September 22, 2017

Economic Inequality Stats

My research on economic inequality consistently turns up three key points: (1) since the 80’s, there has been an ever-widening gap in incomes and capital ownership between the rich and poor, (2) the gap has been growing at an accelerating rate, especially since the year 2000, and (3) this phenomenon is worldwide.

So what?

As I’ve mentioned before, many U.S. economists and policy-makers greet those findings either with indifference or as a clarion call to defend endangered capitalism, while their international counterparts find them alarming. We’re talking about them here because it turns out that economic inequality has a lot to do with happiness and meaning at work. (Stay with me — we’ll get there, we’re just taking the scenic route.)

We all know that it’s easy to mold statistics to fit opinions — here’s a neurologist’s take on Why People Can’t Agree on Basic Facts. Any stats we look at here will have been pre-sorted, pre-analyzed, and pre-interpreted. My goal today was to provide a sampling of statistics from a variety of global sources — starting with a quote about how the new global super-rich are a bunch of economic data curve busters, which makes finding honest data even harder.

The skew toward the very top is so pronounced that you can’t understand overall economic growth figures without taking it into account. As in a school whose improved test scores are due largely to the stellar performance of a few students, the surging fortunes at the very top can mask stagnation lower down the income distribution.

Consider America’s economic recovery in 2009-2010. Overall incomes in that period grew by 2.3 percent — tepid growth, to be sure, but a lot stronger than you might have guessed from the general gloom of the period. Look more closely at the data, though . . . and it turns out that average Americans were right to doubt the economic comeback. That’s because for 99 percent of Americans, incomes increased by 0.2 percent. Meanwhile, the incomes of the top I percent jumped by 11.6 percent.

Plutocrats (2012), by Canadian journalist and politician Chrystia Freeland.

Across the developed world, vast fortunes are again ascendant. In the United States, the top 1 percent take home a larger share of total income than at any time except the late 1920’s. The total wealth of the world’s billionaires has quadrupled in the past two decades (even when the definition of “billionaire” is adjusted for inflation).

In the 1950’s, a typical CEO of a large company took home as much money as twenty average employees; today he makes as much as two hundred workers.

Economism (2017), by UConn law professor James Kwak.

In 2014, the inflation-adjusted income of the typical American household was just 7 per cent higher than it was in 1979. By contrast, the income of a household in the 95th percentile of the income distribution grew 45 per cent over that period.

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century (2016), by Ryan Avent,  a thoroughly Anglicized American who works as a senior editor and economic columnist for The Economist.

[C]ompare Detroit in 1990 . . . with Silicon Valley in 2014. In 1990, the three biggest companies in Detroit had a combined market capitalization of $36 billion, revenues of $250 billion, and 1.2 million employees. In 2014, the three biggest companies in Silicon Valley had a considerably higher market capitalization ($1.09 trillion), generated roughly the same revenues ($247 billion), but with about 10 times fewer employees (137,000).

The Fourth Industrial Revolution (2016), by German engineer and economist Klaus Schwab, Founder and Chairman of the World Economic Forum (WEF).

Prior to the 2017 WEF annual meeting of world leaders last winter, U.K.-based Oxfam International issued a report that offers a fascinating slant on Schwab’s comments. According to the report:

Eight men now control as much wealth as the world’s poorest 3.6 billion people . . . The men — Bill Gates, Warren Buffett, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Amancio Ortega, Larry Ellison and Michael Bloomberg — are collectively worth $426 billion.

As reported by CNN.

By contrast, half the planet’s population, some 3.6 billion people, have a combined wealth of $409 billion.

As reported by The Mirror Online (the U.K.’s “intelligent tabloid”).

Not only are the Elite Eight collectively worth more than the lower half of the world’s entire population, each individual member of the group is worth more than the combined market capitalization of Detroit’s three largest companies 27 years ago. The Mirror also noted this about the study:

The report found that between 1988 and 2011 the incomes of the poorest 10% increased by just $65, while the incomes of the richest 1% grew by $11,800 – 182 times as much.

A couple years ago, Credit Suisse’s “Global Wealth Report 2015” reported that half of the world’s assets were controlled by the top 1% of the global population, while the lower half owned less than 1%.

There’s plenty more where all of that came from. In fact, there’s such an abundance of global data and opinion on the topic that, if nothing else, it’s probably safe to conclude that economic inequality either really is a problem or, even if it’s not, a whole lot of people around the world sure seem to think it is.

We’ll continue our economic inquiries next time.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Why We Can’t Talk About Economic Inequality

It is not just the super-rich who don’t like to talk about rising income inequality. It can be an ideologically uncomfortable conversation for many of the rest of us, too. That’s because even — or perhaps particularly — in the view of its most ardent supporters, global capitalism wasn’t supposed to work quite this way.

That’s from Plutocrats: The Rise of the new Global Super Rich and the Fall of Everyone Else, Chrystia Freeland (2012). The book reads like an extended academic version of People Magazine meets CNN meets The New York Times, and could only have been written by someone who logged years on the insider track and took lots of notes.

