Contentment Is Natural Wealth; Luxury Is Artificial Poverty

In 1974 the economist Richard Easterlin published a puzzling finding. Within any country, richer people reported being happier than poorer ones, yet when he compared countries over time, the average happiness of a nation did not seem to rise as it grew richer. Americans in the 1970s were far wealthier than their parents had been, but they were not noticeably happier. The result became known as the Easterlin paradox, and it gave empirical shape to an old moral intuition. The saying attributed to Socrates, that contentment is natural wealth and luxury is artificial poverty, claims that desire, and not possession, decides whether a person is rich.

The logic is simple. Wealth can be measured in two ways, by how much a person has and by how much he wants. A man with modest means who wants little is richer, in the sense that matters to him, than a billionaire who feels that he lacks a bigger yacht. Luxury, on this account, manufactures want. Each new comfort becomes a necessity, and the person who has become accustomed to ten things feels poor when he is left with nine. Luxury is therefore called artificial poverty because it creates a lack that nature never imposed.

Indian philosophy has long made this point. Patanjali listed santosha, or contentment, among the observances of the yogi, and the principle of aparigraha, or non possession, is central to Jain and Buddhist ethics. Gandhi is widely credited with saying that the earth provides enough to satisfy every man's need but not every man's greed, a thought that he turned into a way of life, with his spun cloth and a handful of possessions. In ancient Greece, Epicurus lived with his friends in a garden on bread, water and a little cheese, and argued that natural desires are easily satisfied while empty ones never end.

Modern economics gives these claims a mechanism. In 1899 Thorstein Veblen described conspicuous consumption, in which the wealthy buy goods not for their use but to show their status. The effect spreads downward, since each class imitates the one above it, and the standard of what counts as enough keeps rising. Behavioural research shows that people care greatly about relative position. Surveys have found that many would choose a smaller income if it left them better off than their neighbours than a larger income that left them behind. In such a race everyone runs faster and nobody gains ground. This is exactly what artificial poverty would look like.

In such a race everyone runs faster and nobody gains ground.

Advertising understands this better than philosophy does. An industry that spends hundreds of billions of dollars a year on persuasion exists to convert a satisfied customer into a wanting one, and it succeeds by suggesting that a life without the product is a lesser life. The psychologist Tim Kasser has reported that people who place heavy weight on money, image and status tend to report lower wellbeing than those who value relationships and community. The finding is a correlation and cannot prove that wanting causes unhappiness, but it fits what the old teachers claimed.

Some governments have taken the idea seriously. Bhutan's fourth king, Jigme Singye Wangchuck, is credited with declaring in the early 1970s that Gross National Happiness mattered more than Gross National Product, and the country has since built a policy framework around wellbeing, culture and the environment. Whatever one thinks of the results, the idea has influenced the way international bodies think about progress, and the United Nations now publishes a yearly World Happiness Report.

Yet the evidence on money is more complicated than the saying allows. In 2010 Daniel Kahneman and Angus Deaton reported that emotional wellbeing in America rose with income only up to about seventy five thousand dollars a year, while the judgement people made of their lives continued to rise. In 2021 Matthew Killingsworth found, with better data, that happiness kept rising with income, even among the rich. Kahneman and Killingsworth then worked together and reported in 2023 that both were partly right. For most people happiness continued to rise with income, but for a minority who were already unhappy it levelled off. Money, it seems, does buy something, though not everything, and not equally for all.

The sharper objection comes from Amartya Sen. He noticed that people who are poor, or oppressed, often learn to want little, and that their reports of contentment cannot be taken at face value. A woman who has never been allowed to study may say that she does not want an education, and a labourer who has never had medical care may say that he is satisfied. Sen called this adaptation of preferences. To praise contentment as natural wealth is, in such a case, to excuse the conditions that taught the person to want so little. Complacency can be dressed up as wisdom, and the praise of simple living has too often been preached by people who were not themselves living it.

Economists also point out that wanting more has been the engine of progress. Bernard Mandeville argued in his Fable of the Bees in 1714 that the vices of vanity and luxury kept trade, craft and employment alive, and that a society of perfectly contented people would stagnate. The comforts that now save lives, such as clean water, refrigeration and medicine, began as luxuries of the few. A world that had stopped at contentment would have had no vaccine, and the person who is content with a thatched hut has no reason to build the clinic.

The saying therefore holds best as a warning and fails as a rule. It is true that desire can outrun satisfaction, and that the pursuit of status can leave a person poorer in time, attention and peace. It is not true that all wanting is artificial, since a child's wish for a school is not a vanity. The harder question is where necessity ends and luxury begins, a line that has moved with every century and every culture. A smartphone was a luxury twenty years ago and is now a requirement for a job application. Someone has to draw the line, and whoever draws it holds a power over the poor and the rich alike, which the old saying, in its calm certainty, does not say who should have.