Why buying things makes you happy

Editor’s Note: When cracks began to emerge in Steve Quartz’s anti-consumerist beliefs, the professor of philosophy and neuroscience at the California Institute of Technology turned to what he knew best: neuroscience. By developing a “consumer neuroscience,” Quartz began to better understand why we consume. What he found led to a book of surprising conclusions.

Below, Quartz, the co-author of “Cool: How the Brain’s Hidden Quest for Cool Drives Our Economy and Shapes Our World,” argues that, contrary to popular belief, consumerism isn’t so bad after all. Check back here tomorrow for another essay from Quartz, and tune in to Thursday’s Making Sen$e segment for more.

Kristen Doerer, Making Sen$e Editor

From pop songs to Pope Francis, consumerism is often denounced as a poison that thwarts genuine happiness, hampers political participation and erodes social connections. Even many consumer theorists suspect that motives like envy and a hunger to emulate higher-ups drives our consumption. Pointing the finger at an insatiable thirst for status, critics argue that our pursuit of “stuff” locks us in an irrational consumer arms race, where we compete for status through ever more wasteful purchases.

For over 40 years, some economists and anti-consumerists have pointed to a series of findings dubbed “The Easterlin Paradox” as the incriminating evidence that our increasing consumption makes us no happier. In 1974, Richard Easterlin reported that although richer people were happier than poorer people in the same country, people in wealthier countries were no happier than those in poorer ones. The implication was that happiness depended on relative income — how we stack up against the proverbial Joneses. Imagine if we doubled everyone’s income overnight. It would have no effect on your ability to keep up with the Joneses since theirs doubled as well. Just as all the children of Lake Wobegon can’t really be above average — at least compared to each other — status, like rank in a Lake Wobegon classroom, is all relative. The only way to gain status is by someone else losing some — it’s a zero-sum contest. If only the Joneses would stop buying bigger houses and fancier cars…

But new studies question whether there ever was an Easterlin Paradox. The 2006 Gallop World Poll, which included nationally representative surveys from 132 countries, was the first erosion to the concept. In 2008, economist Angus Deaton found a strong global relationship between a country’s wealth (Gross Domestic Product per capita) and happiness (measured by life satisfaction). As he noted, the people of sub-Saharan Africa are not as satisfied with their lives as people in India, who are not as satisfied with their lives as the people of France or Denmark.

It seemed like many psychologists, sociologists and culture critics were studying consumerism from the armchair with more interest in condemning it than understanding it.

Deaton found no evidence for an idea that had become lore in the field and a mantra among anti-consumers: that once a country’s wealth satisfied its citizens’ basic needs, more wealth doesn’t increase happiness. Examining subsequent waves of the Gallop World Poll, now including 155 countries, economists Betsey Stevenson and Justin Wolfers similarly found a global relationship between income and life satisfaction. Recently, the psychologist Ed Diener, a pioneer in the scientific study of happiness, found that using household income instead of the more indirect measure of GDP per capita revealed even stronger links between material welfare, purchasing power and happiness that were long enduring.

If there’s no paradox — if material welfare, purchasing power, and happiness are indeed strongly linked — then the anti-consumer view and its conception of consumerism as an irrational status zero-sum contest must be fundamentally flawed.

A decade ago, cracks in the Easterlin Paradox were causing me to wonder if my own anti-consumer intuitions were ill-founded. When I turned to examine consumer theories, I found much of the research deeply tinged with strong moral overtones. It seemed like many psychologists, sociologists and culture critics were studying consumerism from the armchair with more interest in condemning it than understanding it. To try to better understand why we consume, I started to develop a “consumer neuroscience” that I hoped would answer some of these mysteries by tapping into the unconscious brain processes underlying our purchase decisions. At the time, brain imaging was opening a new window into the workings of the mind, and I suspected looking at these processes, rather than relying just on people’s introspection, would provide a clearer foundation for a theory of our consumer behavior.

In one experiment, my colleagues and I were interested in probing why entire industries, from running shoes (think Air Jordan) to computers (think Mac), depended on how people perceived their products as cool or not. Most of the products we use are infused with symbolic meanings, cool among them, which adds value to them beyond their functionality. As the anthropologist Daniel Miller has long studied, humans have long used the symbolic meaning of the stuff around us, our material culture, to create our social identity and define our social relationships.

