Chapter 24: Money And Happiness

“The wealth required by nature is limited and is easy to procure; but the wealth required by vain ideals extends to infinity.”

Vatican Saying 8

Since antiquity, the issue of what makes us happy has been of primary importance. Some found an answer in external circumstances, suggesting that wealth and materials are all one needs to be happy. Others discovered a resolution to spirituality alone, supporting that happiness is the outcome of a mental process and therefore is a matter of internal transformation as exemplified in sacred texts of the religions of the world.

Besides, certain philosophical schools of antiquity emphasized that material possessions are indifferent, asserting that “virtue is sufficient for happiness.” Psychologists nowadays claim that research findings show both materialistic and spiritualistic positions to be true, with the latter having a stronger effect on happiness.


Epicurus on Money and Happiness

Epicurus is the ancient champion of wise hedonism. He encourages the pursuit of real happiness, namely happiness which takes into account both pleasure and pain. What matters in living happily is not the absolute level of pleasure and pain but their difference, namely pure pleasure. Therefore, to make a decision on satisfying a desire, one needs the virtue of practical reason to make truthful calculations of the costs (pain) and benefits (pleasure) involved in the realization of the desire.

In addition to assisting us in making trustworthy evaluations and decisions, prudence cultivates over time another virtue—self-discipline. It is one thing to come up with the right evaluation and decision and another to go through the implementation of it, overlooking the alternative choices, especially when prudence may opt to defer immediate gratification to avoid a greater pain later.

Happiness, for Epicurus, is not only the fleeting joyful feeling, but also the long-lasting pleasant state of mind. This steady feeling of pleasure is called katastematic pleasure. It has an organic presence in our minds, shaped by the inherited features and experiences of our lives. The more pleasant our experiences, the stronger their positive traces on the makeup of the emotional structure of our minds.

The purpose of maximizing the pure pleasure in our lives is not accomplished by fulfilling our every desire; there are constraints, either internal or external, that limit how many of them we can fulfill and to what extent. The external constraint is the social environment. The internal constraints are our physical capacities and financial resources. The latter is not a good, per se, but a means of acquiring goods.

Most of our desires have a financial dimension; therefore, one must take into account his finances prior to deciding to satisfy a desire. How far can one go in satisfying his desires? A simple rule is this: as long as the emotional pain involved in the acquisition of the finances to fulfill the additional desire is less than the expected pleasure resulting from the satisfaction of it. If the pain exceeds the expected pleasure, we should put the desire off.

Does this process have an upper limit? It seems that it does. Indeed, the relation between wealth and pleasure goes hand in hand up to point; however, beyond that, the more one gets, the worse he feels. The cost of earning more revenue increases exponentially due to physical limitations, since, physically and mentally, we can work productively for certain hours; beyond a time threshold we get easily exhausted and become less productive.

Besides, the opportunity cost makes things worse, for as long as, by working long hours, one has to neglect other sources of pleasure (for instance, spending time with loved ones and friends or enjoying his hobbies). For that reason, Epicurus claims that the acquisition of great wealth bears a heavy cost, because “a life of freedom cannot amass great wealth.”1 In addition, “the soul neither rids itself of disturbance nor gains a worthwhile joy through the possession of greatest wealth, nor by the honor and admiration bestowed by the crowd, or through any of the other things sought by unlimited desire.”2

Epicurus claims that the guide to the fulfillment of our desires is nature. This denotes that we are happy as long as we gratify our basic needs. Contrary to “wants,” “needs” are not conditional upon our circumstances. Needs are imperative demands for human functioning that do not adapt to any and all conditions; in fact, they signify the limits of human flexibility. Nature is the moral teacher who shows that the needs of the body are but a few: “The cry of the flesh is not to hunger, not to thirst, not to suffer cold, because, possessing these and expecting to possess them, a man may vie with Zeus himself.”3

Therefore, “he who has learned the limits of life knows that that which removes the pain due to want and makes the whole of life complete is easy to obtain, so that there is no need of actions which involve competition.”3a What nature is unable to satisfy are the corrupt demands of culture: “We must also reflect that of desires some are natural, others are groundless.”4 Again, a saying declares: “The wealth required by nature is limited and is easy to procure; but the wealth required by vain ideals extends to infinity.”5

We see here an Epicurean distinction between wealth that is “natural”—corresponding to the satisfaction of natural desires—and wealth that is “empty”—corresponding to the boundless vain desires for riches. “If you shape your life according to nature, you will never be poor; if you do so according to opinion, you will never be rich. For nature’s wants are small; the demands of opinion are boundless.”6

Epicurus firmly denounced materialism, writing, “We regard independence of outward things as a great good … so as to be contented with little if we have not much, being honestly persuaded that they have the sweetest enjoyment of luxury who stand least in need of it.”7

The limited desires of nature allow one to combine the pleasant life with philosophy and work: “At one and the same time we must philosophize, laugh, and manage our household and other business, while never ceasing to proclaim the words of true philosophy.”8

Unquestionably, nature freely provides some of the necessities of life, but there are some necessities which must be addressed through financial resources. Indeed, there exists a minimum threshold of wealth for someone to provide himself with the necessities for food, shelter, and safety: “Frugality too has a limit, and the man who disregards it is like him who errs through excess.”9

Epicurus and his friends lived a pleasant life with limited financial means. Their revenues from tuition fees and selling books were barely adequate to support their lives, and at times, the help of friends was welcomed: “Send me a pot of cheese, so that I may be able to indulge myself whenever I wish.”10

Some opposing philosophers11 interpreted the philosophy of Epicurus as suggesting an austere kind of ascetic life, whereas the truth is that Epicurus adapted his philosophy to the real-life conditions of his era. Evidence that his philosophy can also be successful in prosperity is the example of the Epicurean philosopher Philodemus, who lived in affluence at Piso’s Villa of the Papyri at Herculaneum.

