How Much Money Do You Need to Be Happy? A New Study Gives Us Some Exact Figures

“If I gave you a million dollars, would you…?” (insert possibly life-altering risk, humiliation, or soul-selling crime here). What about ten million? 100 million? One BILLION dollars? Put another way, in the terms social scientists use these days, how much money is enough to make you happy?

If you’re Montgomery Burns, it’s at least a billion dollars, lest you be forced to suffer the torments of the Millionaire’s Camp. (“Just kill me now!”) As it tends to do, The Simpsons’ dark humor nails the insatiable greed that seems the scourge of our time, when the richest 1 percent take 82 percent of the world’s wealth, and the poorest 50 percent get nothing at all.




Hypothetical windfalls aside, the question of how much is enough is an urgent one for many people: as in, how much to feed a family, supply life’s necessities, purchase just enough leisure for some small degree of personal fulfilment?

As the misery of Monty Burns demonstrates, we have a sense of the 1% as eternally unfulfilled. He’s the wicked heir to more serious tragic figures like Charles Foster Kane and Jay Gatsby. But satire is one thing, and desire, that linchpin of the economy, is another.

“What we see on TV and what advertisers tell us we need would indicate there is no ceiling when it comes to how much money is needed for happiness,” says Purdue University psychologist Andrew T. Jebb, “but we now see there are some thresholds.” In short: money is a good thing, but there is such a thing as too much of it.

Jebb and his colleagues from Purdue and the University of Virginia addressed questions in their study “Happiness, income satiation and turning points around the world” like, “Does happiness rise indefinitely with income, or is there a point at which higher incomes no longer lead to greater wellbeing?” What they found in data from an international Gallup World Poll survey of over 1.7 million people in 164 countries varies widely across the world.

People in wealthier areas seem to require more income for happiness (or “Subjective Well Being” in the social science terminology). In many parts of the world, higher incomes, “beyond satiation”—a metric that measures how much is enough—“are associated with lower life evaluations.” The authors also note that "a recent study at the country level found a slight but significant decline in life evaluation" among very high earners "in the richest countries."

You can see the wide variance in happiness worldwide in the “Happiness” study. As Dan Kopf notes at Quartz, these research findings are consistent with those of other researchers of happiness and income, though they go into much more detail. Problems with the methodology of these studies—primarily their reliance on self-reported data—make them vulnerable to several critiques.

But, assuming they demonstrate real quantities, what, on average, do they tell us? “We found that the ideal income point," averaged out in U.S. dollars, "is $95,000 for [overall life satisfaction],” says Jebb, “and $60,000 to $75,000 for emotional well-being,” a measure of day-to-day happiness. These are, mind you, individual incomes and “would likely be higher for families,” he says.

Peter Dockrill at Science Alert summarizes some other interesting findings: “Globally, it’s cheaper for men to be satisfied with their lives ($90,000) than women ($100,000), and for people of low ($70,000) or moderate education ($85,000) than people with higher education ($115,000).”

Yes, the study, like those before it, shows that after the “satiation point,” happiness decreases, though perhaps not to Monty Burns levels of dissatisfaction. But where does this leave most of us in the new Gilded Age? Given that "satiation" in the U.S. is around $105K, with day-to-day happiness around $85K, the majority of Americans fall well below the happiness line. The median salary for U.S. workers at the end of 2017 was $44, 564, according to the Bureau of Labor Statistics. Managers and professionals averaged $64,220 and service workers around $28,000. (As you might imagine, income inequality diverged sharply along racial lines.)

And while the middle class saw a slight bump in income in the last couple years, median household income was still only $59,039 in 2016. However, we measure it the "middle class... has been declining for four decades,” admits Business Insider—“identifying with the middle class is, in part, a state of mind” rather than a state of debt-to-income ratios. (One study shows that Millennials make 20% less than Baby Boomers did at the same age.) Meanwhile, as wealth increases at the top, “the country’s bottom 20% of earners became worse off.”

This may all sound like bad news for the happiness quotient of the majority, if happiness (or Subjective Well Being) requires a certain amount of material security. Maybe one positive takeaway is that it doesn’t require nearly the amount of vast private wealth that has accumulated in the hands of a very few people. According to this research, significantly redistributing that wealth might actually make the wealthy a little happier, and less Mr. Burns-like, even as it raised happiness standards a great deal for millions of others.