We found that asking people to merely look at products they considered “cool” sparked a pattern of activation in a part of the brain known as the medial prefrontal cortex. The activation was similar to what we see when people receive a compliment or feel valued by others, that is, when their perceived status increases. Even more interesting was the fact that this part of the brain had expanded the most during human evolution. This expansion gave rise to our capacity for self-reflection and to think about others in terms of their thoughts and feelings. These are all critical social capacities that allow us to build our complex social worlds. It was a captivating convergence to find such symbiosis between our expanded medial prefrontal cortex, which gives rise to our social selves, and the material culture we build, which helps define and shape our social identity.

The medial prefrontal cortex also creates social emotions that are likely uniquely human, particularly the positive emotions we feel when others value us, such as pride, and the strongly aversive emotions we feel when we think others think poorly of us, such as shame and guilt. These create the basic motivations that drive us to affiliate with others and ultimately to use our patterns of consumption to help create the social groups.

Understanding how products impact us in light of our brain’s evolutionary history compels us to rethink many of our most basic assumptions about why we consume. The complex emotional life our medial prefrontal cortex creates gives rise to our most basic social impulses: to form intimate partnerships, friendships and alliances — to create the groups through which we gain our sense of belonging. During evolution, one’s life success was critically tied to the quality of partners and alliances one made. This is true today. An extraordinary amount of our social behavior revolves around seeking out and maintaining romantic partnerships and friendships, an evolutionary pressure known as social selection.

Social selection has created deep-seated needs in us to display our value as social partners through acts of generosity, kindness and understanding of social norms. Evolutionary biologists describe these as costly signals of our trustworthiness and worth as a partner and friend. Virtually every social behavior contains some signaling element that conveys something about us to others, from how we walk to how we talk to how we eat. The latest Emily Post etiquette book comes in at a back-breaking 865 pages — a testimony to the extraordinarily complex symbolic layers of our social life.

It now appears that the very first signs of our humanity dawned when our ancestors began using the material around them in this symbolic way — the very first shell necklaces some 70,000 years ago might have symbolized membership in a group or perhaps some social role within that group. Today, our patterns of consumption draw on these very same affiliative roots, as we use products to convey who we are to others.

We can do this because our medial prefrontal cortex works as a sort of social calculator that monitors our perceptions of other people’s judgments of us, a sort of self-esteem inner gauge. It creates our basic need to feel the face-to-face admiration and respect we obtain in groups. In fact, psychologists have discovered that our happiness depends more on this feeling of esteem and respect than on our socioeconomic status. That’s because seeking esteem through our patterns of consumption is a relatively recent cultural invention, tracing back to 18th century England. For most of our species’ existence, status came in non-economic forms, including social networks, physical strength and practical skills and knowledge.

What all this suggests is that our modern patterns of consumption tap into this more basic need for social esteem, which drives us to create social groups around common values and norms.

What all this suggests is that our modern patterns of consumption tap into this more basic need for social esteem, which drives us to create social groups around common values and norms. Today, we call these consumer lifestyles consumer tribes, brand communities or consumption microcultures. Most consumer products are potent social signals, which people use to signal, often unconsciously, their values to others. Few people would drive a Prius to a NASCAR race while fewer still would drive a Hummer to an environmental meeting. A hippie would rather walk than drive a BMW. Consumer researchers have found that people bond over these shared preferences, with common patterns of consumption defining and shaping their social groups.

In fact, much of the economic value of products today lies in their impact on our brain’s mostly implicit estimate of how they impact our social identity. In collaboration with Read Montague’s lab at Baylor College of Medicine, we found that boosts in our social status also strongly activate the nucleus accumbens, a critical part of the brain’s reward system that’s implicated in almost all forms of addiction. Other studies with college students found that they value self-esteem boosts even more than sex!

But I would urge you not to view these as some misbegotten vanity. Feeling esteemed and respected by others is a basic and universal human need that makes possible the human bonds that underlie cooperative human social life. It’s no surprise that it taps into the brain’s most powerful reward systems.

Viewed in this light, I think a good way of thinking about consumerism is as a way of converting income into the lifestyles that allow us to create and engage in diverse social groups that satisfy our need to belong and to feel respected, esteemed and valued by others. That’s why our incomes won’t have their full impact on our happiness unless we convert some of them into status. While many status systems that aren’t connected to economic life still exist, status is typically in extremely limited supply in traditional societies that do not use consumerism as a way of supplying status. And it’s also typically reserved for a ruling elite.

The Easterlin Paradox assumed that status seeking was a zero-sum contest. If the total amount of status or esteem is fixed, then the only way to get more of it is by someone losing some of theirs. As I explore tomorrow, this also turns out to be false. In the 1950s, something happened to how we consume, which allowed new forms of status to emerge, helping to solve a critically important but under appreciated social problem: if our happiness depends on attaining esteem and the respect of others through participating in social groups, how can a society meet that demand?