will subsequently reduce the opportunity costs of education.
Anonymous. (2003). Report puts dollar value on education. Georgia College & State University. Retrieved from http://www.icapp.org/pubs/education/reports03/gcsu.pdf
Arnold, R.A. (2008). Microeconomics. Boston: Cengage Learning.
Baumol, W.J. & Blinder, A.S. (2008). Microeconomics: Principles and policy. Boston: Cengage Learning.
Frank, R.H. (2005, 1 September). The opportunity cost of economics education. The New York Times. Retrieved from http://www.nytimes.com/2005/09/01/business/01scene.html
Lee, D.R. (2005). Who says money cannot buy happiness? The Independent Review, X(3), 385-400.
Porter, K. (2002). The value of a college degree. ERIC Digest. Retrieved from http://www.ericdigests.org/2003-3/value.htm