Unequal, Yet Happy
THE gaping inequality of America’s first Gilded Age generated strong emotions. It produced social reformers like Jane Addams, anarchist agitators like Emma Goldman, labor leaders like Eugene V. Debs and Progressive politicians like Theodore Roosevelt. By the 1920s, sweeping legislation regulating food and drugs and breaking up corrupt trusts had been passed. The road to the New Deal was paved.
But our current Gilded Age has been greeted with relative complacency. Despite soaring inequality, worsened by the Great Recession, and recent grumbling about the 1 percent, Americans remain fairly happy. All of the wage gains since the downturn ended in 2009 have essentially gone to the top 1 percent, yet the proportion of Americans who say they are “thriving” has actually increased. So-called happiness inequality — the proportion of Americans who are either especially miserable or especially joyful — hit a 40-year low in 2010 by some measures. Men have historically been less happy than women, but that gap has disappeared. Whites have historically been happier than nonwhites, but that gap has narrowed, too.
In fact, American happiness has not only stayed steady, but converged, since wages began stagnating in the mid-1970s. This is puzzling. It does not conform with economic theories that compare happiness to envy, and emphasize the impact of relative income for happiness — how we compare with the Joneses.
In the late 1800s, Thorstein Veblen, the theorist of “conspicuous consumption,” proposed that jewels and mansions were little more than the human equivalent of the peacock’s tail — their main purpose was simply to outdo other peacock tails.
In 1974, the economist Richard A. Easterlin famously wrote that although richer people were happier than poorer people in the same country, people in wealthier countries were not necessarily happier than those in poorer ones (once basic needs are met). More recently, the economist Robert H. Frank has described a status drive that traps Americans in an irrational consumer arms race, in which we vie for status through ever more wasteful purchases.
But if happiness depends on status, and if status depends on relative income, wouldn’t today’s historic income inequality predict a giant happiness gap? Why hasn’t this happened?
There’s no denying that socioeconomic status is still a strong predictor of social status. And class lines have become hardened. But in its cultural expression — and therefore in its effects on our happiness — inequality is increasingly disorganized. Consumerism has expanded the lifestyles, niches and brands that supply the statuses we seek.
As a result, social status, which was once hierarchical and zero-sum, has become more fragmented, pluralistic and subjective. The relationship between relative income and relative status, which used to be straightforward, has gotten much more complex.
For most of human history, inequality of wealth meant inequality of happiness. Status, and its related activities, envy and emulation, drove consumption. By the 1950s, rapidly rising standards of living across the West, combined with social pressures to conform, all conspired to intensify status competition. The architects of “rebel cool,” like Jack Kerouac and Norman Mailer, responded by rebelling against emulation consumption and the status hierarchy of postwar America. They inverted the dominant social hierarchy, rejecting the values of those at the top and appropriating the values of those who had been marginalized at the bottom.
The pursuit of “the cool,” in our view, fundamentally altered the psychological motivations underlying our consumer choices. In conspicuous consumption, our emulation of higher-ups means we compete directly for status because we want what they have. But rebellious consumption changed the game, by making a product’s worth depend on how it embodied values that rejected a dominant group’s status.