Turns out that’s precisely who Chrystia Freeland is. She’s a Canadian writer, journalist, and politician. She worked in a variety of editorial positions at the Financial Times, The Globe and Mail, and Thomson Reuters, was elected to the Canadian Parliament in 2013 (the year after the book came out), and was appointed Canada’s Minister of Foreign Affairs earlier this year. She’s a Harvard grad, a Rhodes Scholar, and was named one of Toronto’s 50 most influential people by Toronto Life Magazine in 2015.

The book takes names and tells stories, and is awash in dates and times and statistics. Reading it all the way through can be a bit of a slog, and I wonder how many people actually do — I confess, I skimmed a lot. I quote it here because it does a great job of capturing the lessons of my last two posts: 1) most of us haven’t updated our understanding of economics since Econ 101, and 2) we don’t like talking about economic inequality. Beginning with the quote above, the book provides a useful overview of how those two things are related. (These quotes are particularly re: income inequality, but apply to capital inequality as well.)

Until the past few decades, the received wisdom among economists was that income inequality would be fairly low in the preindustrial era—overall wealth and productivity fairly small, so there wasn’t that much for the elite to capture— then spike during industrialization, as the industrialists and industrial workers outstripped farmers (think of China today). Finally, in fully industrialized or postindustrial societies, income inequality would again decrease as education became more widespread and the state played a bigger, more redistributive role.

(This theory was articulated by Nobel Prize winning economist Simon Kuzmets, and can be plotted in what has become known as the Kuzmets curve. According to Wikipedia, Kuzmets won the award in 1971 “for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development.”)

Continuing with Plutocrats:

Until the 1970’s, the United States… was also an embodiment of the Kuzmets curve. The great postwar expansion was also the period of what economists have dubbed the Great Compression, when inequality shrank, and most Americans came to think of themselves as the middle class.

But in the late 1970’s, things started to change. The income of the middle class started to stagnate and those at the top began to pull away from everyone else. The shift was most pronounced in the United States, but by the twenty-first century, surging income inequality had become a worldwide phenomenon, visible in most of the developed Western economies, as well as in the rising emerging markets.

The switch from the America of the Great Compression to the America of the 1 percent is still so recent that our intuitive beliefs about how capitalism works haven’t caught up with the reality. In fact, surging income inequality is such a strong violation of our expectations that most of us don’t realize it is happening.

We’ll look at some inequality stats next time.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Taboo Economics

Last time, University of Connecticut law professor James Kwak challenged us to upgrade our Econ 101 understanding of economics. I’ve spent the past year doing that, and have come across what appears to be the one single issue that will instantly and absolutely shut down all further inquiry. It is the ultimate economics taboo — the quickest way to destroy any hope of further learning or discussion. Taking it head on is like signing up for a an adventure tourism trip into the Labyrinth, live Minotaur included.

No thanks, I’m pretty sure I’ve got something going on that night.

It’s especially taboo if you’re an American — economists around the rest of the world talk about it all the time with a sense of urgency, like it’s something we need to get on right now if we know what’s good for us. More on that in a moment. But first, what is it? In a word,

Inequality

Uh-oh. I think I just heard the footfalls of a really large, really nasty creature.

Understanding economic inequality is the key to Economics 2017. Trouble is, the topic threatens the very bedrock of a country founded on this premise:

We hold these truths to be self-evident: that all men are created equal.

“Equal” means “Anybody Can Make It Here.” We are the land of Horatio Alger. To suggest that public policy — where the study of economics is played out — might include income inequality on its agenda is to throw Alger’s rags-to-riches enthronement of hard work, determination, courage, and honesty under the bus. Questioning those values is un-American by definition — the province of the Occupiers, who we all know finally had to give up and get a real job.

And so it goes.

You think I’m exaggerating? Read this NY Times op-ed piece from earlier this summer, then read these two completely polarized responses. The writer who started the exchange is a Brit who writes for the Brookings Institute and wrote a book entitled Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do about Itwhich pretty much tells you everything you need to know, doesn’t it? About as surprising as finding this lesson plan primer on economic inequality on the PBS website.

And so it goes.

As the NY Times exchange makes clear, the issue isn’t so much economics, it’s the complete, total, utter American rejection of anything resembling a class system — a yoke we threw off with those Declaration of Independence fightin’ words. Which is why, these days, if you’re an European or Asian economist you’ll talk about inequality with a sense of urgency, but if you’re an American you won’t talk about it all — unless you’re a foreign-trained economist teaching at a prestigious U.S. university, which doesn’t really count. See the analysis of the USA vs. the Rest of the World Economic Divide in “Why So Few American Economists Are Studying Inequality, The Atlantic, Sept. 13, 2016. (The article’s killer opening line is “In recent years, it’s been European scholars who have written the blockbuster papers on the topic.” “Blockbuster papers”? Seriously? Are we talking about economics here?)

