Reasons

How satisfied are you with your life?

At the end of the day – and your life – that is the question that matters. Since it is so important, let’s take a closer look. World-wide data about life satisfaction is collected by Gallup and published in the World Happiness Report. People note how satisfied they are with their life on a scale from 0 (no satisfaction) to 10 (complete satisfaction). They data are then averaged by country. By now there are over a thousand data points.

Most people put themselves somewhere in the middle of the scale. There are, of course, people completely satisfied and those completely unsatisfied, but remember, the data are averaged by country. So far, not very exciting – the data seem to prove Abraham Lincoln right who is supposed to have said that people are just about as happy as they decide to be.

However, it does get exiting when we put the data in relation to the GDP per person per year. GDP is the gross domestic product, i.e. all the economic activities within a country expressed in money terms. The data come from the World Bank and are expressed in “purchasing power equivalents (PPP)” and in “2011 international dollars”. The former – purchasing power equivalents – ensures that you can compare the GDP across countries, keeping in mind that a Big Mac costs more in Switzerland than in China. The latter – 2011 international dollars – ensures that you can compare the GDP across time by taking out inflation. The data can be downloaded from OurworldinData.org. Scroll down to their graph called “GDP per capita vs Self-reported Life Satisfaction”.

To visualize the connection, I put GDP per person per year on the horizontal x-axis, which goes from 0 to 130,000 dollars, and life satisfaction on the vertical y-axis, which goes from 0 to 9. Most of the data is between 0 and 40,000 dollars and between 3 and 7, with some more data over on the right where the really rich people live.

Even a casual look at the graph shows an upward trend from 0 to 40,000 dollars with lots of data points and a flat trend from 40,000 to 130,000 dollars with very few data points. One way to think about this is to guess that until 40,000 dollars people are more and more satisfied with their lives as GDP per person rises: it is better to be rich than to be poor. But beyond 40,000 dollars life satisfaction does not seem to keep rising with higher GDP per person – so the difference between rich and super rich does not seem to matter when it comes to a satisfied life. So, I drilled down.

I cut the horizontal axis into three segments: from 0 to 13,700 dollars – red – (that is the average GDP per person per year of all the people in the world), from 13,700 to 37,000 dollars – blue – (that is the average GDP per person per year of all the people in the rich world), and from 37,000 all the way to the right – green. I then fitted straight lines over these segments and got the graph on the left. The leftmost red line is the steepest, then, going right, comes a flatter but still rising blue one and the rightmost green line is, to my big surprise, actually falling!

As people move from absolute poverty to the world average, an increase in GDP per person really does lead to people being more satisfied with their lives. But already moving from the world average to the rich world average the fitted line becomes flatter. In fact, if you check the slopes of the two lines, the blue one is two and a half times flatter than the red one. That means that in the middle, GDP per person per year has to rise more than twice as much as on the left to give the same increase in life satisfaction. Perhaps you realize now why working ever harder to become more satisfied rings so hollow.

And when you move all the way to the right, to the falling line, you become less satisfied with your life the harder you work! Not what I expected, to say the least. So, let’s drill down even deeper.

GDP per person per year only captures part of life. The part that can be expressed by economic activity measured in money. Life satisfaction, on the other hand, captures all aspects of your life. When you are really poor, below the world average, much of your life revolves around economic activity dealing with the basic necessities of life: food, shelter, safety, health. All of which can be improved by more material goods. When you are dirt poor and starving, two potatoes are better than one! At the level of the basic necessities of life more material stuff – food, housing, energy – does lead to a significant improvement in your life. Just ask your grandparents.

However, once the basic necessities are met, having more of them is not the surest way to a satisfied life. Because other needs become the focus of your concern: sense of belonging, friendship, self-esteem all the way to self-actualization and transcendence. Maslow called that the hierarchy of needs. Take friendship: it is the deepness of the friendship that leads to satisfaction, not the mere number of friends.

