As indicated I would like to continue the discussion from this post on the optimal level of spending and consumption.
We saw in the last post that the effect of adaptation will in general nullify any gain in happiness that you get from buying something or from increasing your income after a certain amount of time passed.
However we have seen that the effect of adaptation regarding income applies only beyond a certain threshold of income. This is in line with common sense:
Even if I’d advocate that most people could be equally happy with less money than they actually spend, it is obvious that no money at all makes it quite difficult to achieve happiness. Unless of course you are one of the really bad-ass Cynicists like Diogenes.
But now I would like to look at the consumption side:
If you take the principle of adaptation to it’s extreme, we should own nothing and live in a barrel like Diogenes who threw his last possession (a cup) away when he saw somebody who was drinking out of his hands.
So should we throw away everything we own, or abstain from buying anything for ever from now on? And if not, what is it now with the effect of adaptation?
After thinking a bit about this puzzle, I would propose the following:
- Like with income, a certain given threshold has to be passed before the effect of adaptation applies. I.e. you should obviously own a couple of BASIC things, that make your life easier on a very simple level and on a daily basis.
That would start with a roof over your head, a toilet, heating, food, cloths and so on, all things that truly add to your physical well-being constantly.
Probably everybody who is reading this can tick an OK to all of this points anyhow, like most people in developed societies can.
That’s great news, because then the door to happiness is quite open.
- Beyond that point, I’d tend to propose the following if it comes to a buying decision:
- If the product you are considering to buy can be used in a creative and interactive way, if it can add to or amplify your skills, your ideas, your creativity in a long-term way, then you should buy it. Because in that case, I’d say the law of adaptation does not apply.
Why? Because the product will not be the same over time, it will renew it’s utility with each usage by you. Thus it’s happiness boost will not, or only very slowly, wear of.
Take an example:
Music instruments, or a laptop.
Each time you play your instrument, it will give you some joy, and each time your play will be different. You will get better thanks to the possibility to practice and your creative potential will be improved by it. Same holds true for the laptop – if you use it for interactive purposes, like writing, reading meaningful stuff and so on.
- Now the other case:
If the product you are considering to buy does only fulfill a passive or status role, or it is excessively expensive not due to functionality but due to non-functional features, then you should not buy it because very likely its happiness value will diminish quickly by the law of adaptation.
Aluminum rims for your car. These things do not add any more functionality to your car that standard steel rims could offer. To the contrary, they are less durable and quicker to damage. But they cost three times the money, because they are stylish.
Same holds true for a golden automatic watch, expensive designer cloths and so on. Actually for most products that are considered as “hip” or “life-style”.
- Obviously you might rather not buy:
Things that only replace other things you have already, but do not add significant functionality but rather are “new” or “more modern”.
Things that are too specialized, such that you would need them only seldom and could easily replace them (like the funny example of “special electric pumpkin knifes” for Halloween)
Things that you need seldom and that your neighbor or friends already own. Just lend it out and buy a bottle of wine instead as a present.
For the moment, I am quite satisfied with this solution to the consumption problem, but let me know if you have any other ideas.