August 15, 2002

Sated?

At what level of material wealth does one become, completely, totally, utterly sated? How much stuff--how many things--how much power to buy and control does one have to have before one can say "enough is enough," stop playing the game for increased wealth, and start playing some other, different game?

Here is discouraging psychological evidence from publishing magnate and Rolling Stone founder Jann Wenner. It turns out that--at least as far as he is concerned--wealth in nine figures isn't enough yet to make him not care...


Premium Blend: A group weblog from the editors of Corante: What's your number? How much is enough? It may be more than you think: ''I had a fascinating conversation recently with Jann Wenner, the founder of Rolling Stone. Here's a guy who's probably got three or four hundred million dollars--he's got a Gulfstream II and a house here and a house there, and you can't imagine what trappings he could want from the next level. But he's got this gleam in his eye because he's telling me about how he spent the weekend with Paul Allen. He said that Paul Allen didn't have a GII, he had two 757s. They flew over to, like, Nice, and then they got into Paul's helicopter, which took them to Paul's boat, which stays sort of off the coast of southern France. And I could tell that Jann was picturing himself at the next level--the multi-billionaire. And I was fascinated by that because, holy shit, if that's not enough for Jann, why do I think I'm going to be able to get off the conveyor belt?''

Posted by DeLong at August 15, 2002 08:10 PM | TrackBack

Comments

I have to admit, it would take an ungodly sum of money to sate me. Then again, I'd really like to own a Major League Baseball team and run it to win, damn the costs. That means, among other things, building my own $450 million stadium without government subsidies.

Yeah, yeah, I could do all of that on less money if it weren't for the damned 60/40 debt rule, but I won't be able to do away with that unless about 22 of the rest of you also come up rich and will vote with me.

Posted by: J. Michael Neal on August 15, 2002 08:52 PM

Well, if we have 2% real growth, society will be producing and have annual real income of

7 as much as present income in 100 years,

52 as much in 200 years,

380 as much in 300 years,

2754 as much in 400 years,

19956 as much in 500 years,

398264651 as much in 1000 years

A few people should be satiated by then.

Posted by: Bobby on August 15, 2002 09:37 PM

But this is not about absolute goods, satiation, where the indifference curve runs into fender-benders with one or another coordinate axis. It's more an issue of positional or relative goods ... keeping up with the Jones's, besting them, and going on to out-consume the Knickerbocker's, Levy's, Machiarelli's, Nilsson's, Okiyama's, and on through the Zygax's and so on into the Omega Quadrant ... and this is most likely a deep-seated dynamic better explained by evolutionary psychologists than Pareto optimists.

Posted by: RonK, Seattle on August 15, 2002 09:39 PM

You are right about that (I actually have Pinker's How the Mind works coming in the mail as we speak). But in a world of $398264651 a year incomes, why must the keeping up with the Joneses competition be about accumulating the nicest yacht, house etc? Why won't some people compete in, say, sports or some scholarly or scientific achievement? Maybe instead of buying a Mercedes people will buy more leisure during which they can do other things. Who knows?

Posted by: Bobby on August 15, 2002 10:11 PM

Two of the finest men I ever knew left estates worth hundreds of millions of dollars, and they both died a few years prior to the late 90s boom, when 500 million was real money ( I guess it is again, though). One drove a Pontiac sedan until he died, and the other had a "vacation property" that featured an outhouse. They both employed thousands of people, which enabled tens of thousands of children to go to college, and they also mentored countless others in their own entrepreneurial ventures, along with being generous with time and money to charities. They were both competitive as hell (which is what I would guess is driving Mr. Wenner's display of apparent envy), but all they really needed was to provide themselves with the knowledge that they had proven to be superior in the endeavors they chose. The stuff that the money could buy was really secondary, as evidenced by what they chose to spend money on. I suspect that what drives people at this level is an insatiable desire to win, and with some, perhaps like Wenner and others, the desire to display more and more is an ancillary one; they simply want as many people as possible to know that they have won.

Posted by: Will Allen on August 15, 2002 10:18 PM

From David G. Myers, author of "The Pursuit of Happiness" and psychologist at Hope College:

"...[I]n countries where nearly everyone can afford life’s necessities, increasing affluence matters surprisingly little. The correlation between income and happiness is "surprisingly weak," observed University of Michigan researcher Ronald Inglehart in one 16-nation study of 170,000 people. Once comfortable, more money provides diminishing returns. The second piece of pie, or the second $100,000, never tastes as good as the first.

Even lottery winners and the Forbes’ 100 wealthiest Americans (when surveyed by University of Illinois psychologist Ed Diener) have expressed only slightly greater happiness than the average American. Making it big brings temporary joy. But in the long run wealth is like health: Its utter absence can breed misery, but having it doesn’t guarantee happiness. Happiness seems less a matter of getting what we want than of wanting what we have...."

