Money can’t buy happiness — but lack of it can certainly make you progressively miserable, says one Nobel Prize-winning economist.
Daniel Kahneman, one of the founders of the now-popular field of behavior economics, delivered a fascinating TED talk earlier this year entitled “The Riddle of Experience vs. Memory,” and got into an interesting discussion with TED host and curator Chris Anderson. (Hat tip to Gates VP blog via My Money Blog.)
Arguing that experience is essentially divided into the “experiencing self” and the “remembering self,” Kahnemen suggests that happiness is essentially an act of deftly balancing the two. (They don’t always match up, it turns out.) Here’s Kahneman:
“We know something about what controls satisfaction of the happiness self. We know that money is very important, goals are very important. We know that happiness is mainly being satisfied with people that we like, spending time with people that we like. There are other pleasures, but this is dominant. So if you want to maximize the happiness of the two selves, you are going to end up doing very different things. The bottom line of what I’ve said here is that we really should not think of happiness as a substitute for well-being. It is a completely different notion.”