Working Paper Series 2016/11/EFE

The Happiness Conundrum

Manfred F. R. Kets de Vries INSEAD, [email protected]

Based on a case example of a deeply unhappy person, this article examines the elusive topic of happiness, paying special attention to the Big Five theory of personality, the interface between health, resilience, and happiness, and the importance of social networks, the workplace, and other variables in the happiness conundrum. I discuss the concept of the pursuit of happiness, introduce the notions of the hedonic treadmill and the “set point” of happiness, and explore the idea that we are able to “synthesize” happiness, using a variety of defensive mechanisms. I also look at the social and environmental factors that influence happiness, using data from the World Happiness Report, particularly the causes and effects of materialism and the significance of social comparisons. The article ends with suggestions about daily actions that can be performed to increase our level of happiness.

Keywords: Happiness; Hedonic treadmill; Set point of Happiness; Synthesized Happiness; World Happiness Report; Mental Health; Materialism; Social Comparisons; Workplace.

Electronic copy available at: http://ssrn.com/abstract=2740367

A Working Paper is the author’s intellectual property. It is intended as a means to promote research to interested readers. Its content should not be copied or hosted on any server without written permission from [email protected] Find more INSEAD papers at http://www.insead.edu/facultyresearch/research/search_papers.cfm

“Happiness comes when your work and words are of benefit to yourself and others.” —Buddha

“Happiness is when what you think, what you say, and what you do are in harmony.” —Mahatma Gandhi

“Happiness is not something ready made. It comes from your own actions.” —Dalai Lama

“It’s pretty hard to tell what does bring happiness. Poverty and wealth have both failed.” —Frank McKinney Hubbard

Introduction Carl was unhappy and he had been unhappy for a very long time. He was unhappy with his work, with his life, with the world, and, most of all, with himself. People who knew Carl remarked on the way he managed to find misery where others found happiness. No matter what the occasion, he always found something wrong to focus on. He seemed blind to the good things in life. He very rarely smiled. This attitude made people reluctant to associate with him and Carl had become a very lonely man. Unsurprisingly, his pessimism had shut the door on most connections outside his inner circle, making it very difficult for him to establish new relationships both inside and outside work.

Carl was a fully paid-up member of the self-pity club. His view of the world had always been dark. He was a pessimist and moaner who believed he was fated to have bad things happen to him. Life was unfair and he was its victim. Others were 1 much more fortunate than he was and he envied them. He hardly helped himself by never expressing any gratitude to people who were kind to him. His wife was thoroughly fed up and at her wit’s end. None of her efforts to accommodate Carl seemed to be good enough.

Things were no better at work, where Carl was VP of sales. His negativity was legendary within the organization. He never complimented people on work well done. Wherever he turned up, his presence lowered morale, affecting productivity— he seemed to have a knack for getting the worst out of people. His colleagues continually reminded him about the benefits of a positive approach, to no effect.

The fact was that Carl didn’t like his job, which he had drifted into. But when he was asked if he would be interested in finding a position that would give him more satisfaction and meaning, his response, predictably, was “mission impossible.” He had always avoided taking risks. He also worried a great deal about money, and that any change in his position might have negative financial consequences. Very few things interested him—drinking alone in the local pub the one sorry exception. Most who knew him regarded Carl as a tragic figure who had never stretched himself to his full capacity or reached his full stature.

What is happiness?

Carl’s unhappy story raises a number of questions. Why are some people contented with their situation in life while so many others appear to be unhappy? What differentiates these people? Do people make themselves unhappy?

These questions raise further important questions about the elusiveness of happiness itself. How does happiness affect us personally? And how does happiness affect the world we live in, including the world of work? Significantly, when people are asked what they want out of life, in most instances happiness is at the top of 2 their list. It is one of the most important—if not the pre-eminent— goals to which we aspire in life.

When we think about happiness, most of us envisage the good life, freedom from suffering, flourishing in whatever we are doing, prosperity, feeling well in ourselves, being aware of joy and pleasure. But responses to the question of what actually constitutes happiness produce a confusing conceptual potpourri (Barrow, 1980; Argyle, 1999, 2001; Boniwell and David, 2014). However, we can identify a number of converging ideas, very much in line with the old Chinese maxim that happiness is “something to do, someone to love, and something to hope for.” These key components can be related to our capacity for competence, belonging, and meaning.

