Nowadays we often hear that the reason for the financial crisis in the United States is greediness. Is it possible that people have an innate desire to get rich? And does that have any connection with the right to the pursuit of happiness in the U.S. Declaration of Independence?

Research shows that in different countries, life satisfaction does not necessarily follow the growth rate of the gross domestic product, or GDP. The personal happiness indexes (based on surveys of the emotional condition or the feeling of a fulfilled life) mark a decrease after a person reaches a certain level of wellbeing. Except for the poorest, an income increase does not have a strong or a long-term positive effect on the feeling of happiness. Why, then, is the desire for wealth typical of every age and culture, as well as of people of any economic status? Economy psychologists deal with this paradox and it is the topic of a recent article by Aaron Ahuvia.*

According to Aristotle, a person's behavior is defined by a series of means and goals. Each goal is also the means to getting to the next one until the final common goal is achieved. Such a goal could be happiness itself. Following this logic, an investment banker and his client see the market and the innovative financial products merely as a faster way to achieve their objective, which has remained the same since Aristotle.

The pursuit of happiness intrigued early economists such as Adam Smith, but during the 20th century economy as a science gradually limited itself to looking at material welfare as an equivalent of happiness. Economists prefer simple intuition: when a person has the freedom to choose, he or she aims at what is best for him or her. Doesn't money-making reflect the pursuit of happiness then?

This, however, does not answer Ahuvia`s question: if after a certain moment, money stops bring happiness, how is it possible that so many people make the mistake and do not learn from their experience? Despite the appeals of many philosophers and religious leaders, the history of the human civilization gives very few examples of societies (such as monasteries) that willingly neglect material goals.

The simplest explanation would be that people are confused or that they do not have information about the weak connection between income and happiness. Or maybe people tend to overestimate the short-term benefits that money brings (a salary increase is proven to improve the mood.)

The aspiration to wealth and consumption resembles the need for food, sex, or sleep: a man deprived of these is unhappy. Yet religions usually call for austere abstention of all of these categories. Isn't the desire to get rich biologically innate? Could it be that it is not related to the pursuit of happiness but to survival in the course of evolution?

From an evolutionary standpoint, the accumulation of resources helps survival. But in the developed economies today exactly the opposite is true - a decrease in savings and even using up future savings at the expense of today's credits. Another hypothesis based on the evolution is that wealth attracts the opposite sex. The luxurious goods, cars, and clothes may be achieving just that. But do women approve of men's spending on expensive electronics or practicing expensive sports?

The evolution of man has taken place in social groups and the needs for socializing and for prestige may have become biologically inherent. Even if it brings more stress and less happiness, high income makes our social goals more easily achievable. Ahuvia also mentions a more unusual theory. The thought of money stimulates a reflex triggering activities such as trade or play, which have helped the evolution process.

*Ahuvia Aaron (2008). If money doesn't make us happy, why do we act as if it does?, Journal of Economic Psychology, 29(4), pages 491-507.

Translated with omissions. Click here to go to the original article.
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