16 November 2003
AMMAN — Jordan has been recording respectable growth rates ranging between three per cent and five per cent in the past few years, exceeding population growth rates of around 2.8 per cent. Jordan's gross national income (GNP), i.e. the income generated by nationals inside and outside the country, far exceeds income generated domestically (gross domestic product or GDP).
This is mainly due to the sizeable amount of remittances transferred by Jordanians working abroad, which reached to JD1,514 million in 2002. Average living standards as measured by gross national income per capita have risen four folds since the early 1960s, and have improved by 17 per cent in the past six years from JD1,365 in 1996 to around JD1,600 in 2002.
While better economic conditions have greatly increased overall levels of prosperity, they have conspicuously failed to deliver a corresponding improvement in the people's sense of being happier. Levels of reported happiness for a wide sector of the population seem to have either stayed the same or in some cases declined. It may be that we have a "culture of complaint" as we are always nagging about our well being and looking at the half empty part of the cup.
Certainly one reason is that the benefits of increased prosperity have not been evenly spread to all sectors of population. Experiences from elsewhere make us expect that as a country grows richer and its national income is on a rising trend, rich and poor alike would become happier. However, in Jordan they have not.
The paradox is that when an individual enjoys higher income levels he becomes happier, but when the society as a whole attains higher standards of living, not every one seems to be content. To say that money does not buy happiness is not exactly new, as those who moved up on the income ladder would attest. But to suggest that beyond a certain point, societies do not get happier as they become richer, has strong policy implication that is worth analysing.
So far the government has been using GDP (gross domestic product) as a proxy for well being. Yet, if the link between GDP and happiness no longer exists, one of the key objectives of government policy, of attaining high real growth in GDP would be a necessary but not a sufficient condition to deliver a corresponding improvement in people's sense of well being.
An explanation for our society's broader sense of dissatisfaction may lie in the "Hierarchy of Needs" that Abraham Maslow, a behavioural psychologist drew up in 1943. Maslow asserted that the highest level of human satisfaction and happiness was the need to achieve self fulfillment. Below that there were other levels of needs, each of which had to be satisfied before people could progress to the next.
At the bottom of Maslow's pyramid of needs were the basics of life such as food, housing and material comfort. Next were safety and security, followed by love and belongingness, including the desire to feel accepted by the family and community. After that came the need for esteem and other people's respect and admiration. Then finally at the top came what Maslow called “self-actualisation,” where people start enjoying what they have, finding happiness in one's own attainments, without being influenced by those who are materially better off.
At that level, people usually seek knowledge and aesthetic experiences for themselves and derive pleasure in helping others achieve self-fulfillment.
Recently, economic studies on happiness supported Maslow's proposition. They showed that while people on very low income become significantly happier when their earnings rise, but once they reach a quite modest level of income, as little as $500 (JD355) a month, further increases in earnings bring little extra happiness.
One explanation is "habituation" whereby people adjust quickly to changes in living standards. Although improvements and material well being make them happier for a while, the effect gradually fades away. For instance, 30 years ago central heating was considered a luxury, and so was the mobile phone five years ago. Today these are viewed as essentials.
A second and more important reason why more money does not automatically make every body happier is that people tend to compare their situation with that of others. In a striking example, when senior employees of a Jordanian investment banking institution were asked whether they would prefer (a) four months bonus while others got half of that or five months bonus while others got six months. A majority chose (a).
It seems that they will be happy with less, as long as they were better off than others. Other studies confirm that people are often more concerned about their relative income to others than about their absolute income.
Pleasure derived from attaining a higher standard of living can vanish quickly when people learn that others in their community or society have done better. Because of better communication and means of transportation, the poor are now able to witness first hand the extravagance of the few at the top and envy them for what they have.
The unhappiness that one person's wealth can cause to others is a form of "economic pollution" that has not been properly addressed in economic theory and policy.
Attaining real economic growth rates of five per cent annually would double Jordan's GDP in 15 years. But would that make us twice as happy? Would being exposed to twice as many consumer goods put us at a higher level of satisfaction, or would it simply make us twice as depressed and twice as envious? Rather than wait to find out, the government should take new initiatives and set new targets that go beyond attaining higher GDP growth rates.
These would include having the population at large achieve higher levels of satisfaction and happiness. It is easier said than done, but we need to be creative. It has become imperative that all Jordanians should sooner than latter be able to satisfy their basic needs so that they can ascend to a higher level of Maslow's pyramid.
The second level of this pyramid which includes people's need for safety and security and the third level which puts emphasis on love and belonging including the desire to feel accepted by the family and the community are easier to be attained here than in the Western world.
Unemployment and poverty are major sources of unhappiness that need to be addressed. The government is introducing various schemes and plans aimed at eradicating poverty, but more should be done. People need to know that job opportunities are there if they are willing to accept them. Those in the middle to lower income brackets should not feel they are shouldering a heavier tax burden than the ones in the higher income brackets.
If happiness is more important than money then it makes sense to have a "Minister of Fun" whose job would be to communicate to the population ways and means to attain happiness, emphasising the importance of enjoying what they have and the need to pursue self-esteem and fulfillment rather than material well being only.