Not only are higher incomes "usually accompanied by higher demands," as Jebb and his colleagues conclude—on one's time, and perhaps on one's conscience—but "additional factors" may also play a role in decreasing happiness as incomes rise, including "an increase in materialistic values, additional material aspirations that may go unfulfilled, increased social comparisons," etc. The longstanding truism about money not buying love—or fulfillment, meaning, peace of mind, what-have-you—may well just be true.

You can dig further into Andrew T. Jebb's study here: “Happiness, income satiation and turning points around the world.”

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Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness

MIT’s New Master’s Program Admits Students Without College and High School Degrees … and Helps Solve the World’s Most Pressing Problems

One of the central problems of inequality is that it perpetuates itself by nature. The inherent social capital of those born in certain places and classes grants access to even more social capital. Questions of merit can seem marginal when the credentials required by elite institutions prove inaccessible to most people. In an admirable effort to break this cycle globally, MIT is now admitting students to a graduate program in economics, without GRE scores, without letters of recommendation, and without a college degree. 

Instead students begin with something called a "MicroMasters" program, which is like “a method used in medicine… randomized control trials,” reports WBUR. This entryway removes many of the usual barriers to access by allowing students to first "take rigorous courses online for credit, and if they perform well on exams, to apply for a master’s degree program on campus"—a degree in data, economics and development policy (DEDP), which focuses on methods for reducing global inequality.

 

 

Enrollment in the online MicroMasters courses began in February of last year (the next round starts on February 6, 2018), and the DEDP master's program will start in 2019. “The world of development policy has become more and more evidence-based over the past 10-15 years,” explains MIT professor of economics Ben Olken, who co-created the program with economics professors Esther Duflo and Abhijit Banerjee. “Development practitioners need to understand not just development issues, but how to analyze them rigorously using data. This program is designed to help fill that gap.”

Duflo, co-founder of MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL), explains the innovation of MicroMasters' radically open admissions. (For anyone with access to the internet, that is, still a huge barrier for millions worldwide): “Anybody could do that. At this point, you don’t need to have gone to college. For that matter, you don’t need to have gone to high school.” Students who are accepted after their initial online course work will move into a “blended” program that combines their prior work with a semester on MIT's campus.

MicroMasters courses are priced on a sliding scale (from $100 to $1,000), according to what students can afford, and costs are nowhere near what traditional students pay—after having already paid, or taken loans, for a four-year degree, various testing regimens, admissions costs, living expenses, etc. The current program might feasibly be scaled up to include other fields in the future. Thus far, over 8,000 students in the world have enrolled in the MicroMasters program. “In total,” Duflo says, “there are 182 countries represented,” including ten percent from China, a large group from India, and “even some from the U.S.”

Students enrolled in these courses design their own evaluations of initiatives around the globe that address disparities in healthcare, education, and other areas. Co-designed by the Poverty Action Lab and the Department of Economics, MicroMasters asks students to “grapple with some of the world’s most pressing problems," including the problem of access to higher education. You can view the requirements and enroll at the MITx MicroMasters’ site. Read frequently asked questions and learn about the instructors here. And here, listen to WBUR’s short segment on this fascinating educational experiment.

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Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness

Robert Reich Makes His UC Berkeley Course on Wealth and Inequality in America Available on Facebook

Robert B. Reich served as Secretary of Labor under President Bill Clinton and was later named one of the 10 most effective cabinet secretaries of the 20th century by TIME Magazine. Nowadays, Reich teaches courses on public policy at UC Berkeley, and uses his popular Facebook page to discuss policy questions with a much broader audience. So here's the next the logical step: This semester, Reich is teaching a Berkeley course on wealth and inequality in America, and he's making the lectures themselves available on Facebook too. Watch the opening lecture above, and then check back in for new installments.

Note: Once you start playing the video, you might need to enable the audio in the lower right hand corner of the video player.