Which is why it takes a Frenchman to write an international blockbuster (there’s that word again) economics book that takes 600 geeky pages to reckon with economic inequality. (Google Thomas Piketty’s Capital in the Twenty-First Century — it’s all over the place.)

I mentioned the book to a friend who’s a hedge fund manager. He’s the most dedicated to the study of economics person I know. His comment? “Piketty didn’t talk about benefits.”

That was it.

We can let the topic of income inequality send us scurrying to the safety of Econ 101, or we can brave the Minotaur.

We’ll enter the Labyrinth next time.

 

(By the way, the reputed lefty Brookings Institute and its equally reputed righty arch-rival American Enterprise Institute actually collaborated on a 2015 study called “Opportunity, Responsibility, and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream.” And if the BI is given to favoring its own touchy topics, the AEI isn’t afraid to tackle its own controversial counterparts, as I learned while squirming my way through The Inequality Taboo. I’ll just leave it there for now.)

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Reckoning

“What would you do if money were no object?”

Baloney. Money is always an object. We always have to deal with it.

And now, more than ever, we need to deal with it from a fresh perspective, says University of Connecticut law professor James Kwak, whose book Economism warns against “the pernicious influence of economism in contemporary society.” He defines “economism” as “a distorted worldview based on a misleading caricature of economic knowledge.” Most of us learned what we know about economics in Econ 101, he says, and haven’t moved on since then, while the world of economics has.

The competitive market model can be a powerful tool, but it is only starting point in illuminating complex real-world issues, not the final word. In the real world, many other factors complicate the picture, sometimes beyond recognition.

Still, the answer to econonism is not to reject economics altogether. Rather, the immediate antidote to economism’s simplistic model of reality is more and better economic analysis, which can help identify the fundamental drivers of social phenomena or select the most effective solutions to difficult problems.

His fresh take on “more and better economic analysis” exposes the limitations of theoretical models, statistical analysis, empirical research, laments the academic turf wars fought over them, and acknowledges that the study of economics “does not provide a single, simple answer to all questions.” Still, he says, taking a fresh look at economics “ is a crucial step in throwing off the blinders of economism.”

We’ll hear more from Prof. Kwak in subsequent posts, but first we might consider where we stand on this perspective from Albert Camus:

There exists an obvious fact that seems utterly moral: namely, that a man is always prey to his truths. Once he has admitted them, he cannot free himself from them. One has to pay something.

From The Myth of Sisyphus and Other Essays (1955).

Who am I to disagree with Albert Camus? But on this point I do: I believe that exposing our truths is a critical first step to getting free from them. And I agree with James Kwak that it’s time we reckoned with the truths we hold about economics.

“Reckon” comes from Old English (ge)recenian — “to recount or relate” — and from Dutch rekenen and German rechnen, meaning “to count.” To reckon with our attitudes about money and work, happiness and meaning, means to bring our truths about those topics out into the open where we can evaluate whether they’re making us prey or setting us free. If we don’t do that, we’ll just keep mindlessly paying the price of holding them — wishing we could be Richard Cory, keeping ourselves in a state of meaningless malaise that sometimes — in the case of suicide — literally threatens our existence.

Lots more on economics coming up.

James Kwak is one of those guys: before graduating from Yale law School, he earned a Ph.D. in Intellectual history from UC Berkeley and had a career as a management consultant and software entrepreneur. For a sense of his perspective, check out his article The Curse of Econ 101 from earlier this year.

Alan Watts bridged the East/West philosophical divide. Today, many of his quotes read like a treasure trove of pop psychology advice. The title of his book The Wisdom of Insecurity: A Message for an Age of Anxiety is certainly as relevant for our time as it was when first published it in 1951.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

The Joy of Working (It’s Worse Than I Thought)

“There is but one truly serious philosophical problem, and that is suicide.
Judging whether life is or is not worth living amounts to
 answering the fundamental question of philosophy.”

-Albert Camus, An Absurd Reasoning (1955)

The last few posts had a lot in them about suicide. I really didn’t plan to write about suicide. I meant instead to talk about happiness and meaning in our work, particularly for lawyers and the legal profession — nice, safe topics. I mean, who can argue with enjoying our work?

Trouble is, as I did my research, suicide kept coming up, along with other topics I didn’t plan to write about. Some were predictable, like globalization, technology, and disruptive innovation. I’ve written about those before, although they came up in new ways that merit re-examination. But then a whole lot of uninvited, touchier subjects jumped onboard, such as income and wealth inequality, poverty and the welfare system, nationalism and immigration, and more.

Uh oh. If last year’s election taught me anything, it’s that public discourse has been largely displaced by what this Aeon Magazine article calls “moral grandstanding.” As a result, if you write something, it’s likely to be slapped with an assumption that you’re on mission to convert other people to a point of view, and thus the fight begins. I learned that the hard way when a Facebook “friend” pounced one of my shares, and before I knew it our other “friends” were cheering us on like students making a circle around us in the high school cafeteria after I accidentally stepped on his potato chips.

