Many critics of economic growth interpret this finding to imply that continued economic growth should no longer be a policy goal in developed countries. They argue that if money buys happiness, it is relative, not absolute, income that matters. As incomes grow, people quickly adapt to their new circumstances, showing no enduring gains in measured happiness. Growth makes the poor happier in low-income countries, critics concede, but not in developed countries, where those at the bottom continue to experience relative deprivation.
Subjective well-being is typically measured from responses to survey questions like, “All things considered, how satisfied are you with your life these days?” People’s responses are informative. They tend to be consistent over time and are highly correlated with assessments of them made by their friends. Positive self-assessments are strongly linked with behaviors indicating psychological health. Thus, people who report high levels of subjective well-being are more likely to initiate social contacts with friends and more likely to respond to requests for assistance from strangers. They are less likely than others to suffer from psychosomatic illnesses, seek psychological counseling or attempt suicide.
In short, self-assessments of subjective well-being tell us something important about human welfare. Yet the mere fact that they do not ratchet up over time provides little reason to question the desirability of economic growth.
The purpose of the human motivational system, according to psychologists, is not to make people feel happy, but rather to motivate actions that promote successful life outcomes. To be effective, this system should be flexible and adaptive, which it is. For example, people who become disabled typically experience deep depression after their accidents, but often adapt surprisingly quickly, soon reporting a mix of moods similar to what they had experienced before. Lottery winners invariably experience joy on receiving their windfalls, but often describe such feelings as fleeting.
Since life is a continuing competitive struggle, this is as it should be. Accident victims who can recover their psychological footing quickly will function more effectively in their new circumstances than those who dwell unhappily on their misfortune. Windfall recipients who quickly recover their hunger for more will compete more effectively than those who linger in complacent euphoria.
A Holocaust survivor once told me that his existence in the camps took place in two separate psychological spaces. In one, he was acutely aware of the unspeakable horror of his situation. But in the other, life seemed eerily normal. In this second space, each day presented challenges, and days in which he coped relatively successfully with them felt much like the good days of the past. To survive, he explained, it was critical to spend as much time as possible in the second space and as little as possible in the first.
These observations highlight the weakness of subjective well-being as a metric of welfare. The fact that people adapt quickly to new circumstances, good or bad, is just a design feature of the brain’s motivational system. The fact that a paraplegic may continue to be happy does not imply that his condition has not reduced his welfare.
Indeed, many well-adjusted paraplegics report that they would undergo surgery entailing substantial risk of death if doing so promised to restore their mobility. Similarly, the fact that people may adapt quickly to higher incomes says nothing about whether economic growth makes them better off.
...my personal reflections are only in partial agreement with the literature on well being (see also Levav 2002). In terms of agreement with adaptation, I find myself to be relatively happy in day-to-day life – beyond the level predicted (by others as well as by myself) for someone with this type of injury. Mostly, this relative happiness can be attributed to the human flexibility of finding activities and outlets that can be experienced and finding in these, fulfillment, interest, and satisfaction. For example, I found a profession that provides me with a wide-ranging flexibility in my daily life, reducing the adverse effects of my limitations on my ability. Being able to find happiness in new ways and to adjust one’s dreams and aspirations to a new direction is clearly an important human ability that muffles the hardship of wrong turns in life circumstances. It is possible that individuals who are injured at later stages of their lives, when they are more set in terms of their goals, have a more difficult time adjusting to such life-changing events.
However, these reflections also point to substantial disagreements with the current literature on well-being. For example, there is no way that I can convince myself that I am as happy as I would have been without the injury. There is not a day in which I do not feel pain, or realize the disadvantages in my situation. Despite this daily awareness, if I had participated in a study on well-being and had been asked to rate my daily happiness on a scale from 0 (not at all happy) to 100 (extremely happy), I would have probably provided a high number, probably as high as I would have given if I had not had this injury. Yet, such high ratings of daily happiness would have been high only relative to the top of my privately defined scale, which has been adjusted downward to accommodate the new circumstances and possibilities (Grice 1975). Thus, while it is possible to show that ratings of happiness are not influenced much based on large life events, it is not clear that this measure reflects similar affective states.
As a mental experiment, imagine yourself in the following situation. How you would rate your overall life satisfaction a few years after you had sustained a serious injury. How would your ratings reflect the impact of these new circumstances? Now imagine that you had a choice to make whether you would want this injury. Imagine further that you were asked how much you would have paid not to have this injury. I propose that in such cases, the ratings of overall satisfaction would not be substantially influenced by the injury, while the choice and willingness to pay would be - and to a very large degree. Thus, while I believe that there is some adaptation and adjustment to new life circumstances, I also believe that the extent to which such adjustments can be seen as reflecting true adaptation (such as in the physiological sense of adaptation to light for example) is overstated. Happiness can be found in many places, and individuals cannot always predict their ability to do so. Yet, this should not undermine our understanding of horrific life events, or reduce our effort to eliminate them.