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A Short Animated Introduction to Karl Marx

Is Karl Marx’s critique of capitalism still relevant to the 21st century? Can we ever read him independently of the movements that violently seized state power in his name, claiming to represent the workers through the sole will of the Party? These are questions Marxists must confront, as must all serious defenders of capitalism, who cannot afford to ignore Marx. He understood and articulated the problems of political economy better than any theorist of his day and posed a formidable intellectual challenge to the values liberal democracies claim to espouse, and those they actually practice through economic exploitation, perpetual rent-seeking, and the alienating commodification of everything.

In his School of Life video explainer above, Alain de Botton sums up the received assessment of Communist history as “disastrously planned economies and nasty dictatorships.” “Nevertheless,” he says, we should view Marx “as a guide, whose diagnosis of capitalism’s ills helps us to navigate toward a more promising future”—the future of a “reformed” capitalism. No Marxist would ever make this argument; de Botton’s video appeals to the skeptic, new to Marx and not wholly inoculated against giving him a hearing. His ideas get boiled down to some mostly uncontroversial statements: Modern work is alienating and insecure. The rich get richer while wages fall. Such theses have attained the status of self-evident truisms.

More interesting and provocative is Marx’s (and Engels’) notion that capitalism is “bad for capitalists,” in that it produces the repressive, patriarchal dominion of the nuclear family, “fraught with tension, oppression, and resentment.” Additionally, the imposition of economic considerations into every aspect of life renders relationships artificial and forms of life sharply constrained by the demands of the labor market. Here Marx’s economic critique takes on its subtly radical feminist dimension, de Botton says, by claiming that “men and women should have the permanent option to enjoy leisure,” not simply the equal opportunity to sell their labor power for equal amounts of insecurity.

The video won’t sway staunchly anti-communist minds, but it might make some viewers curious about what exactly it was Marx had to say. Those who turn to his masterwork, Das Kapital, are likely to give up before they reach the twists and turns of the arguments de Botton outlines in broad strokes. The first and most famous volume is hard going without a guide, and you’ll find fewer better than David Harvey, Professor of Anthropology and Geography at the City University of New York’s Graduate Center.

Harvey’s Companion to Marx’s Capital has guided readers through the text for years, and his lectures on Marx have done so for students going on four decades. In the video above, see an introduction to Harvey’s lecture series on volume one of Marx’s Capital, and at our previous post, find complete videos of his full lecture series on Volumes One, Two, and part of Volume Three. Harvey doesn’t claim that a kinder, gentler capitalism can be found in Marx. But as to the question of whether Marx is still relevant to the vastly accelerated, technocratic capitalism of the present, he would unequivocally answer yes.

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Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness

How Isaac Newton Lost $3 Million Dollars in the “South Sea Bubble” of 1720: Even Geniuses Can’t Prevail Against the Machinations of the Markets

The Aristotelian notion of “man” as a “rational animal” has seen its share of detractors, from the Cynics to Bertrand Russell to nearly the whole of Poststructuralist thought. Leave it up to Oscar Wilde to compress the debate between intellect and passion into a pithy aphorism: “Man is a rational animal who always loses his temper when he is called upon to act in accordance with the dictates of reason.”

We no longer need clever verbal barbs to refute too-optimistic assessments of human behavior. Economics is catching up: we have the language of neuroscience and psychology, which consistently tells us that humans decidedly do not behave rationally very often, but are driven by bias and biology in inexplicable ways. And for over a hundred years now, we've known that the clockwork Newtonian view of the physical universe turns out be a much messier and indeterminate affair, as does the universe of the human mind.




Why, then, has so much economic theory operated with a kind of dogged Aristotelianism, insisting that the units of capitalist society, the workers, managers, investors, consumers, owners, renters, speculators, etc. behave in predictable ways? We have case after case showing that intelligence and critical reasoning often have little to do with success or failure in the market. In such cases, however, one often hears the “madness of crowds” or other cliches invoked as an explanation.

To illustrate, market reporters and business writers have seized upon the story of Isaac Newton’s spectacular rise and fall in the so-called “South Sea Bubble” of 1720. We find the story in Benjamin Graham’s 1949 classic The Intelligent Investor, a widely-read book that attributes the irrationality of market systems to an anthropomorphic entity named “Mr. Market.”

Graham writes,

Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he 'could calculate the motions of the heavenly bodies, but not the madness of the people.' Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in [2002-2003's] money. For the rest of his life, he forbade anyone to speak the words 'South Sea' in his presence.