How about we don’t do that? At least not here.

I recently shared some of the economic research I’ve been doing in connection with these posts with a friend who’s a hedge fund manager. He immediately demanded that I define my terms. Whoa! I replied that I wasn’t pretending to be an economist, I’m just trying to figure out how the world of work is changing, and how that affects human beings. (If you’d like a book list of what I’ve been reading, you can check out my Goodreads page. Or email me.) Guess I won’t bring up economics again, I thought. And yet here I am, risking it in this column. Why?

Mainly, because my research keeps linking all those touchy subjects to the safe ones I started with, and because all of them — controversial or not — seem to be symptomatic of a worldwide clash of social and economic narratives. And that interests me, very much. Work as a life-giving human activity has been an enduring passion of mine since college, when I cut a headline out of a magazine that was based on the iconic “The Joy of Cooking” cover, except it substituted “Working” for “Cooking.” I pasted it on a bookshelf I lugged around for decades until it got lost in a recent move.

The headline was lost, but not the interest. I plan to keep writing about The Joy of Working because I care about the human beings getting squeezed by the cultural and commercial shifts that are currently revolutionizing the world of work. I care that the legal profession is at Ground Zero for many of these developments, with its endemic high levels of career dissatisfaction and related loss of personal wellbeing. And I care because my research shows that things are worse than I thought: feelings of a lack of meaning about our work aren’t just a complex and difficult social and economic phenomenon, they’re a plague that too often ends in self-inflicted death.

I also believe that, if anyone is positioned to steer public discourse toward constructive outcomes, it would be those directly engaged with how the law is learned and practiced, created and applied. We’ve already sailed some stormy seas together in this series, and we’re heading for more. I think we’re up for it.

One last that thing: I have no illusions about my own objectivity; I am as prone to cognitive bias as anyone. (We’ll take more about that, too.) Thus I invite you to remember that I intend this to be about conversation, not conversion. Plus, I’ll make the customary disclaimer that I write my own thoughts, not the CBA’s or CLE’s.

I will brave the discourse if you will.

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

But Isn’t Legal Work Essential?

“The most common complaint expressed within the legal profession
is a lack of meaning or sense of fulfillment from work.”

The above quote is from an article published by the Lawyers Assistance Program of British Columbia. But how can anyone think their work in the law lacks meaning? I mean, the law is essential to the functioning of society, isn’t it? Yes, but apparently essential doesn’t count for much in the pursuit of meaning.

Andrew Russel, Dean and Professor in the College of Arts & Sciences at SUNY Polytechnic Institute in Utica, New York, says this in his Aeon Magazine article, “Hail the Maintainers: Capitalism excels at innovation but is failing at maintenance, and for most lives it is maintenance that matters more” (April 7, 2016):

Innovation is a dominant ideology of our era . . . As the pursuit of innovation has inspired technologists and capitalists, it has also provoked critics who suspect that the peddlers of innovation radically overvalue innovation. What happens after innovation, they argue, is more important. Maintenance and repair, the building of infrastructures, the mundane labour that goes into sustaining functioning and efficient infrastructures, simply has more impact on people’s daily lives than the vast majority of technological innovations.

Maybe so, but the maintainers themselves aren’t buying their own importance. This Huffington Post article from May 11, 2017, reported a study by Britain’s Office of National Statistics that found that workers in “maintainer” jobs — manual labor, construction, building trades, processing plants, factories, agriculture — had the highest rates of suicide in the U.K. A 2016 Center for Disease Control and Prevention study reported similar results in the U.S., with rates highest among lumberjacks, farmworkers, fishermen, carpenters, miners, electricians, construction trades, factory and production workers, and others who build, install, maintain, and repair things.

Other noteworthy findings of both studies were that suicide rates were three times higher among men than women; the highest female suicide rate was among police, firefighters and corrections officers; the second highest female suicide rate was in the legal profession; and among the professions, lawyer suicides were in third place after doctors and dentists.

The CDC study speculated that the principle causes behind these statistics include job-related isolation and demands, stressful work environments, and work-home imbalance, all of which are endemic in the legal profession. The British Columbia LAP piece quoted above states flatly that:

From a health perspective it is unhealthy to do meaningless, unchallenging, uncreative work, especially for those that are intelligent and well trained.

The article reports that a sense of meaningless is expressed differently by older vs. younger lawyers:

[A sense of meaningless about their work] is stated more directly by older practitioners as boredom, lack of job satisfaction, just getting through each day, turning out work without time to contemplate, turning out product for clients like a machine, and lack of connection to clients, which is often expressed as lack of client loyalty. Legal professionalism has been eroded by the need for volume, speed and uniformity of work product.

The younger practitioners . . . ask, “What good am I doing?” They express a lack of control over work or life. They worry about the demands of clients, and that there is little opportunity for them to utilize creative thinking. They also ask if they can have a life and practice law. . . . [T]hey do not get a sense of fulfillment from practicing law. They do not get a sense of meaning from it and it seems to be valueless.

