The unwanted consequences of money from the point of view of psychology and the Economy of Happiness

Abstract

Money is the central tool of many aspects of the economy, companies, individuals and governments give money a preponderant role in decision making. The main objective of this work was to analyze the consequences of money in society from various aspects, based on a review of the literature of various disciplines such as the Economics of Happiness, positive psychology and the psychology of motivation. The methodology used was of an analytical-conceptual nature. The advances in the different disciplines suggest that, sometimes, the use of money ends up causing unwanted consequences, often causing a result exactly opposite to the desired one. Indeed, monetary incentives can reduce the intrinsic motivation of employees, affecting the productivity of companies and the happiness of workers who, for their part, do not see the increase in their income reflected in an increase in happiness in the same proportion. The same is observed at the aggregate level, where despite the obsession of governments with the indicator of the gross domestic product, an increase in it is not equivalent to higher rates of happiness of the population, as explained, for a long time, by the Economics of happiness. We find ourselves, then, with companies willing to incur a cost to increase their productivity and employees willing to sell their time to the highest bidder, but sometimes neither some obtain the desired productivity nor others the happiness that, they believe, the increase in their income levels will bring.