In general, a flexibility of desires is a fundamental skill in the application of the Epicurean philosophy, since it allows one to live happily both under adverse financial circumstances and prosperity.

Epicurus holds that chasing after wealth and material goods owes to the influence of society. He suggests that we are born as healthy living creatures, but shortly after birth, the social environment takes hold of us and corrupts our natural inclinations through public teaching and religious superstitions.

In this way, we are not really us; our inherent desires have been reshaped by society’s wrong beliefs, teaching us not to be satisfied with what is easy to get but to long for things that are difficult to secure (luxuries) or without any definite limit (wealth). Under the influence of these beliefs, people strive for wealth and material possessions, regardless of the consequences. The only escape from the treadmill of wealth accumulation is the understanding that wealth and material goods are a means, bearing no intrinsic value. Luckily, the cancellation of the belief will completely eliminate the desire, and therefore will free people from worry.12

Lucretius on Money and Happiness

Lucretius provides his account of wealth and happiness. Describing the evolution of human life, he ascribes the transformation of human natural inclinations by prompting the ambition and succumbing the physical virtues to the power of wealth: “For the most part, however strong men are born, however beautiful their body, they follow the lead altered of the richer man.”

Yet, for humans who steer their lives by truth, “it is great riches to a man to live thriftily with calm mind; for never can he lack for a little.” However, for men who wish to live a peaceful life by resting on the sure foundations of wealth, fame, and power, “all in vain, since struggling to rise to the heights of honor, they made the path of their journey beset with danger.”13

Lucretius makes a step forward by affiliating the greedy store of wealth and power with the fear of death: “These sores in life are fostered in no small degree by the fear of death.” In their effort to escape it, “they amass substance by civil bloodshed and greedily multiply their riches, heaping slaughter on slaughter.”14

He adds: “These acts, assails their honor, being the cause of many criminal actions, splits between families, zealously of others, bursts the bonds of friendship, disloyalties of civic duty.” Furthermore, considering that the anticipated protection is never obtained, one exaggerates his desires to acquire more and oftentimes envies those who possess them and may harm those whom he perceives as impediments to his realization of a practically unreachable goal.

Philodemus on Money and Happiness

Philodemus provides a detailed description of wise wealth management.15 He says that a calm and happy life is accomplished not by escaping all toils and efforts, but by pursuing things that may require a certain amount of pain in the moment but offer deliverance from more troubles in the future. Wealth is such a thing, as are health and friendship.

Although its hold and management surely require thought and labor, it is better to have it than not, for possession of it enables one to live pleasantly, whereas its lack is accountable for hardship and distress. He says one “feels more inclined by his will toward a more affluent way of living”16 and, therefore, “as to greater wealth, if it comes (in a harmless and easy manner), then it is to be welcomed.”17

Whereas Philodemus does not go into detail as to how much money and possessions are optimal for the philosophical life, he is certainly not implying the more wealth, the better. Distinctly, Philodemus claims that the philosopher manager should not act in the way of traditional property management of wealth maximization but should develop some kind of emotional coolness with regard to his gains and losses18 based on the true beliefs about the nature of our desires. He accurately assumes that “there are within us natural (desires) for more goods,” but he is also assured that wealth has no intrinsic value and that a little of it is enough to live happily.

In managing his property, the philosopher is considerate of the needs of his fellow Epicureans and may distribute some of his wealth to his friends. In particular, the philosopher property manager is distinguished by his goodwill, altruism, and gratitude, his generosity and philanthropy, and his ongoing appreciation of the value of friendship.

Philodemus suggests that the sound administration of wealth is not only suitable for having friends, but that it is partly shaped by their presence or absence. “That the wise man administers these goods in such a manner is a consequence of the fact that he has acquired and continues to acquire friends.”19

The Epicurean property manager delivers money carefully and in symmetry to his income20 without, however, behaving like a miser. He is flexible on the amounts that he spends monthly or yearly, as well as on the ways in which he allocates his income to different things,21 because he at times may wish to spend much more than usual on his friends or when the circumstances arise.22 When he needs to cut back his expenses, he makes sure that the cuts are not overdone and that they fundamentally affect him rather than his friends.23

Moreover, the commands of friendship define the degree to which he has to save and make preparation for the future. “If one has friends, one should save more in order that they may have (means of maintaining themselves) even after one’s death, and one should regard them as one’s children.”24 Commonly, the philosopher behaves “like those who sow seeds in the earth.”25 What he spends on his friends constitutes a more profitable acquisition than lands26 and allows him to draw many times more fruits in the future.27 In that sense, caring for one’s friends entails providing for one’s own future.28

His behavior toward his subordinates is characterized by kindness of character, compassion, understanding, benevolence, and honesty.29 Finally, the philosopher manager has a balanced lifestyle, self-control in the pursuit of physical pleasure, humility, courage in enduring pain, and fairness. He does not fear the gods or death, and he is not hurt by the evils arising from such fears.