We’ve been looking at books, articles, surveys, and academic research from business, academia, the professional world, and even the United Nations. All agree that meaningless malaise in the workplace is worldwide and afflicts both men and women across a full range of occupations from the “maintainers” to professionals. Money doesn’t help, neither does living in a “happy,” first world country. Striving after wealth and income growth only makes things worse. Meanwhile, rates of self-destruction are alarmingly on the rise, especially in this century.

More next time.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Richard Cory and How the Other Half Lives

Does anybody else remember that early Simon & Garfunkel song “Richard Cory”? (I just heard somebody ask, “Who’s Simon & Garfunkel?” Somebody else is looking them up in Martindale. <Sigh> I feel old.) Check out this video: two guys in jackets and ties, one mic, one guitar… and that raw 60’s revolutionary edge. Here are the lyrics:

They say that Richard Cory owns one half of this whole town,
With political connections to spread his wealth around.
Born into society, a banker’s only child,
He had everything a man could want: power, grace, and style.

Chorus:
But I work in his factory
And I curse the life I’m living
And I curse my poverty
And I wish that I could be,
Oh, I wish that I could be,
Oh, I wish that I could be
Richard Cory.

The papers print his picture almost everywhere he goes:
Richard Cory at the opera, Richard Cory at a show.
And the rumor of his parties and the orgies on his yacht!
Oh, he surely must be happy with everything he’s got.

Chorus

He freely gave to charity, he had the common touch,
And they were grateful for his patronage and thanked him very much,
So my mind was filled with wonder when the evening headlines read:
“Richard Cory went home last night and put a bullet through his head.”

Chorus

The song was inspired by a poem of the same name, by Edwin Arlington Robinson, himself the son of a wealthy New England businessman:

Whenever Richard Cory went down town,
We people on the pavement looked at him:
He was a gentleman from sole to crown,
Clean favored, and imperially slim.

And he was always quietly arrayed,
And he was always human when he talked;
But still he fluttered pulses when he said,
“Good-morning,” and he glittered when he walked.

And he was rich — yes, richer than a king —
And admirably schooled in every grace:
In fine, we thought that he was everything
To make us wish that we were in his place.

So on we worked, and waited for the light,
And went without the meat, and cursed the bread;
And Richard Cory, one calm summer night,
Went home and put a bullet through his head.

“How the other half lives.” My dad used to say that when he encountered someone who was, by his standards, rich. He would have said that if he had ever met Richard Cory.

The song and poem drip with irony. Irony is an educated, acquired taste — something someone like Miuccia Prada might appreciate — yes that Prada, the kind the Devil wears. My dad didn’t qualify for irony, I guess. If he had, he would have noticed the irony in how he used the phrase.

This is from Wikipedia:

“How the Other Half Lives: Studies among the Tenements of New York (1890) was an early publication of photojournalism by Jacob Riis, documenting squalid living conditions in New York City slums in the 1880s. It served as a basis for future “muckraking” journalism by exposing the slums to New York City’s upper and middle classes. This work inspired many reforms of working-class housing, both immediately after publication as well as making a lasting impact in today’s society.”

Yet another irony is that Paul Simon and Art Garfunkel probably went on to become wealthier than Richard Cory was himself.

And here’s one last irony for us all:  After all those UVA and Gallup and United Nations surveys I’ve been writing about, plus all those opinions and analyses of eminent economists like Adam Smith, Richard Easterlin, and Angus Deaton, and all those quotes by rich and famous people about money and happiness… most of us would still side with the factory workers and townspeople — we would still trade places with Richard Cory, given half a chance.

What is up with that?

Something Rotten in Denmark

“Something is rotten in the state of Denmark”
-Marcellus, Hamlet, Act I, Scene 4

Last time, we considered some of the findings of a huge international survey of money, happiness, wealth, and meaning conducted by Gallup and a couple University of Virginia professors. Digging deeper:

One of the most disturbing findings involved suicide rates. Wealthier nations, it turns out, had significantly higher suicide rates than poorer ones. For example, the suicide rate of Japan, where per-capita GDP was $34,000, was more than twice as high as that of Sierra Leone, where per-capita GDP was $400.

The strange relationship between happiness and suicide has been confirmed in other research, too. Happy countries like Denmark and Finland also have high rates of suicide.

[The survey authors revealed] a striking trend: happiness and unhappiness did not predict suicide. The variable that did, they found, was meaning—or, more precisely, the lack of it. The countries with the lowest rates of meaning, like Japan, also had some of the highest suicide rates.”

From The Power of Meaning: Crafting a Life That Matters, Emily Esfahani Smith (2017)

The Power of Meaning cites further data showing that:

Suicide rates are generally higher in wealthier countries than in poorer ones.

According to the World Health Organization, global suicide rates have increased 60% since World War II.

In 2016, worldwide suicide rates were the highest in 30 years.

