Reviewer: Peter van de Ven I remember being shocked
the first few times I went to Africa. I was shocked when I met
a one-legged taxi driver in Kenya. I was shocked when I met Sonia,
an orphan schoolgirl in Rwanda. And I was shocked when I met a disabled
subsistence farmer in Mozambique. What shocked me wasn't their poverty,
but their happiness. I found their happiness confronting,
far more confronting than poverty. Of course, not everyone was happy, but of those above a basic
subsistence threshold level, I was surprised at how
genuinely content many of them were. And I became fascinated
by this notion, this idea of happiness. And since then, I've researched it,
I've worked on it, I've thought about it. I'm interested in it
from an economics perspective; it's one of the things
that I research at Oxford. And I'm interested in it
from a social enterprise perspective because happiness is, after all,
the ultimate social outcome. I think it's particularly appropriate
to talk about happiness because we have with us
the Prime Minister of Bhutan, the very man who pioneered,
who introduced, and who championed the idea
of gross domestic happiness, rather than GDP, as a way
of tracking a country's progress, as a way of monitoring
how governments are doing. But before we go into that, I want
to begin with a little quiz, a game. It's just a simple multiple-choice quiz, and I've invited some other
participants to join us on stage. So, I want you to just raise your hand, I want you to answer honestly
when I give the questions. So the first question. Imagine that you're competing
in the Olympic Games, representing your country, what would you prefer
out of the following: would you prefer to come second,
to come third, or to come second last? Answer honestly:
who would prefer to come second? Raise your hand. Excellent! Who would prefer to come third? And who would prefer
to come second last? Excellent. It seems a large chunk
of you wants to come second last. I'm not sure I'd be selecting you
for my Olympic team, but - (Laughter) The monkeys, they select
a third, a third, a third; they don't quite understand the question,
but they knew there are three options. (Laughter) It's probably no surprise
that amongst the general population, most prefer second. So that's question one. Question number two. Imagine that you're given
one of two options: either you win the lottery,
and you get ten million dollars tomorrow, you can spend it however you want; or option B, alternatively, you get
a very small payment tomorrow, but you get gradual payments
throughout your lifetime - increasing payments, and in total, you get
eight million dollars over the course of your lifetime. If I gave you that option right now,
what would you pick? Who would pick option A? A lot of people. Who would pick option B? Excellent. Amongst the general population, most people seem
to be quite short-sighted; most people like
the ten million dollars tomorrow. Again, the monkeys 50:50. (Laughter) They did recognize
there were two options, not three. Third and final question. You get to choose your salary:
what do you pick? You get 50,000,
and everyone else gets 50,000. You get 50,000
and everyone else gets 60,000, or you get 40,000 and everyone else
you know gets 30,000. Who would pick option A? Who would pick option B?
Virtually no one. Who would pick option C? I think there's one person
in an audience of about 200. You're pretty consistent
with the general population, most go for option A. The monkeys, no surprises there. But let's now think
about what the actual answers are. What does the research say
about what actually makes us content, what actually makes us satisfied, what actually makes us happy? To question one, the answer is actually to come third, which I think was the lowest
of the three options that you all gave. There's no shortage of silver medalists
who appear unhappy. (Laughter) So that was question one. Question two, I think you did better on. You picked option B,
you went against the general population, and I think you beat the monkeys
on this occasion: they beat you on question one;
you won question two. And for question three,
the correct answer was actually C, which I think only one person got correct. And so the monkeys beat you
on two out of three on those, in terms of what actually makes us
content, satisfied, and happy as the research has shown. So I think it's fair to say
that in general, you're slightly better predictors
of happiness than the general population, but you're still pretty pathetic,
I'm sorry to say. I think the monkeys beat you,
maybe that's why they're smiling. They won two out of three. And what's interesting
is that it's not only us that's bad predictors of happiness. The macro data actually
support this as well. We're wealthier than ever,
but unhappier than ever. We're more prosperous,
but more depressed. We're less satisfied. We have faster and faster transport, but we're faster and faster
to complain about it. In many countries, there are now
more suicides than homicides. We now have more goods
and services than ever before. We have technology