The quotation in bold may or may not have been uttered by Newton, but the events Graham describes did indeed happen. As the Wall Street Journal’s Jason Zwieg relates, University of Minnesota professor Andrew Odlyzko found that “Newton had shifted from a prudent investor with his money spread across several securities to a speculator who had plunged essentially all of his capital into a single stock. The great scientist was chasing hot performance as desperately as a day trader in 1999 or many bitcoin buyers in 2017.” (Odlyzko estimates Newton's losses closer to $4 million.) Perhaps it was not a metaphorical “Mr. Market” who cost Newton up to 77% “on his worst purchases,” nor was it widespread “wild enthusiasm”—the mass movement of passion that Enlightenment philosophers so feared.

Perhaps it was Newton himself who, Elena Holodny writes at Business Insider, “let his emotions get the best of him, and got swayed by the irrationality of the crowd.” Maybe it's more accurate to say Newton succumbed to greed when the bubble expanded. “Throughout history,” Barbara Kollmeyer writes at Market Watch in her interview with author Richard Dale, “people—especially those at the top rung of society—have been greedy and gullible participants in financial bubbles. And Sir Isaac Newton was only human, after all.” (How many at the top rung of society fell prey to Bernie Madoff’s schemes? And a century before the South Sea Bubble, hundreds of wealthy investors lost their shirts in the Dutch Tulip Bulb craze.)

Some business writers, like investment editor Richard Evans at The Telegraph, recommend a calculable formula to avoid losing a fortune in bubbles, advice that takes rational agency for granted. Perhaps it should not. In addition to citing the contagion of crowds, nearly every discussion of Newton’s folly allows that a failure of emotional discipline played a significant role. Benjamin Graham invokes another Aristotelian notion—the idea that “character” counts as much or more than intelligence when it comes to investing. "The investor's chief problem," he writes, "and even his worst enemy—is likely to be himself."

Far fewer commenters note that the South Sea venture was itself a failure of character from its inception. The company had secured an exclusive monopoly on trade with South America; much of that trade involved selling slaves. It is also the case that the company artificially inflated its stock prices, and colluded with several MPs in insider trading schemes. The so-called “Bubble Act” of Parliament in 1720, presumably passed to prevent crashes like the one that devastated Newton, turned out to be corporate giveaway. The terms of the act had been dictated by the South Sea Company in order to prevent other companies from poaching their investors. Although these circumstances are well-known to economic historians, they rarely make their way into commentary on Newton’s great loss.

Economists instead tend to blame abstractions for economic events like the South Sea Bubble, or they blame the overreaching profit-seeking of investors, and maybe for good reason. The other explanations haunt the margins: the inherently exploitative nature of most forms of corporate capitalism, and the corruption and collusion between the state and private enterprise that inhibits fair competition and makes it impossible for investors to evaluate the situation transparently. For all of his scientific and mathematical genius, Isaac Newton was no exception—he was just as subject to irrational greed as the next investor, and to the predatory machinations of “market forces."

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Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness

What Actually Is Bitcoin? Princeton’s Free Course “Bitcoin and Currency Technologies” Provides Much-Needed Answers

"Don't Understand Bitcoin?" asked the headline of a recent video from Clickhole, the Onion's viral-media parody site. "This Man Will Mumble an Explanation at You." The inexplicable hilarity of the mumbling man and his 72-second explanation of Bitcoin contains, like all good humor, a solid truth: most of us don't understand Bitcoin, and the simplistic information we seek out, for all we grasp of it, might as well be delivered unintelligibly. A few years ago we featured a much clearer three-minute explanation of that best-known form of cryptocurrency here on Open Culture, but how to gain a deeper understanding of this technology that, in one form or another, so many of us will eventually use?

Consider joining "Bitcoin and Currency Technologies," a free course from Coursera taught by several professors from Princeton University, including computer scientist Arvind Narayanan, whose Princeton Bitcoin Textbook we featured last year. The eleven-week online course (classroom versions of whose lectures you can check out here) just began, but you can still easily join and learn the answers to questions like the following: "How does Bitcoin work? What makes Bitcoin different? How secure are your Bitcoins? How anonymous are Bitcoin users? What determines the price of Bitcoins? Can cryptocurrencies be regulated? What might the future hold?" All of those, you'll notice, have been raised more and more often in the media lately, but seldom satisfactorily addressed.