In the U.S., suicide among 15-24 year-olds tripled from 1950-2000.

Among the middle-aged, suicide rates have increased by over 40% since the turn of the 21st century.

The lack of belief that our lives are meaningful is spiking suicide rates — especially in wealthy First World countries whose citizens say they’re generally happy with their lives. The 2017 World Happiness Report confirmed these findings:  Denmark ranked #2 in the list of happiest countries, and Finland was #5, yet both countries had high rates of suicide.

The World Happiness Report is no lightweight exercise in psychobabble — it is generated on the highest level of worldwide policy making. This is how it describes its origins:

The first World Happiness Report was published in April, 2012, in support of the UN High Level Meeting on happiness and well-being. Since then the world has come a long way. Increasingly, happiness is considered to be the proper measure of social progress and the goal of public policy. In June 2016 the OECD committed itself “to redefine the growth narrative to put people’s well-being at the center of governments’ efforts.” In February 2017, the United Arab Emirates held a full-day World Happiness meeting, as part of the World Government Summit. Now on World Happiness Day, March 20th, we launch the World Happiness Report 2017, once again back at the United Nations, again published by the Sustainable Development Solutions Network, and now supported by a generous three-year grant from the Ernesto Illy Foundation.

The Report is long and packed with statistical analysis, tables, graphs, and other data-nerd content, but if you’re game for it, it makes for fascinating reading.

Both the UVA/Gallup survey and the World Happiness Report revealed that dissatisfaction with work is a key contributor to the feeling that life lacks meaning, and to the escalating suicide rate.

Imagine how different the legal profession would be if it sought to promote not just the happiness of its members (that would be radical enough!) but also a sense of meaningfulness about working in the law.

We’ll be talking more about that.

 

For a summary of the UVA/Gallup study, see ScienceDaily, 18 December 2013:  “Residents of poorer nations find greater meaning in life.” For the original study, see S. Oishi, E. Diener, “Residents of Poor Nations Have a Greater Sense of Meaning in Life Than Residents of Wealthy Nations,” Psychological Science, 2013. You can request a reprint here.

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Money, Happiness, Wealth, and Meaning

One reason money doesn’t make us happy is the stress of making it. The following is from Plutocrats: The Rise of the new Global Super Rich and the Fall of Everyone Else, Chrystia Freeland (2012):

Until a few years ago, the reigning theory about money and happiness was the Easterlin paradox, the 1974 finding by Richard Easterlin that, beyond a relatively low threshold more money didn’t make you happier.

But across countries, what millions of immigrants have always known to be true really is: the people of rich countries are generally happier than the people of poor countries.

The latest contrarian finding, however, is that moving to that state of greater wealth and greater happiness is decidedly unpleasant. As Angus Deaton, in a review of the 2006 Gallup World Poll, concluded, “Surprisingly, at any given level of income, economic growth is associated with lower reported levels of life satisfaction.”

Freeland also cites Angus Deaton for showing that “the richer you are, the more covetous you become” — not a likely prescription for happiness.

A 2014 U of Virginia/Gallup study weighed in with similar findings — Emily Esfahani Smith discussed them in The Power of Meaning: Crafting a Life That Matters, (2017):

Though the study was enormous, involving nearly 140,000 people across 132 countries, it was also straightforward. A few years earlier, researchers from Gallup had asked respondents whether they were satisfied with their lives, and whether they felt their lives had an important purpose or meaning. [Prof. Shigehiro Oishi of the University of Virginia and Ed Diener of Gallup] analyzed that data by country, correlating the levels of happiness and meaning with variables like wealth, rates of suicides, and other social factors.

Their findings were surprising. People in wealthier regions, like Scandinavia, reported being happier than those in poorer ones, like sub-Saharan Africa. But when it came to meaning, it was a different story. Wealthy places like France and Hong Kong had some of the lowest levels of meaning, while the poor nations of Togo and Niger had among the highest, even though people living there were some of the unhappiest in the study.

I.e., the ultimate wellbeing culprit is neither money nor the pursuit of it, but whether or not you believe your life has meaning and purpose. And according to this vast, worldwide survey, the residents of wealthy countries rate their lives as less meaningful than those in poor countries.

Analogizing from these findings to the legal profession, we would expect that, because the legal profession runs on the higher side of financial wellbeing, lawyers would report higher levels of happiness than less well-paid workers, but would also suffer from meaning malaise. And, since one of the wellbeing factors used in the survey was rates of suicide, we would also expect lawyers to have a correspondingly higher rate of suicide.

The high lawyer suicide rate (third highest among professionals, after doctors and dentists) has been well documented, and as we’ve been seeing, lawyers as a whole aren’t generally happy with their lives either, despite their profession’s higher rate of wealth.

We’ll look more into the meaning part of the equation next time.

Richard Easterlin is a professor of economics at USC. Sir Angus Stewart Deaton, FBA, is a British American economist and professor at Princeton. In 2015, he was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare.