The philosopher’s Holy Grail Philosophers, theologians and social psychologists have wrestled with the issue of happiness for centuries (Ryan and Deci, 2001; White, 2006; Cahn and Vitrano, 2008; Bortolotti, 2009; Kets de Vries, 2009; Bok, 2010). Among the Greek philosophers, Aristotle suggested that happiness should be seen as a combination of hedonia (immediate pleasures) and eudaimonia (a life well lived). This coming together of positive in-the-moment experiences and contented reflection retains its relevance. It suggests that the best way to obtain happiness is to have a mixture of short-term and long-term desires—present pleasures and something to look forward to.

Another happiness mix has been identified as frequent positive feelings, infrequent negative feelings, and high life satisfaction (Diener et al., 1999; Diener et al., 2009; Diener, 2008). The most fortunate, and most happy, among us are those who experience these three elements in the right proportions. They enjoy life, many things make them feel good, they have few worries, and experience few unpleasant or negative emotions. Conversely, the really unfortunate are those who miss out on all three.

However we define it, happiness is a highly subjective experience (Bradburn, 1969; Tatarkiewicz, 1976; Diener and Seligman, 2002; Diener and Biswas-Diener, 2008; Eid and Larsen, 2008; Seligman, 2011) and we are individually the ultimate judges of what constitutes it. According to Marcus Aurelius, “the happiness of your life depends on the quality of your thoughts,” while Seneca put it more pithily: “A man’s as miserable as he thinks he is.” Happiness is a state of mind and as such, it’s entirely up to us to determine whether we are going to face a situation with optimism or pessimism.

The happiness-personality interface Another factor we need to consider is our personality, which affects how we experience happiness. Carl is a very good example of how personality can affect the way we interpret the world.

Big Five theory of personality The Big Five theory of personality (Costa and McCrae, 1992; McCrae and Costa, 1987, 1996), or five factor model (FFM), posits that five major traits cover our attitudinal and behavioral inclinations: extraversion, agreeableness, conscientiousness, neuroticism, and openness to experience. Extraversion is our tendency to be talkative, sociable, and assertive. Agreeableness includes kindness, cooperation, warmth, friendliness, sympathy, and the ability to deflect interpersonal conflict. Conscientiousness includes responsibility, orderliness, and dependability. Neuroticism describes negative emotional states like anxiety, depression, anger, shame, worry, and insecurity. Finally, openness to experience refers to our capacity for imagination, and independent or divergent thinking.

Much research has shown that subjective well-being is closely related to these five dimensions (McCrae and Costa, 1991; Myers, 1992). For example, we can find a positive relationship between happiness and extraversion, in that extraverts tend to be happier than the ones that are not. At the other end of the spectrum, raised levels of neuroticism are linked to lower levels of happiness: emotionally unstable people 4 are more worried and less happy. There is also a significant relationship between agreeableness and happiness (the nicer we are, the happier we are); conscientiousness and happiness (acting right makes us feel good about ourselves); and happiness and openness to experience (sparking our imagination or intellect) (McCrae and Costa, 1991; Myers, 1992; Diener et al., 1999).

Health and happiness Happy people appear to enjoy good mental and physical health. While being in poor physical shape is unlikely to spell happiness, having an element of cause and effect, happy people seem predisposed to be less depressed and have greater energy and resilience, qualities that make it easier for them to bounce back from difficult life events. Research indicates that happiness has a positive influence on the human immune system; not only do happier people cope better with stress and trauma, they are also less likely to get sick and to live longer (Veenhoven, 2008; Diener and Chan, 2011). A positive developmental history is likely to have contributed to their enhanced resilience (Lyubomirsky et al., 2005; Steptoe et al.t, 2005; Graham, 2008; Deaton, 2008).

Happiness is other people Happy people have better relationships. They know how to build rich social networks. They tend to have more friends. They are also likely to be happily married and less likely to divorce (Stack and Eshelman, 1998; Steel and Ones, 2002). Although the ability to create strong social networks is not a guarantee of happiness, it appears to be a key ingredient in its pursuit.

