Ethics Engaged | Fall 2017
The Ethics of Happiness
What makes us happy, and do our ethical impulses affect our happiness?
Elizabeth Pittelkow Kittner
CFO and Managing Director, Leelyn Smith LLC
Exploring Ethics in Business & Finance Today
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.