Can’t Buy Love

Since roughly the 1970s, Americans have been buying things madly, whether we could afford them or not. We were promised that a bigger car, a more trendy purse, or a flat-screen television would bring us happiness, and we’ve been acting accordingly. We were promised that an ever-growing economy would make us all rich. But while our gross domestic product increased more or less steadily from the 1970s until the onset of the current financial crisis, most of us did not see a rise in our standard of living or our well-being. Wages stagnated, while the costs of basic needs—like homes, medical care, food, and energy—climbed rapidly. Those in the top 20% increased their net worth by 80% over the last 25 years, while the bottom 40% actually lost ground.

Few families today can make it on a single wage-earner’s income, and a health problem or a job loss can send a middle-class family into poverty or even homelessness.

Yet we continue to buy the products that are supposed to make us happy, driving many of us deeply into debt. Families are carrying an average credit card debt of $5,100, with interest rates that often make payoff nearly impossible. In recent years, home equity reached record lows as people borrowed against the value of their homes. In 2004, the most recent year for which Federal Reserve figures are available, debt secured by real property exceeded $290,000 per household, almost three times what it was only 15 years before.

All this debt makes life more precarious. It also increases our dependence on long work hours, which—if we can find work at all—combines with long commutes to eat up the time we might otherwise have for things that research shows actually would make us happy.

It’s easy to fall into the trap of believing that having more stuff will lead to happiness, because there’s an element of truth in the advertisers' promises. We do need a certain amount of food to live, after all. Shelter is good. We need clothes, tools—a bit beyond the bare necessities can be nice. And having stuff has always been a way to show that you are successful and entitled to respect. But after the novelty of a new outfit or laptop wears off, we’re left with a hole in our wallets and an empty feeling, which—advertisers tell us—we should fill by shopping for yet more new and improved stuff.

Following this advice may keep the corporate economy humming, but has it made us happy?

Many figures suggest the answer is not really. Broad standards of well-being like the Genuine Progress Indicators show that our health, quality of life, economic security, and environment, taken together, stayed flat, although we worked harder. A 20-year study by the Organisation for Economic Co-operation and Development (OECD) found the United States has the highest rate of inequality and poverty among the developed countries, and the income gap has grown steadily since 2000. A recent Gallup poll found that just half of Americans live free of worries about money or health, compared to 83% of those in Denmark. When the World Health Organization and Harvard Medical School studied rates of depression in 14 countries, the United States topped the list.