Posted by: on August 16, 2002 03:04 AM

Hungry Heart - Bruce Springsteen

Got a wife and kids in Baltimore Jack

I went out for a ride and I never went back

Like a river that don't know where it's flowing

I took a wrong turn and I just kept going

Everybody's got a hungry heart

Everybody's got a hungry heart

Lay down your money and you play your part

Everybody's got a hungry heart

Posted by: Robert Schwartz on August 16, 2002 06:07 AM

OK, laugh if you will...

I would be happy with 10 million dollars. Sure, more would be nice, but I've done the math, and I wouldn't have to work anymore - I could spend time with my friends and family... the people I love.

I don't want a yacht. I don't want 37 mansions. I do want a private plane (so I can visit my firends and family who are far away). I want one moderately large home (1 bedroom for each child, a FEW extra rooms - my parents had a house that was too big, and cleaing it was such a pain!) and perhaps a few very small homes (like one bedroom, maybe 2) in strategic locations for visiting people. I want a car with good gas mileage and low maintenance (because I don't want to mess with it). I don't want something flashy - in gact, a mediocre paint job with dents, dings, and hail damage is A-OK with me.

The problem is that these people don't know what would make them happy - they think money itself (material possessions) will make them happy. There are vanishingly few people (essentially none) for whom possessions themselves gives enduring happiness. I want money to enable something else that I know makes me happy, so when that something else is enabled, I have enough... more would always be nice (I enjoy picking up the tab for people, something I can almost never afford these days) but not necessary.

Posted by: Deoxy on August 16, 2002 07:02 AM

If I recall, a lot of MicroSoft executives cashed out around the $300 million mark. It sure seems, if it's just what money can buy, it wouldn't take more than that. Heck, I grew up on a farm in Ohio with no electricity or running water. I'd settle for a third of that.

Posted by: Bob Hawkins on August 16, 2002 07:24 AM

Whis is this sad or discouraging? The harder this guy works, the more opportunities we all have to trade with him. Assuming he doesn't capture all the surplus, this is to our benefit. It seems to me that we're lucky the rich don't get easily sated, otherwise a lot of very productive people would be completely idle.

Posted by: Ryan Nunn on August 16, 2002 07:44 AM

>>It seems to me that we're lucky the rich don't get easily sated, otherwise a lot of very productive people would be completely idle.<<

You seem to regard productivity as important independently from satisfaction, a conclusion which perhaps ought to be argued for rather than assumed, in context.

Posted by: Daniel Davies on August 16, 2002 08:22 AM

The point is that stasis is not an attractive option. If human society is going to improve, it needs to become wealthier, even wealthy enough to (yeah, it sounds ridiculous) eventually live outside the bounds of this earth. In order to generate the wealth needed for such dynamism, driven, acquisitive, people are essential. This isn't to say, of course, that this is the only kind of people who will be needed. Variety will indeed be the required spice.

Posted by: Will Allen on August 16, 2002 08:48 AM

>>It seems to me that we're lucky the rich don't get easily sated, otherwise a lot of very productive people would be completely idle.<<

I have no idea what this means. Curious statement.

Good thing the poor have to work to survive, otherwise a lot of very productive people would be completely idle.

Posted by: on August 16, 2002 09:04 AM

Fool, of course the rich are ever so much more productive than the rest.

Posted by: on August 16, 2002 09:07 AM

Re: >>>>It seems to me that we're lucky the rich don't get easily sated, otherwise a lot of very productive people would be completely idle.<<

I have no idea what this means. Curious statement.<<

It is an echo of a passage from Adam Smith's other book, the _Theory of Moral Sentiments_:

The poor man's son, whom heaven in its anger has visited with ambition... admires the condition of the rich. He finds the cottage of his father too small for his accommodation.... He sees his superiors carried about in machines.... He feels himself naturally indolent, and willing to serve himself with his own hands as little as possible; and judges, that a numerous retinue of servants would save him from a great deal of trouble. He thinks if he had attained all these, he would sit still contentedly, and be quiet, enjoying himself in the thought of the happiness and tranquillity of his situation. He is enchanted with the distant idea of this felicity.... in order to arrive at it, he devotes himself for ever to the pursuit of wealth and greatness. To obtain the conveniencies which these afford, he submits in the first year, nay in the first month of his application, to more fatigue of body and more uneasiness of mind than he could have suffered through the whole of his life from the want of them. He studies to distinguish himself in some laborious profession. With the most unrelenting industry he labours night and day to acquire talents superior to all his competitors. He endeavours next to bring those talents into public view, and with equal assiduity solicits every opportunity of employment.... Through the whole of his life he pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquillity.... Power and riches... are enormous and operose machines contrived to produce a few trifling conveniencies to the body.... They are immense fabrics, which it requires the labour of a life to raise, which threaten every moment to overwhelm the person that dwells in them, and which while they stand, though they may save him from some smaller inconveniencies, can protect him from none of the severer inclemencies of the season. They keep off the summer shower, not the winter storm, but leave him always as much, and sometimes more exposed than before, to anxiety, to fear, and to sorrow; to diseases, to danger, and to death....

We are... charmed with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how every thing is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires.... The pleasures of wealth and greatness, when considered in this complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.

And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth. The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants. It is to no purpose, that the proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the oeconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for...