In sharp opposition, the traditional property manager strives to have as many earnings and as few losses as possible and expand his property to the greatest degree. He exhibits such an obsession for more that he is prepared to endure great troubles and heavy work for their sake. Because of his obsession with maximizing his wealth, he is very much distressed about his losses and is exhilarated about his gains.30

This view makes him emotionally vulnerable to changes in the circumstances; he is often overwhelmed by destructive emotions and pessimism about the future. These feelings are amplified by the fact that the traditional manager has no true friends since he views friends as barriers to his main goal—the maximization of his property.31

Also, he is insensitive to the needs of society and to the pains of other human beings. He is alienated from other people32 and has no reservations about forcing his subordinates to work hard in risky conditions.33 He enjoys making money from renowned sources regardless of the toil and trouble they may involve for himself or for others.

In contrast, the Epicurean manager will neither sweat over the preservation of his wealth34 nor strive to store large amounts of it because these commonly fail to pass the pleasure calculus. And yet he’s not scared of getting poor.35 Instead of struggling to increase his revenues, he prefers to reform his desires. Philodemus claims that people are usually mistaken in their hedonic calculations because they disregard that the struggle to earn things beyond the necessary, such as illustrious reputations, overabundant wealth, and such luxuries, ends in more pain than pleasure.

To put it another way, it is not wealth itself that is to be shunned as an evil but the pain to possess it that inevitably leads to violating the pleasure calculus, leading to a worrisome life, hard labor, stress, fear, and personal and social loneliness. “The toil involved in acquiring wealth involves dragging oneself by force and agonizing over losses that will quickly result in pains, either present or expected.”36

On the contrary, the Epicurean property manager may not accumulate as much wealth as the expert manager, but his sensitivity to values such as altruism, philanthropy, and friendship are psychologically helpful and morally rewarding. The Epicurean philosopher manager will never aspire or dedicate energy to becoming an expert in property management but will always manage his fortune in such a way so as to live happily with his friends.

Philodemus, unexpectedly, apart from blaming the aggressive pursuit of wealth through military service37 and political office,38 in the same way rejects agricultural profession39 for the sage manager because of the hard work40 it demands and the requirement to work until old age.41 Also, the sage manager of wealth is characterized by foresight, which means that he plans in advance.42

Seneca on Epicurus’s Views about Money and Happiness

Seneca gives an excellent exposition of Epicurus’s account of wealth, saying that nature’s wants are slight, but the demands of opinion are boundless. He quotes Epicurus, claiming, “If you live according to nature, you will never be poor; if you live according to opinion, you will never be rich.” 43

Assume, he explains, “that the property of many millionaires is heaped up in your possession. Assume that fortune carries you far beyond the limits of a private income, decks you with gold, clothes you in purple, and brings you to such a degree of luxury and wealth that you can bury the earth under your marble floors; that you may not only possess but tread upon riches.

Add statues, paintings, and whatever art has been devised for luxury; you will only learn from such things to crave still greater ones. Natural desires are limited, but those that spring from false opinion have no stopping point. The false has no limits. When you are traveling on a road, there must be an end, but when astray, your wanderings are limitless.

Recall your steps, therefore, from idle things, and when you know whether that which you seek is based upon a natural or upon a misleading desire, consider whether it can stop at any definite point. If you find, after having traveled far, that there is a more distant goal always in view, you may be sure that this condition is contrary to nature.”

Elsewhere, Seneca, quoting Epicurus says: “The acquisition of riches has been for many men, not an end, but a change, of troubles.” Explaining the quote, Seneca adds, “For the fault is not in the wealth but in the mind itself. That which had made poverty a burden to us has made riches also a burden. Just as it matters little whether you lay a sick man on a wooden or on a golden bed, for whithersoever he be moved he will carry his malady with him; so one need not care whether the diseased mind is bestowed upon riches or upon poverty. His malady goes with the man.”


Aristotle on Money and Eudaemonia

Aristotle’s view of happiness rests on the primary concept of his philosophy, which is known as teleology. Aristotle thought that the best way to explain why things are the way they are is to know what purpose (telos) they were intended to serve by nature.

Aristotle’s stress on teleology assumes that there is a reason for everything. Just as there are purposes in all living beings prescribed by their physical properties (essences), human life is designed and steered by the individual’s physical properties toward a final end as well.

Taking into account that, as opposed to other living beings, the distinctive feature of human beings is reason (rationality) and the ideal function of a human being is the fullest or most perfect exercise of reason, for Aristotle, well-being (eudaemonia) involves activity, exhibiting virtue (excellence) in accordance with reason.

However, in Aristotle’s view, rationality and virtue are necessary but not sufficient for eudaemonia. Notwithstanding the fact that rationality is the most important component of well-being, there are other “goods” also intrinsic to eudaemonia, such as friends, autonomy, wealth, and power.

He doubts whether one can be eudaemon if he lacks certain external goods such as “good birth, good children, and beauty.”44 So, a person who is hideously ugly or has “lost children or good friends through death”45 or who is isolated is unlikely to be eudaemon. In this way, chance can prevent the attainment of eudaemonia.

The virtuous person takes pleasure in carrying out the proper thing as a consequence of the sound foundation of moral and intellectual character.46 In other words, Aristotle makes the strong assumption that pleasure is the natural outcome of the functions of the human essence, namely reason.

Therefore, guided by reason, one does the things he enjoys so that success is always accompanied by happiness. In this line of thought, there is no room for someone to pursue pleasure since pleasure is the by-product of virtuous activity. It does not enter at all into the constituents of eudaemonia.

