Saturday, May 8, 2010

Ben Bernanke's Advice on Happiness

Ben Bernanke in this fascinating and wise article in today's Wall Street Journal called "Bernanke Offers a Lesson on Happiness" is a departure from his usual theme of the mechanics of modern central banking. The occasion was the commencement speech to the graduating class at the University of South Carolina.

Mr. Bernanke's speech mentioned that economics is "at its very roots, a study of how to improve human happiness and sense of satisfaction in life" citing 18th and 19thC philosophers Jeremy Bentham and John Stewart Mill, along with Adam Smith, the father of modern economics. 

Happiness research has had a "renaissance" in recent years, as Mr. Bernanke points out. For example, one psychological study shows "commuting is a big detractor from happiness,"  while "dining with friends adds to it greatly."

He says that richer countries "have more resources to devote to medical care, to good nutrition and sanitation, and to workplace safety" producing "higher life expectancies, lower infant morality rates, and generally better health indicators" than poor countries. Mr. Bernanke said that a cleaner environment, "more leisure time, higher education levels, greater ability to travel and more funding for arts and culture" are more often generally provided by richer countries.

Even though the rich say they are happier than the poor, "life satisfaction" is not much different in lower-income countries. For example, Costa Ricans with one-quarter America's per capita incomes reportedly has roughly the same "life satisfaction" rate.

Mr. Bernanke alluded to the idea that "people's happiness depends less on their absolute wealth than on their wealth compared with others around them." 

Also on happiness, regarding family income, "by itself, money is not enough" said Mr. Bernanke. "Indeed, taking a high paying job only for the money can detract from happiness if it involves spending less time with your family, stress, or other such drawback." 

Yes, but my question is, what if the money is gained very quickly, from the stock market or a lottery winning, rather than through, say, the course of a doctor's long career as Mr. Bernanke says - then the money is there to spend without the sacrifices of the long hours involved in working.

Mr. Bernanke counseled his listeners to "spend time with friends [preaching to the converted in the audience of students] and family and put emphasis on social and community relationships" (something he knows about, having been head of the school board near Princeton, New Jersey, when he lived here.) He also advised students to be "so engrossed in what you are doing that you totally lose track of time" - "that feeling is called flow." Mr. Bernanke said, "If you never have that feeling, you should find some new activities - whether work or hobbies". He suggests keeping a "gratitude journal" to list "experiences and circumstances for which you are grateful."

Thank goodness, his English is plainer than that of his predecessor. Now that's a blessing....He tells a story about Lincoln saving a pig, because otherwise Lincoln would have "felt terrible." This parable was meant to exhort students to "do the right thing" even though it might not "maximize their own happiness" as Lincoln believed people always do (called the utility-maximizing theory of behavior).  It must have been a fantastic speech to listen to in person. America is very fortunate to have Mr. Bernanke in his position as Chairman of the Federal Reserve in Washington.

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