The Hedonic Treadmill

Money buys happiness, right? A lot of you would take exception to this, and argue that it’s more complicated than that, but there’s no question that there is a temporary surge in satisfaction that accompanies acquiring new things. When we acquire shiny new possessions, a flood of the neurotransmitter dopamine surges through a powerful circuit hardwired into our brains that is specifically designed to entice us to repeat behaviors that are rewarding, such as buying new toys, eating palatable food, having sex, and being intoxicated.

Often, this primitive reward circuit is in competition with the more sophisticated executive function of the brain’s frontal lobes – you know, the part of your brain that is responsible for complex decision making, planning, and resisting temptation. This is also the part of your brain that can generate a deeper satisfaction from intellectual pursuits and meaningful social relationships. There are well-documented cases of what happens to behavior and personality when this most human part of our brain is removed or damaged: the human becomes more animal-like.

I would argue that the Paradox of Wealth – the miserable financial mismanagement of high-income professionals – is due in part to the conflict between these two systems. Repeated attempts to acquire new, better, and more things leads to a crescendo of excessive spending without a concomitant increase in happiness: the Hedonic Treadmill (i.e. Hedonic Adaptation).

The problem with the dopamine-mediated primitive reward system is that it’s temporary. A little hit of euphoria, then it’s gone. A variety of intrinsic (food, sex, drugs) and extrinsic (buying a new car, taking a vacation, even finding a new romantic partner) stimuli result in a powerful but temporary surge of pleasure. When the surge is gone, you’re more or less back to baseline.

Who hasn’t looked towards the future and imagined how happy you’ll be when you finally get your dream house with the dual vanity and the huge backyard, or your dream car that can do zero to 60 in 2.3 seconds, or finally started traveling the world with your spouse once the kids are out of the house? For sure, each of these things creates a temporary increase in happiness. The problem is that our brain is amazingly adaptable, and is designed to rapidly adjust to new conditions. Once that happens, the new conditions are no longer new, and thus they don’t trigger that reptilian dopamine reward pathway any more.

Even very large-scale novel events that you’d expect to permanently alter your level of happiness fade with time. A study found that lottery winners and paraplegics both eventually returned to the same level of happiness as before their life-changing event. Incredibly, the lottery winners were not any happier than the paraplegics. This may suggest that most people just have a baseline intrinsic level of happiness, which is slightly modifiable by attitude and outlook, but not necessarily by more stuff.

There’s an obvious exception for homelessness, starvation, and torture, but in general, once you’ve satisfied life’s basic requirements, adding further possessions and conveniences has not been shown to definitively increase happiness. The thing is, people who make impulse purchases are not bad people. They’re doing exactly what millions of years of evolution has primed our brains to do to help our mammalian forbears survive in the wilderness – seek rewards from things that improve our survival. This impulse has just been twisted and skewed by our species’ recent departure from being bound by the daily struggle for survival against nature. In fact, by ceding control of your financial planning and purchase decisions from the highly-evolved executive centers to your primitive reward centers, you’re virtually guaranteed to increase your misery and suffering rather than your happiness over the long term.

Hopefully this helps you see that the struggle to get your finances in line is a natural struggle against your more primitive neurological systems, and being more deliberate and calculating in your purchasing and planning is really taking advantage of the most advanced firepower in your brain – which helps you not do stupid things with your money.


Do you agree that people have a baseline happiness? Has money brought you happiness? Share your thoughts and experiences below.

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