Aristotle does not even think that we essentially look for eudaemonia. Rather, eudaemonia is what we achieve when we live according to the requirements of reason, assuming that we have some external goods and aren’t particularly unfortunate.

Aristotle supports that a reasonable amount of wealth is an intrinsic component to pursuing the good life. Well-being is inseparable from having a certain level of wealth so as to efficiently manage a household.47 For Aristotle, there is a minimum amount of wealth needed to evade a life of toil, and there is a maximum amount of wealth above which eudaemonia cannot be realized.48

He also explains that household management “aims at something more than the satisfaction of material wants: its object is also to preserve, as far as possible, the household’s friendship, the common bond, and purpose of its free members, against the intrusions of constraint and necessity which are an essential part of the reproduction of human livelihood.”49

Furthermore, Aristotle maintains that there is a natural limit in wealth acquisition compatible with the good life, meaning that true wealth is “having enough” useful objects of wealth for household management: “No bound to riches has been fixed for man. But there is a boundary fixed, just as there is in the other arts; for the instruments of any art are never unlimited, either in number or size, and riches may be defined as a number of instruments to be used in household or in a state.”50

He then states that unlimited wealth accumulation is inconsistent with the good life: “Some persons are led to believe that getting wealth is the object of household management, and the whole idea of their lives is that they ought either to increase their money without limit or at any rate not to lose it. The origin of this disposition in men is that they are intent upon living only, and not upon living well.”51

For Aristotle, unlimited moneymaking is suitable to the life of pleasure, not the good life: “Those who do aim at a good life seek the means of obtaining bodily pleasures; and, since the enjoyment of these appears to depend on property, they are absorbed in getting wealth: and so there arises the second species of wealth-getting. For, as their enjoyment is in excess, they seek an art that produces the excess of enjoyment.”52

Aristotle adds that for humans to pursue a life of pleasure is to endure a senseless life, one that is ready (comparable) to “grazing cattle.”53 One reason that wealth accumulation is a barrier to eudaemonia is the time constraints, for the effort to get more money crowds out other necessary goods for human flourishing, including friendship, autonomy, and even leisure.

He explains that leisure is better than, and is the end of, occupation, which is always followed by effort. Unlike the “busy man” who does not have any leisure, those who have it derive pleasure.


With regard to happiness, Aristotle and Epicurus differ fundamentally in their assumptions about the truthfulness or falsehood of one’s moral beliefs. On one hand, Aristotle supposes that one’s beliefs are largely healthy,54 and therefore feeling good is the natural side effect of thinking rationally. There is no reason for one to concern himself with his feelings as long as he thinks and does right. Any discrepancies between thinking right and feeling good owes to a deficiency in the thinking, a problem that can be fixed through rational examination. Moreover, since one’s beliefs are predominantly socially formed, then Aristotle also presumes that the surrounding society is also healthy.

On the other hand, Epicurus rejects the assumption about the soundness of social beliefs and the corresponding healthy beliefs of the individual. On the contrary, he sees that they are principally corrupt. Therefore, Epicurus argues, the problem, by far, is not in the way one thinks, but in the belief that gives rise to the thought.

The therapy of a hurting feeling, he concludes, lies rather in the therapy of the belief than that of the thinking process. In short, happiness and eudaemonia coincide only when the social and individual beliefs are healthy. Otherwise, the right thinking deviates from the good feeling.


The pursuit of happiness as the primary subject of philosophical inquiry reappeared in the Enlightenment through John Locke. Inspired by Epicurus, he reaffirmed the Epicurean view about what constitutes happiness. His understanding of the human condition was summarized in his well-known observation, “That we call Good which is apt to cause or increase pleasure or diminish pain,”55 whereas evil is the opposite—it is what creates or aggravates pain and lessens pleasure.

The utilitarian philosophers who followed Locke envisaged pleasure as a social good, suggesting public policies that would promote a happy life for the greatest number56 of people. This same concept was fostered later in the Declaration of Independence of the United States, where the idea that promoting the pursuit of happiness should be one of the duties of a just government.

The technological developments of the eighteenth and nineteenth centuries brought about an explosion in the production and distribution of manufacturing goods, economic prosperity, and a radical change in the way people and governments viewed the happy life. People’s income improved, and material possessions made their lives more comfortable and happier.

Naturally, they assumed that greater pleasure and happiness would arise from higher economic prosperity and ownership of material goods; thus, the new philosophy of materialism emerged as the dominant popular avenue to a happy life. Ever since, people have dedicated their most valuable human resources, time, energy, and finances to living the “good life” through the possession of material goods.

However, in spite of their professional successes, financial affluence, and material possessions, they still question whether they would be happier with more money, a more reputable job, a fancier car, a more comfortable house, more stylish clothing, and so on. But it’s all in vain. It turns out that the relation of income to happiness is not linear.

After a certain level of income, the more income one gets, the less happy he becomes. The common view that material possessions and status are the objective indicator of one’s level of happiness turns out to be a threatening fallacy.

The Relation of Money to Happiness

Happiness commonly describes one’s positive emotional state, either at a certain point of time or more broadly over a period of time. While happiness has many different definitions, it is often linked to experiencing more positive feelings than negative ones. Indeed, in a specific moment one experiences both positive and negative emotions and feelings.

Happiness is generally linked to experiencing more positive feelings than negative ones in a specific moment. Talking broadly, happiness is defined as life-satisfaction and well-being, that is, the state of mind which incorporates feelings, but also, relationships, work, achievements, and other things that one may consider important in one’s life.