AMMAN — Jordan has been recording respectable growth rates ranging between three per cent and five per cent in the past few years, exceeding population growth rates of around 2.8 per cent. Jordan's gross national income (GNP), i.e. the income generated by nationals inside and outside the country, far exceeds income generated domestically (gross domestic product or GDP).
This is mainly due to the sizeable amount of remittances transferred by Jordanians working abroad, which reached to JD1,514 million in 2002. Average living standards as measured by gross national income per capita have risen four folds since the early 1960s, and have improved by 17 per cent in the past six years from JD1,365 in 1996 to around JD1,600 in 2002.
While better economic conditions have greatly increased overall levels of prosperity, they have conspicuously failed to deliver a corresponding improvement in the people's sense of being happier. Levels of reported happiness for a wide sector of the population seem to have either stayed the same or in some cases declined. It may be that we have a "culture of complaint" as we are always nagging about our well being and looking at the half empty part of the cup.
Certainly one reason is that the benefits of increased prosperity have not been evenly spread to all sectors of population. Experiences from elsewhere make us expect that as a country grows richer and its national income is on a rising trend, rich and poor alike would become happier. However, in Jordan they have not.
The paradox is that when an individual enjoys higher income levels he becomes happier, but when the society as a whole attains higher standards of living, not every one seems to be content. To say that money does not buy happiness is not exactly new, as those who moved up on the income ladder would attest. But to suggest that beyond a certain point, societies do not get happier as they become richer, has strong policy implication that is worth analysing.
So far the government has been using GDP (gross domestic product) as a proxy for well being. Yet, if the link between GDP and happiness no longer exists, one of the key objectives of government policy, of attaining high real growth in GDP would be a necessary but not a sufficient condition to deliver a corresponding improvement in people's sense of well being.
An explanation for our society's broader sense of dissatisfaction may lie in the "Hierarchy of Needs" that Abraham Maslow, a behavioural psychologist drew up in 1943. Maslow asserted that the highest level of human satisfaction and happiness was the need to achieve self fulfillment. Below that there were other levels of needs, each of which had to be satisfied before people could progress to the next.
At the bottom of Maslow's pyramid of needs were the basics of life such as food, housing and material comfort. Next were safety and security, followed by love and belongingness, including the desire to feel accepted by the family and community. After that came the need for esteem and other people's respect and admiration. Then finally at the top came what Maslow called “self-actualisation,” where people start enjoying what they have, finding happiness in one's own attainments, without being influenced by those who are materially better off.
At that level, people usually seek knowledge and aesthetic experiences for themselves and derive pleasure in helping others achieve self-fulfillment.
Recently, economic studies on happiness supported Maslow's proposition. They showed that while people on very low income become significantly happier when their earnings rise, but once they reach a quite modest level of income, as little as $500 (JD355) a month, further increases in earnings bring little extra happiness.
One explanation is "habituation" whereby people adjust quickly to changes in living standards. Although improvements and material well being make them happier for a while, the effect gradually fades away. For instance, 30 years ago central heating was considered a luxury, and so was the mobile phone five years ago. Today these are viewed as essentials.
A second and more important reason why more money does not automatically make every body happier is that people tend to compare their situation with that of others. In a striking example, when senior employees of a Jordanian investment banking institution were asked whether they would prefer (a) four months bonus while others got half of that or five months bonus while others got six months. A majority chose (a).
It seems that they will be happy with less, as long as they were better off than others. Other studies confirm that people are often more concerned about their relative income to others than about their absolute income.
Pleasure derived from attaining a higher standard of living can vanish quickly when people learn that others in their community or society have done better. Because of better communication and means of transportation, the poor are now able to witness first hand the extravagance of the few at the top and envy them for what they have.
The unhappiness that one person's wealth can cause to others is a form of "economic pollution" that has not been properly addressed in economic theory and policy.
Attaining real economic growth rates of five per cent annually would double Jordan's GDP in 15 years. But would that make us twice as happy? Would being exposed to twice as many consumer goods put us at a higher level of satisfaction, or would it simply make us twice as depressed and twice as envious? Rather than wait to find out, the government should take new initiatives and set new targets that go beyond attaining higher GDP growth rates.
These would include having the population at large achieve higher levels of satisfaction and happiness. It is easier said than done, but we need to be creative. It has become imperative that all Jordanians should sooner than latter be able to satisfy their basic needs so that they can ascend to a higher level of Maslow's pyramid.
The second level of this pyramid which includes people's need for safety and security and the third level which puts emphasis on love and belonging including the desire to feel accepted by the family and the community are easier to be attained here than in the Western world.
Unemployment and poverty are major sources of unhappiness that need to be addressed. The government is introducing various schemes and plans aimed at eradicating poverty, but more should be done. People need to know that job opportunities are there if they are willing to accept them. Those in the middle to lower income brackets should not feel they are shouldering a heavier tax burden than the ones in the higher income brackets.
If happiness is more important than money then it makes sense to have a "Minister of Fun" whose job would be to communicate to the population ways and means to attain happiness, emphasising the importance of enjoying what they have and the need to pursue self-esteem and fulfillment rather than material well being only.
By Henry T. Azzam
© Jordan Times 2003