The critical point is that the basic needs can generally be met by material goods, where more is better is more satisfaction. Thus, life at the bottom is material constrained. The “higher” needs – a sense of belonging, friendship, self-esteem all the way to self-actualization and transcendence – are not material constrained. Having “more” transcendence makes no sense, it is the quality, the purpose and the meaning of how these needs are being met that leads to life satisfaction. Life at the top is meaning constrained.

The paragraph above is of course not “either – or”: even when you are dirt poor, you need friendship, but the bulk of your time is spent on meeting your basic material needs. And when you are filthy rich, you still need to eat, but again, the bulk of your time is spent on your needs that give meaning to your life.

The Great Transformation

Ever since we started to be on this earth, we have spent almost all of our time in the red, material constrained, portion of the graph. We were all dirt poor. Life was short, brutish and nasty. As a result, we created a way of life, societies, agriculture, economies, politics, warfare, science, culture and morals that always favored the creation of more and more material things, because that was the surest way to increase the life satisfaction of everyone.

As we relentlessly move from the red to the blue to the green all that we built up in the past – the way of life, societies, agriculture, economy, politics, science, culture and morals – does not help us any longer to lead a satisfied life. Because they were tuned to a world in which access to, and ownership of, material goods was all that mattered. In the blue part, and especially the green part of the graph above, access to, and ownership of, material goods alone no longer guarantees a satisfied life. Because we are richer, we take them for granted. Just note how our most basic need, food, has already in the blue part become a matter of lifestyle, not survival!

In the blue and the green part life satisfaction comes, in addition to having met your basic material needs, from deep friendships, a sense of belonging, social intimacy, being able to live out your life according to who you are and being able to serve others in reaching their potential and destiny. To do that, we need fewer institutions, rules and behavior tuned to removing material constraints and more social structures, guidelines and conduct that helps us find meaning in our lives.

In the past, only kings and queens lived in the green part – they were the odd outliers. Thus, we never created the social structures, guidelines and conduct needed to lead a life of satisfaction in the blue and green part. Building them is now the task for all of us. And since a meaning constrained world differs fundamentally from the material world – remember you are less satisfied with more GDP per person! – all that we know, all our habits, all that we cherish, is of no use to us for this new task. But before you give up recall the words of Hermann Hesse in his poem Stufen that have been translated into English like this: And in every beginning there is a magic, that protects us and helps us to live.

Savor the prospect, then we invite you to learn the tools needed for the task, get inspired and begin building new futures. You won’t be alone.

It takes our planet 1.7 years to produce the resources we, that is all of humanity, use up in 1 year. If you are an average European, the ratio becomes 3 to 1 and if you are an average US American 5 to 1. You don’t have to be a math genius to realize that this cannot last.  If you spend every month 1700 dollars (or 3000 if you are European, 5000 if you are a US American) when you earn only 1000 dollars per month, the repo man will be knocking on your door much sooner than you think. Yet at the global level of all of us, we merrily and thoughtlessly continue to do so. Every day, every week, every month and every year.

For a while this may work, just as you may be drawing down your savings before the reckoning strikes. But it will strike, when all the savings are gone, and you’ve run out of friends to borrow from. Then you have become like any gambler who has run out of luck. In a sense, we are dead already, we just don’t realize it. The scary truth is, we are living on borrowed time – in the real sense of the word.

But before you give up, recall the words of Malcom Gladwell in his article for the New Yorker “The Tweaker: The real genius of Steve Jobs”: The visionary starts with a clean sheet of paper, and re-imagines the world.

Savor the prospect, then we invite you to learn the tools needed for the task, get inspired and begin building new futures. You won’t be alone.

If inventing a new way of life, if saving the planet and all the people on it feels a little too big for you to begin with, start closer to home, in your own backyard. Beyond the geographical backyard, don’t forget your social, financial, psychological and spiritual backyards. See if they need fixing – and if they do, learn the tools needed for the task, get inspired and begin building your own new personal futures. You won’t be alone.