The qualitative nature of happiness makes it difficult to measure in research. Several proxies have been developed, among which subjective well-being is the most common index. It refers to current feelings or to specific psychosomatic symptoms and takes into account answers to questions like: “Taking all things together, would you say you are very happy, quite happy, not very happy, or not at all happy?”

Several theories have been developed in an effort to describe the relation of income to happiness. Among them, the theoretical model that conforms to research findings suggests a curvilinear relationship between income and happiness.57 In line with this theory, increases in income at the lower end of the income spectrum are translated into analogous changes in happiness.

Eventually, however, as income grows, additions in income are followed by ever lower increases in happiness. The maximum level of happiness is reached when increases in income do not result in more happiness. Beyond that level of income, increases in income are associated with decreases in happiness, with the pace of decrease accelerating as income increases.

This theory suggests that income only improves well-being to the extent it promotes the satisfaction of basic human needs. Once these needs are met, money accrues diminishing marginal returns on people’s well-being.58 This outlook is confirmed by evidence pointing out that the effect of income on happiness is strongest at low levels of income.

Under conditions of need, people spent the money they make directly on getting the basics for survival, which could explain the strong positive relationship between income and well-being in these circumstances.

This theoretical model also predicts the research findings showing that increases in income among those who are already well-off are not followed by corresponding increases in well-being,59 and they may result in lower well-being. Some studies show a rather steep inflection point at around the income level where basic needs are satisfied; after that point, the influence of income on happiness drops off sharply.60

In short, theory and research indicate that money only increases well-being inasmuch as it eases the fulfilment of necessary human needs. Beyond that level, adverse side effects make the relationship weak or negative.

Why Is the Relationship Between Income and Happiness Weak?

Money is the most powerful asset which can buy most of what one might desire. Why, then, is the association between income and happiness so insignificant, particularly among the non-poor? Several causes seem to work in concert.

In general, economic variables, notably income, appear to have little effect on either well-being or ill-being. Part of this is because happiness is determined much more by how one thinks about the world than by the way the world actually is, so changes to the external world have relatively little impact on subjective well-being. Well-being turns out to be much more affected by personality traits and personal relationships, and ill-being by personality problems, marital problems, job problems, and self-assessed health.

The following are some of the reasons that adversely affect the relation of income to happiness:

Adaptation: It is a genetic faculty of the mind. Once the mind gets used to a stimuli, it forms neuronal circuits to memorize the experience, a process called habituation or adjustment.61 Theory and research support the view that the same process takes place with income and happiness.

Indeed, when people aim to attain a certain level of income, considering that it will make them happy, they observe that on reaching it, they soon become accustomed to it, and at that point they begin desiring the next level of income. This is the well-known psychological phenomenon of “escalation of expectations.”

Many studies have established that desires and goals keep going upward as soon as the previous levels are reached, and therefore, it is not the actual size of the income but its deviation from one’s “adaptation level”62 that improves subjective value. People usually consider their current standard of living as inadequate63 regardless of how much they actually earn.

Social Comparison: People value their goods not according to their needs but in relation with those who have the most. Thus, the comparatively wealthy feel poor in relation to the very rich and are unhappy as a result. This aspect of “relative deprivation”64 seems to be fairly common and well-documented by experimental studies.65 The relative income hypothesis suggests that the only benefit of income is status derived from social comparison, i.e., having more than someone else.

The absolute level of income seems to have a minor effect on happiness. A consequence of this theory is that economic growth has a slight effect on happiness in advanced countries66 since, following a rise in income, the processes of habituation and social comparison fully nullify67 any lasting effect on happiness. On the contrary, economic growth in poor countries can accommodate people to meet their necessary needs, which affects happiness directly.

Negligence of Other Pleasures: The third reason for the weak relation of income to happiness is that money and material compensations alone are not adequate to make us happy. Other aspects of life, such as a pleasing family life, having close friends, and having time to spend on pleasurable activities and interests are also necessary to happiness.68 Time and psychic energy are the ultimate scarce resources of human beings, and their proper allocation is of utmost importance to happiness.

However, it turns out that it is practically impossible to sustain the right balance among competitive needs for a long time, especially under the overwhelming pressure of materialistic culture. Eventually, people succumb to materialism at the cost of higher stress, poor relationships,69 lower self-esteem, greater narcissism, less empathy, and less intrinsic motivation.

If Money Doesn’t Buy Happiness, Why Do We Ask More of the Same?

We are witnessing nowadays that people try to earn more money to maximize their happiness despite the considerable evidence for the contrary. Here are some reasons why people might behave at odds with their own happiness.

False Hedonic Evaluations

This explanation supports that whereas people are trying to maximize happiness, they usually make false hedonic calculations by disregarding that the circumstances in which they are making their forecasts are not the same as those which they will have at the time of the experience. They are usually wrong both in predicting70 their feelings arising from future events and the duration of them.

Especially with regard to the duration of future feelings, people usually tend to exaggerate how long the positive changes in happiness will last and underestimate how fast and to what extent they will recover emotionally from negative developments. The durability bias reveals the psychological process of “adaptation,” where the emotional impact of change fades away as soon as people habituate to the new condition.

