Are you unhappy? If so, you’re not alone. Only about 50% of the population describes themselves as happy, and while those living in higher-income countries that are better off financially rate a bit higher on the happiness scale, the disparity is only a few percentage points. So why is this? Since most of us are arguably better off than the vast majority of people who lived throughout human history, why are we not more happy? The answer, and the secret to happiness, can be found in simple economic theory.
First, what creates happiness? There are many ways to answer this, but the simplest is we are happy when we have what we value. By “have”, I mean relationships, health, finances, etc. It doesn’t have to be a physical possession, but it could be. Everyone is different. You can prove this by just asking anyone what makes them happy. They will always answer with things they want to have either control of, or readily available. So if “children” make you happy, you don’t want children that live somewhere else in the world that you never interact with, you want children that are available and part of your life.
But if happiness is having things of value, what determines the value we place on something? Again, this can be different for different people, but in this case we are all subject to the laws of economics. And in economics, scarcity creates value. If there is less of something, it tends to be worth more. A natural diamond is worth more than a synthetic diamond (even though most of us can’t tell the difference) and both are worth more than coal (even though all are just made of carbon).
The ironic thing is that once you have something, it is no longer scarce to you. Therefore, you tend to value it less than things that are not available. Think about air and water. For those who cannot breathe, or those who have no water, these are incredibly valuable resources. For many of us, we don’t even give them a thought. And it’s why things you wanted so badly often don’t seem so important once you get them…whether it’s a spouse, a great job, or that new car. We’re off focusing on other things we don’t have that now seem more valuable because they are what is scarce in our lives, not what we have.
So how do you change this? The answer is surprisingly simple: focus on how scarce what you have is. Think of all the people throughout human history who would love to be in the same circumstances as you. By doing so you will create value in your current conditions. It is often quoted that gratitude is one of the common characteristics of happy people, and this is because gratitude is expressing value for the current conditions you have in your life.
So create a habit in your life of consciously acknowledging all the good things you have, and how valuable they are. I think you will be surpised at how this makes you feel.
Did this work for you? Let me know!