For a summary of the UVA/Gallup study, see ScienceDaily, 18 December 2013: “Residents of poorer nations find greater meaning in life.” For the original study, see S. Oishi, E. Diener, “Residents of Poor Nations Have a Greater Sense of Meaning in Life Than Residents of Wealthy Nations,” Psychological Science, 2013.

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Can Money Buy Lawyer Happiness?

I thought the answer might be yes. Why? Because a few years back I blogged about the 2013 Colorado Supreme Court Lawyer Satisfaction and Salary Survey, which showed that, although 2/3’s of Colorado lawyers didn’t like their jobs enough to recommend them to someone else, at least they liked the money. And because a widely-cited study published the following year found that people in wealthier countries are happier than people in poorer countries. Put those two together, and maybe lawyers might say they’re happy overall, despite their job dissatisfaction.

I was wrong. I went several pages into the results of several Google searches and found nothing about happy lawyers or what makes them so. Happiness isn’t bad news, so maybe it doesn’t get reported, but still… why the long faces? More Google searches turned up a LegalCheek.com poll conducted in Great Britain the day after Theresa May gave the required notice of Great Britain’s withdrawal from the European Union. It reported that 70% of British lawyers weren’t happy about Brexit. But that doesn’t really count, does it?

The Happy Lawyer: Making a Good Life in the Law (2010) by law professors Nancy Levit and Douglas O. Linder had a promising title, but then, after an extensive review of the literature on lawyer happiness, the authors concluded that “[M]oney is the root of virtually everything that lawyers don’t like about their profession: the long hours, the commercialization, the tremendous pressure to attract and retain clients the fiercely competitive marketplace, the lack of collegiality and loyalty among partners, the poor public image of the profession, and even the lack of civility.”

So… money doesn’t just fail to make lawyers happy, it actually makes them unhappy. Hmmm.

Money certainly doesn’t make associates happy, even though 2016 saw associate salaries leap to new heights – at least in the world of BigLaw. In fact, the position of associate attorney came in rock bottom in a 2013 CareerBliss survey of not just lawyers, but 65,000 employees of all kinds. Forbes, “The Happiest And Unhappiest Jobs In America,” March 22, 2013. (Here’s Above the Law’s take on that story.)

A couple years after the CareerBliss poll, the Dean of Pepperdine Law School countered that well, there at least some happy associates. Go ahead — guess who they were — answer below.

If money doesn’t make lawyers happy, then what does? Earlier this year, Global Financial (“Financing Justice”) reported survey results by Robert Half Legal that a business casual dress policy helps lawyers deal with stress. Not quite the same as making lawyers happy.

Seriously? Business casual is the best we can do?

An August 2016 Above the Law article had a promising title — Why Are Lawyers So Happy? — but it turned out to be a tongue-in-cheek response to an earlier article by Jeena Cho, author of The Anxious Lawyer, all-around great person and reigning Goddess of Mindfulness in the Marketplace. (I’ve met Jeena, and she would be horrified at me giving her that title, but I do it with a smile, and besides, I think it’s true.) Both articles were written in response to a survey conducted by the ABA and the Betty Ford Foundation, which Forbes reported in an article whose title tells you everything you need to know:  “Study Indicates Lawyers Struggling With Substance Use And Other Mental Health Issues,” July 30, 2016.

No, money doesn’t buy lawyer happiness — according to pollsters anyway. Of course some lawyers are happy — with the money, their work, and maybe even life in general. I hope that’s you, and I hope you know lots of people like you. As for the rest, it’s hard to be happy about much of anything when you don’t like your work.

We’ll keep following the thread of money and happiness next time, to see what else we can learn from it. In the meantime, here’s your answer: Who are the happiest associates?  Tax lawyers.

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Can Money Buy Happiness?

Let’s ask some more famous people:

“Happiness resides not in possessions, and not in gold, happiness dwells in the soul.” –Unknown

“By desiring little, a poor man makes himself rich.” -Democritus

“Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has, the more one wants.” –Benjamin Franklin

“It is my opinion that a man’s soul may be buried and perish under a dung-heap, or in a furrow field, just as well as under a pile of money.” –Nathaniel Hawthorne

“When I was young I thought that money was the most important thing in life; now that I am old, I know that it is.” -Oscar Wilde

“Wealth is the ability to truly experience life.” –Henry David Thoreau

“He who loses money, loses much; he who loses a friend, loses much more; he who loses faith, loses all.” -Eleanor Roosevelt

“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” -Franklin D. Roosevelt

“It’s a kind of spiritual snobbery that makes people think they can be happy without money.” –Albert Camus

“I am opposed to millionaires, but it would be dangerous to offer me the position.” -Mark Twain

“I’d like to live as a poor man with lots of money.” -Pablo Picasso

“Money is better than poverty, if only for financial reasons.” –Woody Allen

“There are people who have money, and there are people who are rich.” –Coco Chanel

Thanks to Aol.finance for those quotes. They’re inconclusive, I’d say, although they do tell us that money brings out the inner philosopher and humorist in famous people. Maybe we should have asked Adam Smith:

As I am reminded every year by my students, those who encounter Smith’s writings for the first time are usually quite surprised to learn that he associated happiness with tranquility—a lack of internal discord—and insisted not only that money can’t buy happiness but also that the pursuit of riches generally detracts from one’s happiness. He speaks, for instance, of “all that leisure, all that ease, all that careless security, which are forfeited forever” when one attains great wealth, and of “all that toil, all that anxiety, all those mortifications which must be undergone” in the pursuit of it. Happiness consists largely of tranquility, and there is little tranquility to be found in a life of toiling and striving to keep up with the Joneses.