People ignore the habituation effect, so when they contemplate an increase in pay, they imagine how happy they would be with the future income and the current “material norm.” Yet, time and time again, their “material norm” does revise upward after getting a rise, and people, being unaware of this development, make biased decisions.71

What does “material norm” consist of? This is a function of many variables, including “what relevant others have, the best one has had in the past, what one expected to have in the past, what one expects to have in the future, what one deserves, and what one needs.”72

The False Beliefs of Materialism

The second explanation puts the blame on false desires and goals, implying that people are essentially attempting to fulfill desires and achieve goals that may conflict with their happiness. This view attributes the source of false desires to the ill-founded belief of “materialism,”73 which endorses values and goals that center on the importance of acquiring money and possessions that convey status (power, prestige, achievement, reputation, and popularity).

The association of material and subjective well-being originates from research on happiness that psychologists and other social scientists have started to pursue. It is true that these studies lack objectivity because they are based on self-reports and on verbal scales of subjective well-being, but they do, nevertheless, provide interesting findings.

The common finding of these studies is that prioritizing money and related aims is negatively74 associated with individual well-being, and also, the stronger the materialistic goals one holds, the less happy and satisfied he is. Similarly, other studies show that increases in material goods are not associated with comparable increases in happiness.75

On top of this, research shows that materialism can cause a diversity of psychological diseases such as depression, paranoia, and narcissism.76 They suggest that everyday exposure to advertising of consumer goods creates the feeling of inadequacy and frustration77 because one appears to lag behind the latest developments in the production of innovative products. Some studies suggest that people may manifest symptoms of low mood, use of alcohol and drugs, or excessive buying and spending.78

Research findings also suggest that materialism is a symptom of an underlying feeling of psychological insecurity.79 People use materialism as a coping strategy in order to deal with their feelings of insecurity80 arising from a variety of causes. Some of them are growing up with cold, controlling mothers81 or divorced parents,82 being raised in economically difficult situations, having low self-esteem, mortality salience,83 or poor relations.

Also, research submits that the pursuit of materialistic values and goals leads people to a lifestyle that crowds out other experiences of life that are necessary for psychological thriving,84 such as competence, autonomy, and relatedness.85

The adverse association between materialism and well-being is all the more painful because materialistic people undergo substantial personal sacrifices to pursue their materialistic ambitions, and they easily get into debt to readily finance their desires.

Indeed, to satisfy their excessive consumption desires, materialists are forced to work more. Thus, the free time left for activities contributing to happiness is minimal. Likewise, having high materialistic goals requires structuring their whole life toward the success of their materialistic goals, showing no interest in other activities more conducive to happiness.

Shaping a “Consumerist Identity”

Some researchers highlight an additional reason for false decision-making. They argue that the capitalist system offers consumers a wide variety of choices related to brand names and prices that create embarrassment and anxiety. An additional source of frustration is that any choice has as the automatic consequence of the rejection of the rest, which creates both anxiety for the correctness of one’s choice and a sense of loss for the remaining neglected choices.

This feeling of embarrassment is the price one pays for the possibility of choosing. The more available choices, the greater the emotional cost will be. Researchers support that these feelings of embarrassment last for as long as it takes to create one’s personal “consumerist identity.”86

How to Improve the Relationship of Money to Happiness

Make Rational Decisions

The overwhelming power of materialism in modern life has turned the pursuit of happiness into a kind of careless hedonism, calling one to experience whatever pleasure is ready at hand or easy to procure regardless of consequences. This attitude is far from the suggestions of the ancient and modern hedonist philosophers who advocate the pursuit of pure pleasure—the pleasure, that is, which takes into account the pain involved in the process of pursuing pleasure.

Remember how Epicurus praises prudence as a virtue inextricably related to the happy life: “It is impossible to live a pleasant life without living wisely and honorably and justly, and it is impossible to live wisely and honorably and justly without living pleasantly.”87


Update our Knowledge on What Matters in Pursuing Happiness

Most people are unaware of research findings concerning the relation of money to happiness. When they are asked what would improve the quality of their lives, the first and principal answer is more money.88 Given these facts, it seems that one of the most important ways for people to improve their lives is to rely on scientific evidence, because only in this way will they learn to base their decisions on what really influences happiness and avoid wasting their lives pursuing goals that matter hardly at all.

Also, knowledge helps people make wiser projections about the future consequences of their decisions, so they are not disillusioned by high expectations or overlooking the possibility of negative outcomes.

Reconsider our Philosophy of Life

The primary step in changing our philosophy of life concerns the recognition that materialistic values stand in relative conflict with the happy life. Subsequently, the second step is to replace the materialistic approach to life with the findings of modern psychological theory and research which suggest that happiness is a mental state, and therefore it depends essentially on our perception of outward things rather than the things themselves.

It is essential to introduce beliefs upholding healthy desires and goals. There are several psychological approaches to happiness suggesting the attainment of various goals, such as the maximization of pleasure, self-actualization,89 positive emotionality,90 autonomy,91 learned optimism, flow,92 and so on.

Opt for Experiences over Material Possessions

Certainly, the dilemma of how best to spend our money in the pursuit of happiness may not appeal to everyone. People who have few resources and can hardly meet their basic needs of food, shelter, clothing, and security are unlikely to face issues about how best to spend their money in the pursuit of happiness.93 Hopefully, most people in the developed countries enjoy a level of financial affluence that provides the comfort of inquiring about how best to maximize happiness.