improving exponentially, but we don't see a corresponding increase in our life satisfaction,
in our happiness. It's perhaps one of the great
paradoxes of our time. And I think the obvious question is, Why is it that governments and individuals
are such bad predictors of happiness? Why is that we get it wrong so often? And I think it's because
we don't really understand why it is that we're often unhappy. And so the obvious question is,
Why is it that we're unhappy? What's the explanation? Now it's not an easy question to answer, but it's one that I've thought about,
researched, and delved into. And through my research over the years,
through thinking about it, I think there's one explanation
that I find far more compelling, far more plausible,
far more persuasive than any other. And that explanation isn't that we have so much choice
that we get stressed. It's not that we
are economically worse off; in many cases,
we're economically better off. It's not that we just have great reporting
of depression and suicide; that's true, but it only explains
a small portion of the data. It's not due to family breakdowns
or reduced freedom. You know, the reason why we're unhappy,
the most compelling reason - as shown by the data,
as shown by research - relates to expectations. At a very basic, simple level, we're unhappy when
our expectations of reality exceed our experiences of reality. When our expectations exceed reality. And I'd like to call this
an expectation gap, when our expectations
are greater than reality. It's a very simple concept,
but it's a hugely important concept to fully understand,
to fully get our head around. And to help us get our head around it, I'd like to think in terms of three
different types of expectation gaps - three different types of gaps based on the different ways
in which we form expectations. I think we form expectations
based on our imagination, based on those around us,
and based on our past experiences. So to this first type of expectation gap,
the imagination gap, which occurs when our
imagination exceeds reality. You see, when we choose to buy goods,
we choose from a range of options. When we choose where to travel to,
we often choose from a range of options. When we choose which leader to elect,
we often choose from a range of options. And how do we make that decision? What we do is that we choose the one
that we think will be the best. We choose the one that we imagine
will be the best of all the options. What we do is we try to maximize
our utility at a given price, that's how most people make decisions. To do otherwise would be to choose an option that we
didn't think would be as good, which seems a bit counterintuitive. Now the problem here is
that the very act of choosing the thing that we think will give us
the greatest happiness, that very decision-making process is the thing that actually
undermines our happiness because what it means
is that when we then see reality, when we then experience it, whether it's the good or the place we travel to
or the leader that we elect, it's highly likely that that reality
won't live up to our expectation. And that leads to disappointment. And technology makes this so much worse. What technology has loused is things that are actually
unrealistic to appear real, things that aren't even
on the happiness scale are made to seem as though
they are actually possible. We photoshop things in,
we airbrush things out, we digitally enhance photos. And what this does is
it makes us romanticize travel and makes us come up
with fantastical ideas about places that reality
simply can't live up to. So we think Sagrada Família
looks like this, when it actually looks like this. (Laughter) We think the Taj Mahal
always looks like this, when, actually, often it looks like this. We think that the Mona Lisa
looks like this, when, actually, if we go and visit it,
it's more likely to look like this. (Laughter) What technology does is that it
skews our vision, it distorts reality and makes the unreal seem real. Indeed, many of the times that when we're happiest
when we go travelling, they're actually the times when we
stumble across things we didn't expect, when we discover things for ourselves, where we don't have preconceived
notions of different places. And what also makes this worse
is selection bias. Many content-based algorithms, whether it's a Google search
or Facebook News Feed, the way that it presents information is that it prioritizes those things
that are the best images, the most shared images,
the most liked images. You're more likely
be shown a photo on Facebook if it has 200 likes than if it has 2. And so we come to think of the best images
as being normal, as being average. And this also plays with our imagination. That's selection bias. Then there's persuasion, because politicians often get elected
on the basis of promising things that they can't deliver,
by raising our expectations. Who would you
be more likely to vote for? A politician that says, "I'll fix
your problems if you vote for me," or someone who says,
perhaps more honestly, "Things will probably be the same,
