We all search for things that make us happy. A lot of people believe that more money will definitely make us happier. But real life examples often contradict this notion. We have witnessed over and again the highly publicized destructive life-style of the rich and famous. Somehow money fails to bring them happiness. On the other hand, there is no lack of inspiration from the sheer joy demonstrated by the poor who seemingly has so little to boast about.

‘Happiness’ is both a state of mind and an emotion. One can choose to be happy even if not all of his needs are met, even the most basic ones. ‘Satisfaction,’ on the other hand, is the state of mind wherein your desires and demands are met. Life satisfaction correlates positively with one’s income position.

Diener and Diener (1995) have provided evidence that improvement in material living standards yield greater happiness, especially at low levels of per capita income. Nowadays, researchers generally agree that the relationship between material condition and subjective well-being is curvilinear: at low living standards rising income yields great gains in happiness but these gains level off as incomes continue to rise*. This is because people quickly adjust to what they have and come to regard it as normal. The desire to strive for more never ends.

The rapid economic growth China enjoyed over the 1990-2000 decade tells a puzzling and yet compelling story. Happiness in China plummeted in every income group despite massive improvement in material living standard. This finding contradicts the above theory that income growth at low living standards leads to gains, not losses, in happiness. So what happened?

The research study conducted by Kike Brockmann and his colleagues indicated the following three reasons:
1. Anomie. Rapid social changes easily overwhelm people’s mental capacities as result in disorientation, depression, and anomic attitudes that lead to a diminution of overall happiness.

2. Political Disaffection. Frey and Kirchassner (2002) find that people tend to be happier when living in a democratic environment. Veenhoven (2000) claims that political freedom is more important in wealthier nations than in poorer nations, whereas economic freedom has a stronger effect on wellbeing in poor countries than in wealthy ones. Thus, the continuing denial of democracy in China may contribute to a widespread disaffection from the system, causing a decrease in people’s life satisfaction*.

Brockmann and his colleagues pointed out another source of growing political dissatisfaction might be the decline of effective and trustworthy governance. Corruption and the absence of rule of law are associated with life satisfaction at the national level.

3. Relative Deprivation. This term refers to a situation in which people perceive themselves to be disadvantaged in relation to others. Although people tend to be happier if they think they outclass others, negative experiences seem to be more salient than positive ones: relative disadvantage makes people unhappier than relative advantage makes them happy**.

In China income inequality becomes increasingly skewed towards the upper income groups. As a result, the proportion of the population falling below the country’s means income becomes bigger, worsening most people’s relative position despite absolute gains. It seems that happiness might carry a strong relative component, supported by Easterlin’s (1974) claim that a generalized augmentation in income will not increase happiness in a given population, simply because one’s relative income – relative to fellow citizens – does not improve. After all, what makes people unhappy isn’t having little but having less than others.

Have you ever felt extremely happy after getting a big raise, but only to find out that your colleague was awarded with a bigger increase? Your bliss immediately turned into resentment or anger or depression.

It is clear that money alone doesn’t make you happier. Once your basic needs are well taken care of, continuous pursuit of money will be like a dog chasing its tail. To be happy, one has to find himself first and know who he is and what he wants to be. Then he will be able to discover the things that really matter to him and which would give him satisfaction.

Positive psychologists state that there are three kinds of happiness:
• Pleasure, which is a positive sensory experience (e.g. food, a good massage)
• Engagement, which can involve one’s family, work, hobbies, and romance.
• Meaning, which is the use of one’s strength to serve a purpose in life (e.g. charity work, religious involvement)

Today many Americans are putting in ridiculous number of hours into their jobs for fear of losing their only source of income. Many are one paycheck away from being homeless. Even though one can choose to be happy and positive when the overall environment is harsh, unsafe and unstable, his life satisfaction must be declining.

I am encouraged by what Obama said in his second Inaugural speech that the promise of equality laid out in the Declaration of Independence could not be fulfilled until “our wives, our mothers, and daughters can earn a living equal to their efforts” and “Our country cannot succeed when a shrinking few do very well and a growing many barely make it… We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class.”

When striving for individual happiness, we need to be mindful of the society we live in. Because civic sense, social equality, and control over our own lives constitute the magic triangle of well-being in society.

*The China Puzzle: Falling Happiness in a Rising Economy by Hike Brockmann, Jan Delhey, Christian Welzel, Hao Yuan
**Delhey and Kohler 2006; Surowiecki 2004