The hedonic superiority of pleasant experiences over material purchases is based on the broad variety of positive emotions they produce, and this is well documented by research findings. One major reason that experiences matter more in happiness than material possessions is that experiences involve higher-level meanings than material possessions. Visiting a museum, for example, provides a more favorable emotional impact than buying a new shirt.

A second reason is that experiences are private and therefore are not subject to social comparisons that usually lessen the subjective value of positive actions.94 Receiving a raise in salary or buying a new car may feel less rewarding, and may even be disappointing, when other people receive larger raises and buy better cars. Similarly, new purchases frequently fall short of our expectations, and such comparisons are likely to decrease our happiness.95

On top of that, if we had many choices to consider, we may feel disappointed that we rejected the alternative options, or even discover that our choice is lacking to the foregone alternatives.96 A third reason for the superiority of experiences over material possessions is that experiences have more social value than material possessions and therefore produce more intense emotions than purchases of goods.

Going out to dinner or traveling with other people is more emotionally stimulating than buying and enjoying stuff, which is a solitary activity. Again, discussions over experiences are more stimulating than conversations about material possessions, and in this way, experiences promote social relations more than material possessions.

On the contrary, material possessions provide limited scope for conversation, with a rather typical structure. Several studies show that even the expectation of experiences is more pleasurable than expecting to purchase material goods.97 In general, it seems that intrinsic properties of experiences make them more pleasant than the purchase of material goods.

Indeed, experiences are more self-defining,98 more unique,99 harder to compare against forgone alternatives, and less prone to hedonic adaptation100 than material possessions.

Experiences are of two fundamental sorts: one associated with feeling excited and the other associated with feeling calm. Moreover, the way happiness is felt progresses with age, so that young people are more likely to manifest happiness as excitement, but as people get older, they express happiness as calm. Whereas younger people enjoy greater happiness from extraordinary experiences, everyday experiences provide more happiness as people get older, suggesting that ordinary experiences produce as much happiness as extraordinary experiences when people feel they have limited time remaining.

Combined, these findings suggest that concentrating on time increases happiness and that thinking about time as extensive or limited can affect not only how much happiness people experience, but also how they experience happiness.

Value Time

Despite both money and time being valuable human resources, the time spent on experiences has substantially greater psychological effects on human behavior and happiness.101 Drawing attention to time seems to raise happiness. It pushes people to see the finitude of their lives and focus on spending their limited time in the most pleasurable way, such as socializing more and working102 less.

It seems that people basically appreciate spending time on doing. Even though they often like to stay quiet, active people103 are happier than their idle counterparts, and they would possibly be even happier if they were doing things with others, due to the emotions arising from social interaction.104

Embrace Altruistic Spending

As we have seen, research findings imply that after essential needs have been satisfied, additional income is not associated with increases in well-being.105 In addition, new studies suggest these results are evidence that people spend their additional income in ways that do not pay off in terms of happiness.

Normally, the studies put forward spending money on “stuff” for oneself invariably fails to compensate in terms of happiness106; however, alternative spending objectives, such as buying experiences and altruistic spending, have a greater potential payback in increased happiness.

A growing number of research supports that spending on others enhances well-being: the more people give,107 the happier they are. Feeling happy from giving is not simply a socially taught behavior but an inherent human need, as we can see how happy children are by sharing their goods108 with others rather than keeping them only for themselves.

Barriers to Controlling Materialistic Pursuits

Sadly, there are barriers to controlling materialistic pursuits. First, people may be unaware of their own materialistic ambitions, although they can easily see them in others. Materialistic pursuits must first be recognized to be shunned. Second, influenced by social comparisons and adaptation, people seem to maintain a luxurious definition of “needs.”

Clearly, many material possessions usually fail to meet an objective definition of necessity, and one should critically examine how pressing their “needs”109 truly are. Thirdly, advertising exerts an intense impact on the behavior and the psychological profile of modern humans by formatting a materialist culture in which we all are perpetually consumers. To cultivate a consumerist mentality, advertisers promote the artificial image of an ideal consumerist model in which authentic human needs and desires are substituted with manufactured ones.

New products are produced daily, and advertisers use all possible means to create purchasing awareness for them. For many people, television is, unfortunately, their main means of contact with the outside world. Thus, advertisers have the outlet to pass any sort of messages to promote consumer products. Their strategy is based on the recipe that no matter how absurd something is, people will believe it when they’re frequently exposed to it.

The potential of advertising to promote materialism rests on the additional reason that consumption is the easiest way to make one feel happy. No matter if the emotional effects of shopping are transient, diminishing after a short while, people still use it as a convenient way to easy happiness, a way to relax and ease themselves from the tensions of everyday life.

Unexpectedly, it is not only entrepreneurs and advertisers who push us into spending on material goods. Governments also promote household and individual spending because private consumption is a major constituent of gross domestic product and is, therefore, an essential variable for economic analysis of demand and a decisive instrument of public policy.


Conclusively, in the Epicurean philosophy happiness has a maximum level which is associated with the pleasure that we feel when the pain of the natural and necessary needs is removed. We can be happy with very little wealth and few possessions. In the idealistic philosophies consumption has no limit because the “wants” of logic are limitless. For whatever we get, we will always want more.

There is no point at which we can say enough is enough. The end of it is vanity. Advertisers are subtly working on making us unhappy and unsatisfied. Wealth does not guarantee happiness, and this is supported by the syndromes of “early adjustment” and “relative deprivation.” Everything works against us and leads us into a perpetual cycle of materialism.