whether you vote for me or not"? Probably you'll vote for the former, but you'll probably
be disappointed as well. And so we're in this constant cycle
of expectations being raised and hopes being dashed. It's the same with companies. I mean, companies
are more likely to tell us that watches have never
performed tasks so quickly. They're probably not going to tell us
batteries have never run out so quickly, both of which are true. And so when you have technology, when you have persuasion,
and when you have selection bias, what that means is that we
imagine and demand and expect more than reality can provide. And when the limitless
potential of our minds is met by the confined nature of earth, we're disappointed, we're unhappy. Expectations and disappointments
irrevocably intertwined. In terms of beauty, it's no wonder
that self-esteem levels are so low. I mean, advertisers learned long ago that if you can make
people hate themselves, you can sell them things. Now they're applying it
time and time again, and we see this. What we see is advertisers showing
only the best before-and-after photos. What we see is pictures of models
who are made to seem perfectly even though they're not. We've become a society
of complainers, of perfectionists, of counter-factual historians - people who always imagine different
and better outcomes for ourselves, but people whose imagination
can't be satisfied. So that's the imagination gap. That's why our imagination
exceeds reality, and that's the first main reason
why we're unhappy. The second main type
of expectation that we have, I like to call the interpersonal gap. That's where we compare our reality
to the reality of others. Put simply, we judge ourselves
based on what we experience around us. If you earn 50,000 dollars
in a poor neighborhood, you'll feel rich. If you earn 50,000 dollars
in a wealthy neighborhood, you'll feel poor. If you get a small pay rise, but everyone around you
gets a large pay rise, you'll be disappointed. Your gain is someone's pain;
someone's pain is your gain. Unfortunately, it's a bit of a zero-sum game,
or so it seems. And it's not only
relative income that matters; it's also relative
appearance that matters. One person's plastic surgery
is another's psychic loss. Indeed, research has shown
that we're actually happier when we're with worse looking people because we're perceived by others
to be objectively better looking. So when your friend asks you
to come to a bar or to a club with them, you know why. (Laughter) And what's particularly
interesting about this is that we have an asymmetry of emphasis - we prioritize, we focus
on one end of the spectrum. We focus on the rich,
the famous, the beautiful, and pay less attention to the other end. And so we're made to seem poorer,
made to feel poorer, made to feel less successful
than we actually are. It's almost as though we're running
on a hedonic treadmill, constantly striving to be happy,
but getting no closer, because when our standard
of living improves, if everyone else's standard
of living improves as well, we don't always feel happier. So that's the second way
in which we form expectations, based on others around us. The third and final way is based on our past,
based on our past experiences. I call this the intertemporal gap. And we're unhappy when our past reality
is better than our present reality. Take two people who have the same average lifetime income. There's person A whose income
decreases over their lifetime, person B whose income increases. Now, research shows that you're always
happier if you're person B, if you have that increasing income, even though the average might be the same. Why is this? It's because of something
that psychologists refer to as anchoring. We compare to our past,
and if you're constantly improving, constantly exceeding expectations,
constantly moving forward, you're generally happy. The reverse is true if you're person A. And so what does this mean
in terms of raising children? I think often we tend to spoil children; we tend to give them everything
to give them the best start in life. But often the best intentions
don't always lead to the best outcomes. Yes, we should support children, but if we give them everything, it's much harder for them
to have what I call a positive intertemporal gradient - it's harder for them to improve
over time throughout their life and that actually potentially
undermines their happiness. While I'm talking about parenting, I think another problem in our society is that we tend to tell children
that they're special, that they're unique, that they're one-of-a-kind,
that they're amazing. We tell them they can be
Prime Minister or President, that they can be the next
Mark Zuckerberg. We tell them that they'll be
Beyonce one day. What this means
is that we raise their expectations. And so when that child gets a normal job, when they start a business,
and it fails, like most do, when they're seeing career peaks with a rendition
of single ladies in the shower, they're disappointed, they're unhappy, their expectations haven't been satisfied. Yes, we want to give children self-belief, but we don't want to delude them,