A dispositional patchwork There are many more attitudinal dimensions that help make happy humans. Action- oriented people (doers) make things happen and have an altruistic streak (Ricard, 2006; Dunn et al., 2008). They are willing to donate their time and money to charitable causes, having discovered that money can buy happiness, paradoxically, by giving it away. Happy people also have a capacity for forgiveness and gratitude, 5 and a good sense of humor. They live more in the moment and consciously “seize the day.” Their values and behavior are closely aligned. Finally, happy people are more likely to have a religious faith or a spiritual orientation (Diener et al., 1995; Diener et al., 1999). Faith may give them the strength to cope with life’s difficulties and hope for something beyond death. Equally importantly, belonging to a faith tradition creates a natural support group.

This wide variety of happiness dimensions underlines its complexity and elusiveness. Happiness is not an enduring state: it is made up of short moments in time, here one minute, gone the next. The more we pursue it, the more it slips away. It is not a destination to arrive at, but is made up of the experiences we have on the journey. In many instances, happiness and sadness run parallel to each other. It seems that in order to experience real happiness, we also need to have been touched by real sorrow, so that we can recognize happiness for what it is in the intervals between periods of unhappiness.

The hedonic treadmill Our experiences of happiness and unhappiness are constantly shifting. When good or bad things happen, our initial reactions are usually strong; however, they modify over time and we eventually revert to our former emotional state. A large body of research supports this common pattern. Brickman et al. (1978) examined the cases of lottery winners and quadriplegics. After experiencing a short surge of happiness, lottery winners grow accustomed to their new wealth and no longer derive significant happiness from their good luck. The same observation can be made of quadriplegics. As they grow accustomed to their injury, their enjoyment of everyday pleasures gradually increases.

These extreme examples indicate that we can manufacture happiness. Some social psychologists even make a distinction between “natural” happiness (getting what we want) and “synthetic” happiness (what we make when we don’t get what we want) (Gilbert, 2006). This ability implies that we are very good at managing 6 disappointment. We seem to be hard-wired to operate a hedonic treadmill, generating a modicum of happiness regardless of the circumstances. We have an unconscious capacity to adapt when real outcomes are less than ideal and to appreciate what we have. Any regrets we have at not getting what we want are neutralized through unconscious rationalization. This is what Immanuel Kant meant when he wrote that “[h]appiness is not an ideal of reason but of imagination.”

The set point of happiness Evolutionary psychologists use the image of the hedonic treadmill to explain why increases or reductions in happiness (after significant events) eventually return to a set point (Brickman and Campbell, 1971; Frederick and Loewenstein, 1999; Mancini et al., 2011). Any gains in happiness are temporary, because we quickly adapt to the change. Regardless of what happens to us, our level of happiness will return to our emotional and psychological baseline.

These intra-psychic dynamics suggest that without the existence of the hedonic treadmill, our species would have become extinct. Our expertise in rationalizing is our survival aid. The human brain has the unique ability to project into the future (thanks to the functioning of our frontal lobes) and the outlook, from wherever we stand, is grim. Therefore, for the purpose of our psychological health and continued survival, it’s essential for Homo sapiens to have a happiness baseline that’s set to positive.

Given the evolutionary element of this hedonic treadmill, we can assume that genetics has a major influence on happiness. Some researchers suggest that the inheritability of feeling well has a set point of 50 percent. There are two further variables to consider, as well as genetics (Lyubomirsky, 2008, 2014; Seligman, 2004, 2011). The first is our personal circumstances, the events that take place in our life. Childhood trauma or post-traumatic stress (following extreme experiences, like war or injury) will be counterproductive to the subjective experience of happiness. The

7 second, which is given prominence by positive psychologists, is our intentional activities, estimated to have a set point of 40 percent (Lyubomirsky, 2008, 2014).

These studies suggest that we have the capacity to make choices that will affect out happiness. Much of our capacity for happiness lies within our power to change. This means that if he felt so inclined even Carl has it in himself to be a great deal happier.

The societal-personality interplay

The hedonic treadmill helps us to keep going, bounce back, and start again in spite of life’s challenges. It gives us the strength to overcome traumatic events and move on with renewed courage. It is even institutionalized in the US Declaration of Independence, which includes “the pursuit of happiness” as one of three “unalienable rights” (along with life and liberty).

But it’s easy enough to declare that people have a right to pursue happiness; it is no guarantee that they will achieve it. It can be an uphill struggle to work the hedonic treadmill effectively, if the available data about our mental health can be believed.

