Happiness is a subjective term. Its meaning varies from person to person. However, there are some causes and aspects of happiness which psychologists have identified as universal. When considering whether money can buy happiness, one must think about the effects money has on an individual and on the community level, as well as the other causes of happiness. Only after considering all the aspects of the issue, one will realise that money can, to some extent, create conditions that promote happiness, but it cannot buy happiness in the absolute meaning of the term.
On individual level, rich people are generally perceived as happier people in comparison to poor. After all, rich individuals not only can satisfy their needs but also can fulfill other desires. They can afford lavish cars, larger houses and can enjoy more luxurious lifestyles. On the contrary, poor people who find it difficult to satisfy even their fundamental needs such as those of food and shelter are thought of as less happy individuals: this is true to some extent. These facts prove that a rich person, in any country, is supposed to have more control over a happy life than a poor one. On the larger level, countries with higher values of Gross Domestic Product (GDP) can provide better facilities for their citizens, in terms of infrastructure and merit goods. The average proportion of the population living below the poverty line in these countries is generally less and people have a higher standard of living.
The above-mentioned perceptions, however, are not entirely accurate. A famous economist, Richard Easterlin, proposed a theory which came to be known as Easterlin’s Paradox. He talked about how, at any given point in time, richer individuals tend to be happier than poorer ones, but as the economy progresses, the overall level of happiness remains the same. This shows that there are certain negative consequences of wealth as well. When people earn more, their expectations increase. They crave for more; strive for getting better cars and more luxurious houses; and become ostentatious. The Human Law of Non-Satiation refers to exactly the same phenomenon. So money, in fact, gives them temporary happiness, but also inculcates in them the desire for more. Although it is true that poorer people find it difficult to fulfill their needs, they are free from the evils associated with money.
There are also other causes of happiness. These have been mentioned in the outcome documents of the High Level Meeting on Wellbeing and Happiness, as well as the World Happiness Report of 2012. These include social capital and natural capital. Social capital refers to the level of social relations people have. More social capital means that people have many family members and friends they can rely on. Natural capital means the scenery and natural beauty people have in their country. These have been proven to be factors that influence happiness levels more than money. This can be illustrated through the example of Bhutan.
Bhutan is a landlocked country in Asia, which is underdeveloped but the people there are amongst the happiest in the world. At first sight, this may seem unlikely. However, this is the case because the Bhutanese have focused on developing social and natural capital. There are close-knit communities there and lots of greenery. The Bhutanese have discovered the true secret of happiness and they even measure happiness, using the Gross National Happiness indicators.
So, it can be seen that money can temporarily create conditions in which people are happy but it cannot bring about happiness in the long-run. This is exactly why countries other than Bhutan are looking favourably upon indicators of Gross National Happiness. Economists are also working on a New Development Paradigm - one that focuses less on economic growth and more on happiness.–Nausherwan Ahmed Aamir