insight magazine

Ethics Engaged | Fall 2017

The Ethics of Happiness

What makes us happy, and do our ethical impulses affect our happiness?
Elizabeth Pittelkow Kittner VP of Finance, GigaOm


For some people, happiness is success or materialism. For others, it is experiences or time spent with others. And then there is money—$75,000 to be precise.

According to the Time magazine article, “Six New Rules for Happier Spending,” recent research says $75,000 is the magic annual income for day-to-day happiness. Anything above this threshold does not appear statistically to add to day-to-day happiness for most people, and incremental dollars above $75,000 add to overall contentment but not to joy. Money, then, only provides happiness up to the point of being able to provide for our basic needs.

Despite this fact, we all know people who set money as their priority. As humans, we have the tendency to overestimate how much happiness we feel by having more money or by purchasing new products—we get a burst of happiness at the time, but we then get used to having it, which is a phenomenon known as “hedonic adaptation” or the “hedonic treadmill.”

“Lottery Winners and Accident Victims: Is Happiness Relative?,” a study dating back to a 1978 issue of the Journal of Personality and Social Psychology, timelessly highlights this concept because it reveals that lottery winners are no happier than non-winners 18 months after their wins—after the initial spike in joy, they adapt to their new life situation.

Even if you are not a fan of The Notorious B.I.G., you have probably heard the phrase, “More money, more problems.” Once we earn beyond our basic human needs, we tend to make buying decisions that lock us into the need to continue making our current salaries or more. It is exciting to have money to spend; however, if something threatens your current way of life, it is emotionally more difficult to scale back or admit that your lifestyle may need to change.

Now consider the elements of David T. Wolfe’s and Dana R. Hermanson’s fraud diamond: incentive, opportunity, rationalization, and capability. We can draw links from some frauds to people pressured to sustain their current lifestyles or who perceived opportunity to achieve more happiness. According to KPMG’s “Global Profiles of the Fraudster: Technology Enables and Weak Controls Fuel the Fraud,” 66 percent of frauds are perpetrated for personal financial gain and greed.

We make decisions based on our values and self-interest. We are motivated by achieving outcomes, which can lead to behavior justification—the end justifies the means. For example, someone may want to maximize revenue through completing as many tax returns as possible, even if that means they do not perform a thorough review of each return.

We justify behaviors using advantageous comparisons: You may be withholding useful information from decision-makers in your company, but your colleague may be withholding more important information, so you tell yourself that your behavior is okay.

When we discuss unethical behavior, we talk about how we would not do what those people did if put in the same situations. However, under challenging circumstances, the part of our personality that wants something from a situation can overpower the part of our personality that knows what we should do. Accurate self-awareness of our psychology is a good step toward preventing detrimental decision-making.

We justify behavior by using euphemisms that soften what is occurring. For example, bad debts or write-offs become “under-performing assets,” and polishing up the balance sheet is “protecting the shareholders.” When you make yourself happier with euphemisms, you are more likely to not feel guilty about unethical behavior.

Aristotle wrote, “He is happy who lives in accordance with complete virtue and is sufficiently equipped with external goods, not for some chance period but throughout a complete life.” I believe what Aristotle is saying is that we should be participating in activities that provide long-term, sustained happiness instead of making decisions that provide short-term, unsustainable happiness.

So how do we sustain happiness?

According to “The Challenge of Staying Happier: Testing the Hedonic Adaptation Prevention Model,” researchers say the two main factors for sustaining happiness are variety and appreciation (gratitude). Variety can come from changing what we do at work and participating in new social activities. Gratitude is a mindfulness exercise that asks us to reflect on the positivity in our lives.

Further, the top sources of gratitude in the U.S. are our families, the freedoms of living in America, good health, close friends, and the ability to practice religion, according to a study cited in Ellen Seidman’s Time magazine article, “The Power of Gratitude.”

And how do we sustain happiness at work with our colleagues, clients, and customers? Happiness is a clear conscience. Happiness is doing the right thing, even when it is difficult, even when you are the minority opinion, and even when you want to do something else.

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