and we don't want to delude ourselves. So what we see is that our happiness
is largely determined by expectations. Our expectations are largely determined
by what we consider to be normal. And what we consider to be normal
is largely based on our imagination, based on others around us,
and based on our past. And so we have these constant battles: the battle between
our imagination and our reality; the battle between the reality
that we experience and what we think or perceive
that others experience; the battle between our reality
and our past reality. How can we win these battles? I think the first challenge, the challenge for entrepreneurs
and businessmen, for parents, for legislators,
for magazine editors is to take happiness seriously, to take expectations seriously. I think, often we relegate happiness
to the world of art, not science. We dismiss it, we think of it in terms of hippies
rather than businessmen. What we want is for entrepreneurs to focus on actually
improving contentment, not just increasing consumption. In terms of winning
the imagination battle, I think it's important that we
make it known to content providers, the importance of actually
having realistic representations of images, people, and places and events. And we might even go so far as to ban things
like digital enhancement in ads. In terms of winning
the interpersonal battle, I think it's important that governments
prioritize income equality and that we learn to compete
against ourselves rather than against others. And in terms of that intertemporal battle, I think it's important
that we support kids, encourage kids, but also make them realize
when it's impossible and not to give them
completely unrealistic expectations. Let me conclude. We seem to have been seduced
into a way of life that almost conspires in every way against the most basic level
of contentment. We're terrible predictors
of what will make us happy. I mean, anytime monkeys beat you,
you know there's a problem. We're terrible predictors of happiness because the way in which we rationalize, the way in which we make decisions
is optimal on the basis of actual levels, absolute levels, but the way in which we feel is based on relative outcomes,
based on expectations. It's expectation that explains why a bronze medalist can be happier
than a silver medalist, because the silver medalist
imagines coming first, the bronze medalist
imagines coming fourth. It's expectation that explains why,
often, lottery winners aren't that happy; their happiness doesn't last because they don't have
that increasing level of satisfaction throughout their life. It's expectation that explains
why you can be happier with an income of 40,000
to an income of 50,000. We often think of happiness
in isolation, in a vacuum, when in reality our happiness
is far more complicated; it's far more intertwined with our community,
our imagination, and our past. And it's important
that we think carefully about how our minds work,
how our feelings work, how our expectations work. And it's important that we change
the way in which we make decisions so that our thinking process
matches our feeling process. Ladies and gentlemen, for entrepreneurs that want
to improve the lives of others, as well as for people
that want to be happy, I think the first step
is understanding why we're unhappy. And I hope that the next time,
if ever it happens, that your decision-making prowess
is compared to that of monkeys, I hope you come out on top. Thank you. (Applause) (Cheers)
Not bad. Fast forwarding to about the 6 minute mark will get right to the gist.
Disappointment naturally follows when expectations are not met, and expectations will surely not be met if they are not accurate.
If we focus on what we do, rather than on results, our expectations remain much better-aligned with reality. If, for example, I want a better job, I can do all the things that will help me to find it, but actually getting that job (and what exactly that job will be) is naturally uncertain. That's an accurate expectation, one that will not be easily disappointed.
Doing the work will, on the one hand, yield the best result that we can produce for ourselves, and on the other, it will also yield an uncertain result. Either way, we'll just be doing the work again the next day anyway, so it really does not matter.
Accepting the outcome without complaint is not complacency, or laziness, or shrugging off our responsibilities to fate. There is, after all, no escaping the uncertainty, and nothing better for us than to do the best we can. It's just deciding to not complain, to not be disappointed, and to not falsely expect that we can reach some nirvana where everything is finally done, the tasks are finished, and we can finally be happy. The tasks are always there, the doing is always there, and what's happening right now is fine, and what happens tomorrow is fine, and we're doing everything we're supposed to do, and we can be happy right now and tomorrow and every day, living life and doing what we should do.