Having money in the bank and not being burdened with debts alleviates stress. It can also improve happiness. But a surprising number of people are clueless to wealth’s limitations.
In fast growing economies, it’s hard for many people to imagine that money can’t solve every problem. After all, if you’ve gone from squat toilet outhouses to farting through silk, money certainly can be seen as miraculous. But such experiences can warp our judgement, as in the example of the Hong Kong businessman who recently offered $65 million to any man who could win his gay daughter’s heart. Oh yeah, that ought to work. She’s especially pleased with her dad’s generosity, as you can imagine. It bodes well for their father-daughter relationship.
Similarly pegged delusions are evident in Korea, where many wealthy, workaholic parents— especially fathers— hardly see their kids. Viewing money as the child-rearing panacea, they sometimes send their young children to foreign countries for their schooling. They might buy an apartment and hire a maid/caretaker to raise their kids. Then the parents put their noses to the grindstone to make as much money as humanly possible...all for the well-being of their children, of course. As an international school teacher, I’m speaking from experience. It surprises and saddens me, every time I see it.
If money were a source for happiness, we would probably see its benefits in China. In June 2012, The Economist cited two academic studies of mainly urban people in China between 1990 and 2010, when economic growth was thriving. Richard Easterlin, of the University of Southern California, wrote that China presented an ideal environment for such a study. But no correlation between economic growth and an increase of life satisfaction was reported.
You might chuckle at the idea of a man thinking he could woo a suitor with cash to change his daughter’s sexual orientation. And you might shake your heads at the naivety of Korean families who think a foreign education and cold hard cash is a better vehicle for human development than hugs and positive support. But don’t laugh too loudly. The company you work for might not be any more evolved.
According to Daniel H. Pink, author of Drive, The Surprising Truth About What Motivates Us, we may be motivated by money for rudimentary, non-thinking tasks. But when critical thinking applies, money doesn’t appear to incentivize us. Before dismissing the idea, consider Pink’s example of Wikipedia. A dozen years ago, it went head to head with MSN Encarta. Microsoft paid people to create and run Encarta, but Wikipedia was created and run by volunteers wishing to “work” for free. I’ll forgive you if you can’t remember Encarta. Wiki buried it in the backyard.
Pink suggests that once basic financial needs are met, people enjoy the creative autonomy of work—and they’ll work for free if they’re given enough leeway. Wikipedia isn’t an outlier. Firefox is a free open-source web browser with more than 350 million users, created mostly by unpaid laborers. Linux software was designed by unpaid programmers and it’s available for free. Apache is a free open-source Web server with 52 percent of the Web server market. Again, it was created and maintained by a global group of volunteers.
Financial bonuses for complex tasks, according to Pink, don’t incentivize people; instead, they make workers less effective. Our financial institutions, perhaps, should catch on to the latest research. Instead of creating a culture of short term bonuses for bankers, they could (according to Pink) be more effective if they studied what truly causes our mental synapses to hum: a freedom to think, make mistakes, and play with ideas. Such freedom from short term financial rewards ensures higher likelihoods of long term success for corporations, and people—who look down the road for the greater, long term benefits.
Evidence of mental stifling from offering short term financial rewards can be seen from very young ages. In the Review of Economic Studies 70 (2003) researchers Roland Bénabou and Jean Tirole reported that children who are paid bonuses for answering questions correctly typically choose easier questions or problems to respond to. As a result, they learn less. Shortcuts to immediate gratification often end in poor results, whether in education, business or the banking system.
Then there’s the wealthy Hong Kong businessman trying to alter his daughter’s sexuality. Will dangling cash carrots to suitors actually work? Of course it won’t. He has plenty to learn about people. Perhaps the poor fellow previously worked at a bank.