The Problem With Inequality, According to Adam Smith, The Atlantic, June 6, 2016, Dennis C. Rasmussen, professor of political science at Tufts University.

According to the “invisible hand” man himself, both pursuing and possessing wealth make you unhappy. Maybe, but most of us are with Clare Booth Luce, Oscar Wilde, Albert Camus, Mark Twain, and Woody Allen — or with Tevye in his exchange with Perchik the Bolshevik:

Perchik: Money is the world’s curse.

Tevye: May the Lord smite me with it! And may I never recover!

I mean, all these famous (and mostly rich) people are entitled to their opinion,  but we’d like to find out for ourselves if money could make us happy — we’re pretty sure we could handle it.

And for purposes of this blog, what we’d really like to know is whether money can buy lawyer happiness.

We’ll talk more about that next time.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Professional Paradigms New and Old (Part 7): Traumatic Transformation, and What Do You Do When Your Paradigm is Done Shifting?

Professional paradigm shifts require transformation not just for the profession’s culture, but for the individuals in it.

wired%20to%20createIn their book Wired to Create: Unraveling the Mysteries of the Creative Mind, authors Scott Barry Kaufman and Carolyn Gregoire identify several ways individual paradigm-shifting transformation gets started. One is inspiration, which they say comes in three stages:

The first stage is that unsolicited moment when we feel inspired, “by a role model, teacher, experience, or subject matter.”

“Next comes transcendent awakening — a moment of clarity and an awareness of new possibilities.

“Which leads to the third hallmark feature of inspiration: a striving to transmit, express, or actualize a new idea, insight, or vision.” (Emphasis in original.)

Individual paradigm shifts are also prompted by traumatic life events, resulting in what psychologists call “posttraumatic growth.” Again from Wired to Create:

After a traumatic event, such as a serious illness or loss of a loved one, individuals intensely process the event—they’re constantly thinking about what happened, and usually with strong emotional reactions.

[T]his kind of repetitive thinking is a critical step toward thriving in the wake of a challenge… we’re working hard to make sense of it and to find a place for it in our lives that still allows us to have a strong sense of meaning and purpose.

I have personal experience with both inspiration and trauma. As I wrote a couple weeks ago, “I have a personal, real-time, vested interest in change because I’ve been on a steep personal transformation learning curve for nearly a decade — for all sorts of reasons I’ve written about in my books, my personal blog, and sometimes in this column.” Learning, writing, and conducting workshops about the psychological and neurological dynamics of transformation has been has been my way of being proactive about something I’ve come to call “traumatic transformation.”

ApocalypseIn fact, I just finished a new book that completes my decade-long intensive on personal transformation. As always, I’ve learned a lot writing it, but the most startling discovery is that paradigm shifts don’t go on forever: a time actually comes when the new fully replaces the old. Now that I’ve finished it, I can see that writing the book was in part a way for me to bring closure to my years of personal paradigm shifting.

That being the case, I’ve decided that it’s time for me to set aside my transformation journey and let its lessons play out for awhile. Which is why, after today’s post, I’m going to take an indefinite vacation from writing this column. At this point, I have no fresh thoughts to add to what I’ve been writing about for the past several years. Instead of repeating myself, I want to take a break and see if anything new comes up. If so, I’ll come back and share it.

In the meantime, my endless thanks to the Colorado Bar Association and CBA-CLE and to my fabulous editor Susan Hoyt for letting me trot out my research and theories and personal revelations in this forum. And equally many thanks to those of you who’ve read and thought about and sometimes even taken some of these ideas to heart and put them into practice.

On the wall above the desk where I write, I have a dry-mounted copy of the very last Sunday Calvin and Hobbes comic strip, which I cut out of the newspaper the morning it ran. (Speaking of paradigm shifts, remember newspapers?) There’s a fresh snow, and our two heroes hop on their sled and go bouncing down a hill as Calvin exults, “It’s a magical world, Hobbes ol’ buddy… Let’s go exploring!”

I suspect Calvin and Hobbes are still out there, exploring. I plan to join them.

You?

Apocalypse: Life On The Other Side Of Over was just published yesterday. It’s a free download from the publisher, like my other books. Or click on this link or the book cover for details.

And if we don’t run into each other out there exploring, feel free to email me.