Collective Insanity and the Sources of Human Happiness

I was listening to a podcast the other day in which Mr. Money Mustache described people’s approach to buying cars as a “collective insanity that we have all signed up for without even realizing it’s completely bonkers.”  He was referring to people’s assumptions that (a) they need a car, and (b) to get it, they should borrow money, despite cars being depreciating assets.

Since then, I’ve been ruminating on the notion of “collective insanity,” and the ideas we tend to take for granted as Americans living in the year 2017 (and, for me specifically, as also a big city professional surrounded by lots of other big city professionals).  These are (by definition) hard to recognize — we are all living in a sector of society from which we subconsciously learn the “right” or “accepted” way to live.  In my relatively short time writing this blog (and talking about our new efforts at frugality in real life), even the notion of consciously trying to spend less money has been perplexing to lots of people in our circles.  One neighbor made a face like he swallowed a lemon when I mentioned we were trying to spend less, and quickly told me that the best financial advice he ever got was that the secret to accumulating wealth was to make more money.  Another friend was shocked to learn I opted to travel by bus instead of train recently (“You’re in a two-lawyer household… what are you doing living the MegaBus life?!”).  And, some family members told me recently how crazy they thought it was when, at age 32, I moved into a shared house to slash my biggest living expense and use the savings to pay down loans (“We thought, what is she doing?! She has a good job, she doesn’t have to do this!”).

All of those comments touch on the big idea that spending habits are more reflexive and subconscious than need-driven or joy-maximizing.  So many of them are based on unchallenged assumptions about what’s “normal,” without any consideration about the real tradeoffs being made.  The big tradeoff, of course, being that every time you spend money, you are trading a little bit of your time that you spent making that money (or that you will have to spend making back that money in the future).

Confusing unchallenged spending habits with perceived spending needs contributes to the feeling that you simply can’t leave your demanding, high-paying job anytime soon, and the only hope for you is to win the lottery, which is never happening, so DESPAIR!

But psychology has a name for one aspect of this — the hedonic treadmill, or hedonic adaptation.  The idea is, as you improve your life circumstances, your desires simultaneously increase, so that you constantly feel like you want or need more to be happy.  Doubtless, this phenomenon drives human ingenuity and progress to some degree.  But on a personal level, it results in increased consumption and the need to work more to support that increase.  While people in my grandparents’ generation took their honeymoons to places like Niagara Falls, people in my generation fly to the other side of the globe to honeymoon in Bali.  And yet, the more expensive trip isn’t necessarily more enjoyable (or proportionally more enjoyable relative to how much money is spent).  To illustrate, a friend (who is a pediatrician) recently told me about two vacations she took in successive years.  One year, she and her husband went to Greece.  The next year, they took a week off and returned to her childhood summer camp in New Hampshire.  She spent the week as the camp doctor, sporadically helping kids with heat rash or poison ivy, while spending the rest of the time hiking and swimming and doing other summer camp things.  They had an amazing time, and planned to return the next summer, all while spending a fraction of what they had spent on the trip to Greece.  She concluded, “Our trip to Greece was awesome.  But was it 6 times more awesome than our summer camp vacation?  No.”

People today live in bigger houses with more bathrooms per person.  We have gadgets that do magical things for us and appliances that take the toil out housework.  We are, by objective measures, living better than our forbears and even a fairly modest American household expects and enjoys more of these advances than people in many other parts of the world.

The tricky part is to recognize that these things — while the norm in our society — are not normal.  They are different from the way humans have lived for most of our existence, and different from the way people live in many other parts of the world.  And yet, are we to conclude that those other people live/lived sad, deprived lives because they don’t have all the great things we’ve all come to expect in our present American society?  I would venture… not.

As I’ve been contemplating this issue over the past few weeks, I’ve come across a few academics writing on the subject — Juliet Schor, a sociologist at Boston College, and Robert Frank, an economist at Cornell.  I have not had a chance to delve into their work yet, but have added the relevant titles to my reading list.

At this point though, for practical purposes, this line of thinking has challenged me to try to look at the way I live with a fresh set of eyes, in the hopes of identifying areas where following the societal norm is not, in fact, going to contribute to my long-term happiness.  Some areas of life are easier for me to question than others — for instance, I do like buying nice clothes (and have had to buy a lot of fancier clothes for work), but it’s easy to conceive of buying fewer of them for less money without much of a mental shift.  But I already can feel myself reflexively resisting change in other areas, like housing and home furnishings, for example, and technology.  This is the challenge, and I expect it to be an evolving work in progress.

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