Many argue that they see work as a source of happiness, but this is not confirmed by experience, because work has replaced the traditional social activities and is closely linked to the desire of acquiring material goods. The most positive effect that happiness has on us means taking part in enjoyable experiences. Happiness is not an elusive butterfly. For the people, though, who are trapped in materialism, it is often an unattainable goal.


1 VS 67.

2 VS 81.

3 VS 33.

3a PD 21.

4 Epic LetMen.

5 PD 15.

6 Seneca attributes these words to Epicurus.

7 Epic LetMen.

8 VS 41.

9 VS 63.

10 DL X 11.

11 Seneca and Cyrenaics.

12 Epic LetMen; PD 14; VS 25, 68; Sen. Ep. 1 6. 9; Us. 473, 478, 479, 480.

13 Lucr DRN V 1105-1135.

14 Lucr DRN III 55-85.

15 Tsouna, 1996; 2007; 2012; Natali, 1995.

16 Tsouna, 2012, Column XVI.

17 Tsouna, 2012, Column XVI 44-46.

18 Tsouna, 2012.

19 Tsouna, 2012, Column XV.3-6.

20 Tsouna, 2012, Column XXV.23-24.

21 Tsouna, 2012, Column XXV.31-42.

22 Tsouna, 2012, Column XXV.42-XXVI.1.

23 Tsouna, 2012, Column XXVI.1-9.26.

24 Tsouna, 2012, Column XXVII.5-12.

25 Tsouna, 2012, Column XXV.17-18.

26 Tsouna, 2012, Column XXV.2-3.

27 Tsouna, 2012, Column XXV.16-23.

28 Tsouna, 2012, Column XXV.11-12.

29 Tsouna, 2012.

30 Tsouna, 2012, Column XIV.23-25.

31 Tsouna, 2012, Column XXIV.41-46.

32 Tsouna, 2012, Column XXVI.9.

33 Tsouna, 2012, col. XXIII.4-5.

34 Tsouna, 2012, col. 17.2-14.11.

35 Tsouna, 2012.

36 Tsouna, 2012, Column XIV. 5-9.

37 Tsouna, 2012, Column XXII, xxxvii-xxxviii.

38 Tsouna, 2012.

39 Tsouna, 2012, Column XXIII.

40 Tsouna, 2012, Column XXIII.

41 Tsouna, 2012, Column XXIII.

42 DL X 120.

43 Seneca, Moral letters to Lucilius/Letter 16.

44 Aristotle, NE and the EE.

45 Aristotle, NE and the EE.

46 Aristotle, NE and the EE.

47 Aristotle, NE and the EE.

48 Aristotle, Politics; DesRoches, 2014.

49 Booth, 1993.

50Aristotle, Politics.

51 Aristotle, Politics.

52 Aristotle, Politics.

53 Aristotle, NE and the EE.

54 Nussbaum, 2009.

55 Locke, 1689.

56 Bentham, 1970.

57 Veenhoven, 1991; Veenhoven, et al., 2006

58 Frey et al., 2000, 2002; Helliwell, 2003.

59 Easterlin, 1995; Myers, 2000; Oswald, 1997.

60 Ahuvia, et al., 1998; Argyle, 1996; Kahneman et al., 1999; Cummins, 2000

61 Frederick et al., 1999.

62 Davis, 1959; Michalos, 1985; Parducci, 1995.

63 Burchardt, 2005; Kasser, 2002; Richins, et al., 1994; Ryan, et al., 2001; Sirgy, et al., 1998.

64 Martin, 1981; Williams, 1975; Stutzer, 2004.

65 Smith et al., 1989.

66 Blanchflower et al., 2004.

67 Stutzer, et al., 2004; Myers, 1992, 1995, 1997; Campbell, 1981; Diener, 1984; 1985

68 Myers, 1993; 1995; Veenhoven, 1988.

69 Csikszentmihalyi, 2000; Kasser et al., 2004; Ng, W et al., 2009.

70 Gilbert, 2006; Gilbert et al., 2007; 2009.

71 Frey et al., 2002; 2004.

72 Lance, 1995.

73 Dittmar et al., 2014; Dittmar, 2008; Kasser et al., 2004; Richins, 2004; Sirgy et al., 1998.

74 Dittmar et al., 2014.

75 Diener et al., 2002; Easterlin, 1995.

76 Cohen et al., 1996; Kasser et al., 1993.

77 Collins, 1996; Richins, 1994; Halliwell et al., 2006.

78 Benson, 2000.

79 Kasser, 2002.

80 Kasser et al., 2004.

81 Kasser et al., 1995.

82 Rindfleisch et al., 1997.

83 Kasser, 2000.

84 Deci et al., 2000.

85 Kasser, 2002.

86 Ahuvia, 2005; Jubas, 2010; Muniz et al., 2001; Sirgy, 1982, 1986.

87 VS 5.

88 Campbell, 1981.

89 Maslow, 1968; 1971.

90 Diener et al., 1985; Diener, 2000.

91 Ryan et al., 2000; Deci et al., 1985.

92 Csikszentmihalyi, 1997.

93 Maslow, 1943.

94 Brickman, 1975; Brickman et al., 1971; Frank, 1985.

95 Schwarz et al., 1999; Roese, 1997; Weaver et al., 1974.

96 Roese, 1997.

97 Kumar et al., 2014; Howell, 2009; Van Boven, 2003.

98 Carter et al., 2012.

99 Carter et al., 2010.

100 Rosenzweig et al., 2012; Nicolao et al., 2009.