Happynomics and Entrepreneurship

One of my seminal influences in business, probably my greatest, is Mihaly Csiksentmihalyi. He wrote the remarkable book Flow: The Psychology of Optimal Experience, a book about happiness that should be read by every entrepreneur. Here is one thing he says about happiness:

“What I discovered was that happiness is not something that happens. It is not the result of good fortune or random chance. It is not something that money can buy or power command. It does not depend on outside events, but, rather, on how we interpret them. Happiness, in fact, is a condition that must be prepared for, cultivated, and defended privately by each person. People who learn to control inner experience will be able to determine the quality of their lives, which is as close as any of us can come to being happy.”

Abraham Lincoln put it more simply. He said, “Most people are about as happy as they make up their minds to be.” I think there’s a lot of truth to that. But of one thing I am convinced. Money and success do not buy happiness.

I’ve recently come across an interesting guy named Andrew J. Oswald. Oswald is a professor of economics at the University of Warwick in the UK. He is on the cutting edge of a school of economic thinking called “happinomics.” Oswald’s belief is that growth in income is not correlated to happiness either in nations or in individuals. He states:

“The relevance of economic performance is that it may be a means to an end. That end is not consumption of beef burgers, or the accumulation of television sets, nor the vanquishing of some high level off interest rates, but rather the enrichment of mankind’s feeling of well-being. Economic things matter only in so far as they make people happier.”

While I do not wish to bore you with extensive research results, Oswald argues (convincingly to me) that macro-economic thinking needs to shift from the concept of financial prosperity to the idea of emotional prosperity. His extensive years of research in the US and UK reveal that increasing income does not contribute dramatically to the quality of people’s lives. He concludes his paper, Happiness and Economic Performance (Economic Journal), with this question. “How can it be, one may ask, that money buys little well-being and yet we see individuals around us constantly striving to make more of it?”

This is a case where academic economic research may actually begin to have an effect on public policy. At least in England. Ex-British Prime Minister David Cameron created a national happiness index providing quarterly measures of how people feel. Call it an alternative GDP. While this may all sound a bit airy fairy, the actual case for trying to measure not only growth and prosperity, but also happiness, is increasingly compelling to me.

I certainly believe that entrepreneurial mindsets need to change over the next decades to emphasize more of the intangible values of entrepreneurship. I believe that a coming and necessary age of austerity will refocus many entrepreneurs from the concept of financial riches to the idea of emotional prosperity.

I say this from my personal experience of the entrepreneurial journey as a walk to personal growth and satisfaction, at least as much as to financial security. For this reason, if I went bankrupt tomorrow, entrepreneurship would be a huge success for me personally. For me, the greatest gifts of entrepreneurship are intangible and spiritual. I hope that latter word doesn’t get everyone squirming in their seats, but I see personal well-being and mindfulness as a very practical primary business goal. It’s certainly my main interest as an entrepreneur.

Or maybe I’m just over-thinking this whole happiness thing. The late British actress Joyce Grenfell once defined happiness as “the sublime moment when you get out of your corsets at night.”

Thank you, Joyce.