Beyond personality What makes people happy or unhappy is not merely a matter of personality. It is also related to the kind of society we live in and the various macro forces that influence our lives. How do these influence our general state of happiness? How do personality dimensions and social forces affect one another? And what makes for happy societies?

There is a highly complex interplay between personality and environment. A large body of research has shown that social forces have a significant effect on our attitude towards life, for good and for bad (Veenhoven, 1984; Frey and Stutzer, 2002; Andrews and Withey, 1976; Di Tella and MacCullock, 2008; Blanchflower, 8

2009). Statistics reveal the harsh reality about our failure to pursue happiness. According to the World Health Organization, 1 out of 20 people suffers from depression, a global number of 350 million, and in the US 1 out of 10 Americans aged 12 and over is taking anti-depressant medication.

These unhappy statistics have even encouraged the publication of a World Happiness Report that takes into consideration factors like real GDP per capita, life expectancy, social support, perceived freedom to make life choices, freedom from corruption, and generosity. The latest “winner” in the rankings is Switzerland, while Tajikistan sits at the bottom of the list (SDSN, 2015).

Not surprisingly, the countries with the highest levels of unhappiness are conflict- ridden, affected by economic, political or social upheaval, or a combination of all three. In comparison, direct democracy, and the possibility of influencing our society and government, enhances our quality of life. We can deduce from the World Happiness Report and similar surveys that basic freedoms are essential for happiness.

The downside of materialism Valuable as the World Happiness Report is, the contributing factors it lists may not be sufficiently nuanced to capture the complexity of what makes for human happiness. However, it does suggest that a nation’s social structures (human capital) and environmental resources (natural capital) may be more influential in determining happiness than more material factors. For example, many happiness calculations omit variables like ecological awareness. Concerns about the health and welfare of the land, air and water pollution, and access to nature, have to be added to the happiness bundle (Welsch and Kuehling, 2009).

Something the World Happiness Report fails to highlight is that wealth or financial security are not the most important determinants of happiness. Many studies have shown that it’s incorrect to assume that people with more money are happier than 9 others (Hagerty and Veenhoven, 2003; Kahneman et al., 1999, 2004; Graham, 2009; Layard, 2010). The correlation between income and happiness is modest. Our happiness starts to level off, in spite of a growing GDP. It seems that after we have sufficient resources to fulfill our basic needs (food, shelter, clothing), having more money becomes less important. Beyond a specific annual per capita income, happiness becomes a function of non-material factors. Personal happiness does not necessarily increase along with personal wealth.

In fact, it’s possible that adding money to money may lead to our experiencing less happiness. Materialistic values may detract from personal happiness and well-being (Lane, 2000; Kasser, 2002). A preoccupation with material goods can become personally harmful. Even if positive feelings are induced by material acquisitions, they are generally short-lived. People can become bound to an acquisition treadmill (propelled by feelings of unhappiness and insecurity), piling acquisitions on acquisitions. Acquisitiveness is associated with a wide range of problems of psychological and physical health.

Within the happiness bundle, material wealth should be viewed as a relative concept. Even people who have considerable wealth and a high income feel compelled to compare themselves to others who are better off. As social creatures, our sense of self-worth and happiness derives in part from comparisons with others—groups or individuals we feel we should be equal to, or strive to emulate. Perceived prosperity is relative, as we only feel prosperous if we do better than the people with whom we compare ourselves.

Where there are considerable differences, there are likely to be greater levels of unhappiness. Serious income imbalances between layers of society will have a negative affect on societal happiness. Various studies have pointed out that happiness is lowest in countries that have the largest gaps between rich and poor, and higher in countries with smaller differences. This illustrates the importance of

10 social comparisons in happiness calculations (Lucas and Schimmack, 2009; Wilkinson and Pickett, 2009).

It might even be said that a high level of materialism lowers our satisfaction with life. Valuing money over other things—like relationships, personal interests, or a spiritual life—can leave us dissatisfied. As materialistic people often tend to be unhappy, a wise life strategy would be to value relationships and other aspects of life over the pursuit of wealth.

Happiness and work Happy workplaces are beneficial not only to employees but also to employers, organizations, the wider community, and society as a whole. Unemployment obviously has a negative effect on happiness and a devastating effect on life satisfaction. It triggers depression, loss of identity, and hopelessness, and has a negative effect on physical health (Warr, 2009; Winkelmann, 2009; Helliwell and Huang, 2014).