"Real understanding of the economic issues underlying the cryptocurrency is almost nonexistent," writes Nobel-winning economist Robert J. Shiller in a recent New York Times piece on Bitcoin. "It is not just that very few people really comprehend the technology behind Bitcoin. It is that no one can attach objective probabilities to the various possible outcomes of the current Bitcoin enthusiasm." Take Princeton's course, then, and you'll pull way ahead of many others interested in Bitcoin, even allowing for all the still-unknowable unknowns that have caused such thrilling and shocking fluctuations in the digital currency's eight years of existence so far. All of it has culminated in the current craze Shiller calls "a marvelous case study in ambiguity and animal spirits," and where ambiguity and animal spirits rule, a little intellectual understanding certainly never hurts.

Enroll free in "Bitcoin and Currency Technologies" here.

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Based in Seoul, Colin Marshall writes and broadcasts on cities and culture. His projects include the book The Stateless City: a Walk through 21st-Century Los Angeles and the video series The City in Cinema. Follow him on Twitter at @colinmarshall or on Facebook.

Will You Really Achieve Happiness If You Finally Win the Rat Race? Don’t Answer the Question Until You’ve Watched Steve Cutts’ New Animation

Illustrator Steve Cutts sets his latest animation, "Happiness," in a teeming urban environment, with hundreds of near identical cartoon rats standing in for human drudges in an unfulfilling, and not unfamiliar race.

Packed subway cars, a bombardment of advertising, soul-deadening office jobs, and Black Friday sales are just a few of the indignities Cutts’ rodents are subjected to, to the tune of Bizet’s "L'amour est un oiseau rebelle."

Rampant over-consumption—a major preoccupation for this artist—offers illusory relief, and a great deal of fun for viewers with the time to hit pause, to better savor the grim details.




The maximalist frames read like a gratifying perversion of Richard Scarry’s relentlessly sunny Busytown. As with Cutts' 80s-throwback Simpson’s couch gag: pop-culture references and visual input whip by at subliminal warp speed. 

They may also serve as an antidote to the sort of messaging we’re constantly on the receiving end of, whether we live in city, country or somewhere in-between. Check out the scene as Cutts pans up from the subway platform, 52 seconds in:

The panty-clad female model for Blah cologne’s fashionably black and white ad is emaciated nearly to the point of death.

“You’re better than laces” flatters the latest (laceless) shoe from a swoosh-bedecked footwear manufacturer, while a radiator-colored beverage floats above the motto “Just drink it, morons.”

Krispo Flakes fight depression with “the bits other cereals don’t want.”

Heaven help us all, there’s even a poster for TRUMP The Musical.

This freeze-frame scrutiny could make an excellent activity for any class where middle and high schoolers are encouraged to think critically about their role as consumers.

As Cutts, a one-time employee of the digital marketing agency, Isobar, who contributed to campaigns for such global giants as Coca-Cola, Google, Reebok, and Toyota, told Reverb Press in 2015:

These are things that affect us all on a fundamental level so naturally they’re a main focus for a lot of my work. Humanity has the power to be great in so many ways and yet at the same time we are fundamentally flawed. I think it’s the conflict between these two that fascinates me the most. As a race of beings we’ve made incredible achievements in such a short space, but at the same time we seem so overwhelmingly intent on destroying ourselves and everything around us. It would be very interesting to see where we’ll be in a hundred years. The term insanity is intriguing – it’s almost like we’re encouraged to act in a way that seems genuinely insane when you look at it objectively, but it’s often accepted as normal right now. I think we will have to evolve beyond our current thinking and way of doing things if we want to survive.

See more of Cutts’ animated work here. And while he doesn’t go out of his way to hype his online store, a gallery quality print of The Rat Trap would make a fantastic gift from your cubicle mate’s Secret Santa. (HURRY! TIME IS RUNNING OUT!!!)

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Ayun Halliday is an author, illustrator, theater maker and Chief Primatologist of the East Village Inky zine.  Follow her @AyunHalliday.

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