Will Our Kids Be Better Off Than We Are?
The next generation will have plenty of gadgets when it grows up, but will it be happier? We need to measure that more carefully.
Daniel Altman is Big Think's Chief Economist and an adjunct faculty member at New York University's Stern School of Business. Daniel wrote economic commentary for The Economist, The New York Times, and The International Herald Tribune before founding North Yard Economics, a non-profit consulting firm serving developing countries, in 2008. In between, he served as an economic advisor in the British government and wrote four books, most recently Outrageous Fortunes: The Twelve Surprising Trends That Will Reshape the Global Economy.
One of the bedrock principles of the American economy is that each generation should be better off than the one before. In terms of material living standards, the nation has done a pretty good job of fulfilling this promise. But the ability to consume goods and services may not be what matters most.
Martin Feldstein, who was once one of my academic advisors, has written a column this week about the question of living standards. He points to likely increases in gross domestic product (GDP) per capita as evidence of rising living standards. He also says that these increases don’t capture all the improvements in the quality and range of products that are sure to come our way.
I think Feldstein is right that material living standards are rising faster than traditional measurements might reflect. (He doesn’t mention whether all Americans will enjoy the higher living standards to the same degree.) Yet material living standards, however we measure them, don’t always correlate with utility – the feeling of satisfaction, happiness, or general well-being that is at the core of all economics.
As any economist knows, material living standards are only useful if they translate into greater happiness. Betsey Stevenson and Justin Wolfers have shown that higher incomes are associated with greater well-being, at least up to about $125,000 in household income. But at least two poorer countries – Costa Rica and Mexico – are also happier, on average, than the United States. Moreover, happiness in the United States seems to have declined between 2005 and 2012, despite increases in per capita GDP.
I doubt that the average happiness of Americans at this moment is very different from their average happiness in the 1950s. At least one study suggests that happiness declined very slightly from 1946 to 1980 and then rose very slightly from 1980 to 2006. Either way, the differences were very small, though material living standards grew throughout the entire period.
So are Americans better off at all than they were decades ago? In one way, yes. Feldstein and I find common ground in the potential for new products to enhance longevity. Utility adds up over time, so living longer opens the doors to higher lifetime levels of utility. And there’s little doubt that life expectancy in the United States is increasing over time and will continue to do so for the foreseeable future.
The longevity argument belongs to a more general point about distinguishing between new products that help and products that hurt. Consider pharmaceuticals: the statins that reduce heart attacks are helping many people to live longer, but the synthetic opioids that entangle thousands of Americans in addiction and crime may, on balance, be hurting us.
These distinctions can be tough to draw, though, given all the potential pluses and minuses of each new product. We like our mobile phones, but they eat up time we could have spent playing with our kids or getting exercise outside. The next generation will have plenty of gadgets when it grows up, but will it be happier? We need to measure that more carefully, too.
Image courtesy of Shutterstock
The famed author headed to the pond thanks to Indian philosophy.
- The famed author was heavily influenced by Indian literature, informing his decision to self-exile on Walden Pond.
- He was introduced to these texts by his good friend's father, William Emerson.
- Yoga philosophy was in America a century before any physical practices were introduced.
Pfizer's partnerships strengthen their ability to deliver vaccines in developing countries.
- Community healthcare workers face many challenges in their work, including often traveling far distances to see their clients
- Pfizer is helping to drive the UN's sustainable development goals through partnerships.
- Pfizer partnered with AMP and the World Health Organization to develop a training program for healthcare workers.
A little goes a long way.
- A recent study from the Department of Health and Human Services found that 80 percent of Americans don't exercise enough.
- Small breaks from work add up, causing experts to recommend short doses of movement rather than waiting to do longer workouts.
- Rethinking what exercise is can help you frame how you move throughout your day.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.