I Hate the New York Times
I read an annoying essay in the New York Times recently with the clickbait-y headline “The Rich Are Not Who We Think They Are. And Happiness Is Not What We Think It Is, Either.” Deeply interested in wealth and happiness, I pressed on. Instead of insight, I found an excellent example of the perils of our “data-driven decision making” obsession. Data may remove ignorance, but it does not make us wise, and decisions require wisdom.
The essay was adapted from the book “Don’t Trust Your Gut: Using Data to Get What You Really Want in Life,” by Seth Stephens-Davidowitz. I have not read the book. Maybe it’s good. The adapted excerpt was silly.
Identifying Wealth
The author cites a 2019 economic study of tax data that identified the most common ways people produce an income in the top .1% of earners, or about $1.6 million per year. The answer was “own something,” like a car dealership or liquor distributorship. Do we need research on IRS returns to tell us it’s better to be an owner than to earn a wage? Our economic system is called “capitalism,” not “laborism.”
I also question whether IRS tax returns are a good source to identify who is rich, since so many forms of wealth do not appear on tax returns. It’s possible to borrow money against an asset like stock and live off that money without having to sell the stock or report the loan as income. You can live rich without appearing rich on your taxes. Tax returns are good at identifying who has a high income, but bad at identifying who is actually rich.
Using Wisdom to Discern a Good Path
Deciding what to do to earn a living and what to do to be happy requires insights that can’t be found on tax returns. To make those decisions well, you have to define what “the good” means to you, then discern the option that most advances the good. That’s what wisdom is; the ability to pick the next right thing to do. Data is helpful to define options, but not always.
Suppose you want to decide if we should do anything about climate disasters. A quick Google search can tell you that 20 different billion-dollar weather and climate disasters happened in 2021. Now you know how many disasters there were, but you have no idea what that means. Numbers have meaning when they are shown in relation to something. The number 20 by itself means nothing, yet that’s how we consume a lot of data — in isolation.
Data is very helpful for showing us when our preconceptions and biases are wrong, but it takes wisdom to change our behavior. We ignore data we don’t like because we don’t have the wisdom to know what to do with the data. Good decisions are easier to make with good data, but not impossible to make with bad data. Every leader has to struggle with making decisions with imperfect data. No matter how much good data the decider has, good decisions are the result of luck if the decider has no wisdom,.
The Diminishing Returns of Wealth and Happiness
Stephens-Davidowitz went on to site a study by Matthew A. Killingsworth about self-reported happiness and its relationship to income. According to Killingsworth’s research, more money makes us happier, but it takes a lot more money to make us just a little happier. Like that first $1 million? It may take another $2 million to get the same jolt. Any addict could have told the researchers this, but it’s good they did the math.
The insight Stephens-Davidowitz is celebrating in the Killingsworth research is that we can get happier from more money even after making $75k a year, which contradicts previous research, but this is hair splitting. The point of diminishing returns begins around $75k a year and gets worse with the more money you have. The money-to-happiness relationship isn’t what bothers me, it’s the researcher’s implied understanding of happiness:
It’s possible to learn what makes us happy by asking other people.
Happiness is nothing more than the transitory feeling we have when we’re doing something amusing.
There is not a good word in English for the kind of happiness that comes from wisdom and virtue, which is the only kind of happiness I’m interested in. The word Aristotle used was “eudaemonia” which is typically translated as happiness, but I like to think of eudaemonia as a happiness worth dying for, something much larger than amusement.
How to Discover “True Happiness”
Stephens-Davidowitz ends his article with a tongue-in-cheek summary of happiness research: “The data-driven answer to life is as follows: Be with your love, on an 80-degree and sunny day, overlooking a beautiful body of water, having sex.” This is a joke, but it’s illustrative of the simplemindedness infecting our data-driven decision making mantra.
What are we to say to the people of Ukraine, who are dying for something much different from Stephens-Davidowitz prescription for happiness? Are they being foolish? After all, the activities Stephens-Davidowitz cites as making us happy are possible under totalitarianism just as they are in a free state. The people of Ukraine are fighting for their freedom, their country, their eudaemonia, their happiness rooted in virtue and wisdom, a happiness worth suffering and dying for. That’s the wisdom-driven answer to life.