When the economic historian Richard Easterlin surveyed these surveys in a classic 1974 paper, he formulated what has come to be known as the “Easterlin paradox” Basically, above a very low level economic growth does not seem to improve human welfare. Later evidence confirms his observation. Americans were no more likely to describe themselves as happy in the 1990’s than they had been in the 1940’s. Even the Japanese, who went from near-third-world conditions to widespread affluence between the 1950’s and the 1980’s, did not become happier. Mr. Easterlin argued that the reason economic growth doesn’t make us happier is that people judge themselves largely by their position relative to other people.

Easterlin Paradox