Posted by: Brad DeLong on August 16, 2002 09:14 AM

Thanks Brad,

Wonderful passage.

Posted by: on August 16, 2002 09:33 AM

My memory of the psycholigists' research on such things is that there isn't much correlation between change in wealth and change in psychological traits such as happiness, avarice, sloth, etc.

I.e., people tend to have individual "set points" for happiness and the rest. Good or bad fortune (money wise, birth or death in the family, etc.) may push them away from their set points for a while, but they tend to return to them.

So most people never get off whatever conveyor belt they are on, until they reach the end.

Posted by: Jim Glass on August 16, 2002 09:33 AM

The apparently innate human drive to excel may be most apparent in wealth, but is manifested along many other dimensions.

Ted Williams' famous unending pursuit of hitting excellence, long after it became obvious he was to be a Hall of Famer, is one instance.Endless lists of Olympians striving for immortality in esoteric ventures, is another.Did Carl Sagan stop working after his TV show Cosmos? Or his 100th peer-reviewed paper? Has Jimmy Carter slacked off working for peace since leaving the presidency more than 2 decades ago?

Posted by: George Zachar on August 16, 2002 09:38 AM

Regarding wealth and happiness. I was at the

92nd Street YMCA a few years ago and listened to

a lecture by the Dali Lama. I am not a buddhist

or even very religious but the man actually glowed with happiness. He talked about it in a

Q&A afterwords and something he said has always stuck with me. He said that happiness is not something we achieve from the outside in, it must come from the inside out. His point was, if you

define your self-worth by what you own or can own,

you are playing a fools game. Someone will always have more and there will always be a bigger house to buy or a bigger yacht. The Dali Lama wasn't trying to sell us something. His goal was not to

convert but to teach.

Nick Foresta

Posted by: nick foresta on August 16, 2002 09:48 AM

I'll see your Bruce and raise you one:

Badlands

Poor man wanna be rich.

Rich man wanna be king.

A king ain't satisfied until he rules everything.

Posted by: Ken Doran on August 16, 2002 10:13 AM

I'll see your Bruce and raise you one:

Badlands

Poor man wanna be rich.

Rich man wanna be king.

A king ain't satisfied until he rules everything.

Posted by: Ken Doran on August 16, 2002 10:13 AM

Remember bower birds. The males build marvelous nests full of decorations in hope of attracting a dream of a mate or mates or perhaps any mate. We are as birds in our way. Darwin would understand.

Posted by: on August 16, 2002 10:39 AM

As a rule of thumb, people will get sated (or think they will get sated) when they have achieved the next level in Maslow's Heirarchies. Someone who's starving will be sated when they have enough money to know where their next meal is coming from, and they have a safe home and hearth. Someone with a safe home will aspire to having love and belonging to a group. And so on.

Gatby was right: The rich ARE different from you and me. They live in a different world and what it takes to sate them will be different. When people claim to find out "what really matters", it's usually the realization that they have been taking their place in Maslow's Heirarchies for granted, and that it wouldn't take too much change for them to get knocked down a level or two.

Sitcoms (and other forms of popular culture) play off these levels. Mary Tyler Moore was uprooted from her previous life, and spent 11 years being well-fed and safe but looking for belonging and love. The Jeffersons had achieved success, but were movin' on up to meet esteem needs. MASH was about (among other things) how well-educated and assured-of-a-good-job people would react when their safety and even their next meal was in danger. And so on.

Sorry for the mini-essay. I encourage everyone to send me money to see if it would be enough. Purely in the interests of science, of course.

Posted by: Dave Romm on August 16, 2002 12:58 PM

Love the "Moral Sentiments" passage. I notice that book seems to be experiencing something of a revival.

I'm pretty close to my indifference point, I think. But then, if I weren't easily sated,I wouldn't have become a professor: I've only recently equalled what I was making as a lawyer over ten years ago. We professors get our satisfaction mostly in non-financial ways.

As opposed to magazine publishers, apparently. I suppose it's been a long time since anyone actually thought of Jann Wenner as a countercultural icon, but this story surely puts that to rest once and for all!

Posted by: Glenn Reynolds on August 17, 2002 06:57 AM

Great thread.

One day, when I was in Washington on a hot, hot summer's night, I actually figured out what my optimal income would be:

$80,000 annually after-tax.

Not that I would say "no" to anything more, but I thought that that would be everything I wanted.

Then a Randite friend of mine and I sat down and figured out what we could live on if we absolutely had to:

$12,000 annually after-tax (although I don't think taxes are much of a hassle at that point; and yes, rents are much, much lower in Indiana; and yes, this was assuming a bachelor existence). The bulk of this -- after food, clothes, and housing -- was in books.

Point of story? It's much cheaper to change your expectations than it is to work harder to be (like fortunate people such as Glenn Reynolds) at the flat of your utility curve.

Posted by: Paul on August 20, 2002 01:12 PM

It also strikes me that, since much of the utility of wealth is positional, you can come closer to your satiation point by leaving Manhattan for Montana.

Posted by: Paul on August 20, 2002 01:14 PM
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