But happiness can also be elusive for people who have work. Happy workplaces are dependent on the leadership and culture of an organization (Pfeffer, 2010). Because happiness can be contagious, leaders who radiate happiness will be more effective. When people love what they are doing, they are likely to be successful, and they will be more productive, more creative, and produce higher-quality work, all which benefits the bottom line (Oswald, 1997; Wright and Staw, 1998; Van Praag and Ferrer-I-Carbonell, 2004; Lyubomirsky et al., 2005; Warr, 2009; Oswald, Proto and Sgroi, 2014). Although success is not the key to happiness, happiness can be the key to success.

The pursuit of happiness

So, to what extent can we pursue happiness? Can we increase our likelihood of being happy? If so, what steps can we take? What hope is there for Carl and others like him?

Our freedom to engage in intentional activity suggests that there are several things we can do to improve our state of happiness. Happiness studies show that as far as possible we should avoid dwelling on the negative aspects of life. Unhappy people could make a greater effort to manage negative thoughts and emotions (anger, spite, envy, etc.) and try to foster positive thoughts and attitudes (empathy, serenity, and gratitude) (Haybron, 2005, 2008; Seligman et al., 2007). Carl’s negative mindset suggests that he’s not going to find it easy to make these changes and is going to have to do some homework. So far, he’s been busy counting his troubles rather than his blessings, so he could make a start by addressing how to lead a more purposeful life. He could look for activities that fit better with his values and interests. Currently he is caught in an unhappiness trap, which the American humorist Don Herold described as “not knowing what we want and killing ourselves to get it.” Carl could also consider ways to create happy moments, on the basis that a series of happy moments is part of Aristotle’s prescription for a fulfilled life. Instead of being the passive victim of his negativity, and resorting to getting drunk as entertainment, he could try to be more active and literally do things. While action may not always bring happiness, there can be no happiness without action.

Carl should also work at building and rebuilding relationships, so that he can spend quality time with friends and family. This type of effort is essential. Once he becomes more positive in his way of relating to others, people will be more attracted to him, and he will discover that happiness is a people magnet. Part of this rebuilding process might involve distancing himself from people who are stress inducers or otherwise unpleasant. Sometimes it is no bad thing to end a

12 dysfunctional friendship. It can stop us returning to a place we shouldn’t have been in in the first place.

Counting our blessings—making a conscious effort to practice gratitude and be thankful for the good things in our life—can work wonders for our mental health. Happiness is often a by-product of an effort to make someone else happy. If Carl could make himself reverse the lens through which he views his life, he might surprise himself with what he sees. This exercise might also help him to let go of past hurts and practice forgiveness. Experience has shown that the best form of retaliation against the wrongs we suffer is not revenge but the ability to regain our happiness despite them. Carl might feel much better if he stopped fretting over social comparisons and tried to enjoy his own life without comparing it to others.

A happiness regime The paradoxical nature of happiness means that there is no set recipe for achieving it. However, there are some things we can do—intentional activities—to increase and sustain happiness. Carl could begin a happiness regime, practicing the following activities on a daily basis:

 Exercise: have mini workouts  Ensure he has a good night’s sleep  Try to do three kind things every day  Write a note of gratitude to a person who has had a positive affect on his life  Try to have people around who make him feel good  Get out into nature in some way (a walk in the park)  Disengage from digital devices for a significant period  Take the time to practice conscious self-reflection (meditation)  Write a note to himself about things that go well during the course of the day.

Happiness is an inside job It can be liberating to discover that while we cannot always be happy, we can create happiness, for ourselves and for others. And it is well worth the effort: happy people are healthier people who function at a higher level and use their personal strengths, skills, and abilities to contribute to their own and others’ well-being. Happy people are more likely to contribute to the moral fiber of society in diverse and beneficial ways—economic, social, moral, spiritual, and psychological.

Our degree of personal happiness is heavily influenced by the choices we make, our inner attitudes, the way we approach relationships, our personal values, and our sense of purpose. As mentioned before, we are largely responsibility for creating our own happiness. It’s important to realize that the happiest people don’t necessarily have the best of everything; they are the people who make the best of everything.

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