The third reason why you’re unhappy is based on our past, based on our past experiences. This is called the inter-temporal gap.
And we’re unhappy when our past reality is better than our present reality.
Take two people who have the same average lifetime income. There’s person A whose income decreases over their lifetime, person B whose income increases. Now, research shows that you’re always happier if you’re person B, if you have that increasing income, even though the average might be the same. It’s because of something that psychologists refer to as anchoring.
We compare to our past, and if you’re constantly improving, constantly exceeding expectations, constantly moving forward, you’re generally happy. The reverse is true if you’re person A.
And so what does this mean in terms of raising children?
I think often we tend to spoil children; we tend to give them everything to give them the best start in life.
But often the best intentions don’t always lead to the best outcomes.
Yes, we should support children, but if we give them everything, it’s much harder for them to have a positive inter-temporal gradient – it’s harder for them to improve over time throughout their life and that actually potentially undermines their happiness.
While I’m talking about parenting, I think another problem in our society is that we tend to tell children that they’re special, that they’re unique, that they’re one-of-a-kind, that they’re amazing.
We tell them they can be Prime Minister or President, that they can be the next Mark Zuckerberg. We tell them that they’ll be Beyonce one day.
What this means is that we raise their expectations. And so when that child gets a normal job, when they start a business, and it fails, like most do, when they’re seeing career peaks with a rendition of single ladies in the shower, they’re disappointed, they’re unhappy, their expectations haven’t been satisfied.
Yes, we want to give children self-belief, but we don’t want to delude them, and we don’t want to delude ourselves. So what we see is that our happiness is largely determined by expectations. Our expectations are largely determined by what we consider to be normal.
And what we consider to be normal is largely based on our imagination, based on others around us, and based on our past. And so we have these constant battles:
the battle between our imagination and our reality;
the battle between the reality that we experience and what we think or perceive that others experience;
the battle between our reality and our past reality.
How can we win these battles?
I think the first challenge, the challenge for entrepreneurs and businessmen, for parents, for legislators, for magazine editors is to take happiness seriously, to take expectations seriously.
I think, often we relegate happiness to the world of art, not science.
We dismiss it, we think of it in terms of hippies rather than businessmen.
What we want is for entrepreneurs to focus on actually improving contentment, not just increasing consumption.
In terms of winning the imagination battle, I think it’s important that we make it known to content providers, the importance of actually having realistic representations of images, people, and places and events. And we might even go so far as to ban things like digital enhancement in ads.
In terms of winning the interpersonal battle, I think it’s important that governments prioritize income equality and that we learn to compete against ourselves rather than against others.
And in terms of that inter-temporal battle, I think it’s important that we support kids, encourage kids, but also make them realize when it’s impossible and not to give them completely unrealistic expectations.
We seem to have been seduced into a way of life that almost conspires in every way against the most basic level of contentment. We’re terrible predictors of what will make us happy.
We’re terrible predictors of happiness because the way in which we rationalize, the way in which we make decisions is optimal on the basis of actual levels, absolute levels, but the way in which we feel is based on relative outcomes, based on expectations.
It’s expectation that explains why a bronze medalist can be happier than a silver medalist, because the silver medalist imagines coming first, the bronze medalist imagines coming fourth.
It’s expectation that explains why, often, lottery winners aren’t that happy; their happiness doesn’t last because they don’t have that increasing level of satisfaction throughout their life.
It’s expectation that explains why you can be happier with an income of 40,000 to an income of 50,000.
We often think of happiness in isolation, in a vacuum, when in reality our happiness is far more complicated; it’s far more intertwined with our community, our imagination, and our past.
And it’s important that we think carefully about how our minds work, how our feelings work, how our expectations work. And it’s important that we change the way in which we make decisions so that our thinking process matches our feeling process.
For entrepreneurs that want to improve the lives of others, as well as for people that want to be happy, I think the first step is understanding why we’re unhappy.
And I hope that the next time, if ever it happens, that your decision-making prowess. I hope you come out on top.