Danny Finkelstein thinks Fred Goodwin is “showing a poor appreciation of his own real interest (because he is valuing money too much and social standing too little).” He has, says Danny, “overestimated the marginal value of money.”
The substance behind Danny’s point is that, generally speaking, money does little to make us happy - though some new research questions this.
But I suspect Goodwin is well aware of this. It’s precisely because the marginal utility of money is so low that he needs so much of it. If money bought him a lot of happiness, he could get by on a lot less than £693,000 a year.
What I’m not sure about is Danny’s claim that social standing matters more than income.
I know of no good research showing that it, on its own, enhances well-being.
Yes, it can contribute to well-being indirectly - by raising income or, more strongly, by making it easier to find friends (pdf).
And there might well be a correlation between social standing and happiness, simply because social standing is correlated with a higher position in hierarchies - say, at work - and this makes people happy not only because a high rank is by definition a positional good, but also because it is associated with greater autonomy, which is a big source of happiness.
And there’ll also be a correlation between happiness and reputation simply because the things that give us a good reputation - helping others, doing good work - also make us happy.
None of these links, however, mean there’s a direct causal link from reputation to happiness.
I suspect there might not be. One reason why I think I’m happier now than when I was younger (despite the U-shape in happiness over the life cycle) is precisely that I’ve stopped giving a damn what anyone thinks about me. If you care about your reputation, you end up worrying about things you can’t easily control. You become like Heather Mills, ranting hysterically about the press.
This is pretty much the exact opposite of Mihaly Csikszentmihalyi’s recipe for happiness - flow. He says we maximize happiness when we lose ourselves in an activity - playing music or sport say - when we are in control, and yet oblivious to our own ego.
Obviously, Goodwin’s happiness depends upon him not worrying about his reputation. But could this be true for the rest of us as well?
Another thing: I don't think we should under-estimate the blow to well-being that Goodwin has suffered. The realization that he was not as in control of RBS as he thought is a catastrophic blow to his self-image - the sort of thing that can easily lead people to suicide.
The substance behind Danny’s point is that, generally speaking, money does little to make us happy - though some new research questions this.
But I suspect Goodwin is well aware of this. It’s precisely because the marginal utility of money is so low that he needs so much of it. If money bought him a lot of happiness, he could get by on a lot less than £693,000 a year.
What I’m not sure about is Danny’s claim that social standing matters more than income.
I know of no good research showing that it, on its own, enhances well-being.
Yes, it can contribute to well-being indirectly - by raising income or, more strongly, by making it easier to find friends (pdf).
And there might well be a correlation between social standing and happiness, simply because social standing is correlated with a higher position in hierarchies - say, at work - and this makes people happy not only because a high rank is by definition a positional good, but also because it is associated with greater autonomy, which is a big source of happiness.
And there’ll also be a correlation between happiness and reputation simply because the things that give us a good reputation - helping others, doing good work - also make us happy.
None of these links, however, mean there’s a direct causal link from reputation to happiness.
I suspect there might not be. One reason why I think I’m happier now than when I was younger (despite the U-shape in happiness over the life cycle) is precisely that I’ve stopped giving a damn what anyone thinks about me. If you care about your reputation, you end up worrying about things you can’t easily control. You become like Heather Mills, ranting hysterically about the press.
This is pretty much the exact opposite of Mihaly Csikszentmihalyi’s recipe for happiness - flow. He says we maximize happiness when we lose ourselves in an activity - playing music or sport say - when we are in control, and yet oblivious to our own ego.
Obviously, Goodwin’s happiness depends upon him not worrying about his reputation. But could this be true for the rest of us as well?
Another thing: I don't think we should under-estimate the blow to well-being that Goodwin has suffered. The realization that he was not as in control of RBS as he thought is a catastrophic blow to his self-image - the sort of thing that can easily lead people to suicide.
I agree - Goodwin is the symbol ( hate figure) for ALL the bankers, and someone has to take the blame. Someone described him to me today as dead meat walking - and suggested he might even end up inside.
Posted by: kinglear | March 05, 2009 at 07:58 PM
Is the Government getting him on the cheap? Effectively he is being paid £700,00 a year to be the number one fall guy, and helping to divert a fair bit of attention from weak management/regulation of the banking system. He's doing a lot of people a lot of favours in the process.
Posted by: Bruce | March 06, 2009 at 12:53 PM
Raivo Pommer
raimo1@hot.ee
Schwarze geld
Die Schweizer Regierung will am Bankgeheimnis vorerst nicht rütteln. Sie bietet allerdings Gespräche über die anonyme Zinsbesteuerung, wie sie schon mit der EU besteht, und die Amtshilfe an. Nach einer Regierungssitzung sagte Bundespräsident und Finanzminister Hans-Rudolf Merz, die Schweiz habe viele völkerrechtliche Verträge geschlossen, die eine Grundlage für den Informationsaustausch mit anderen Staaten böten. Mit einer Expertengruppe soll diese Zusammenarbeit über „Steuerdelikte“ verstärkt werden, kündigte Merz an. Der Finanzplatz dürfe keine Wettbewerbsnachteile erleiden. Zugleich schloss der Finanzminister nicht aus, dass die Schweiz auf eine „schwarze Liste“ geraten könne.
Die Schweiz leistet Amtshilfe nur bei mutmaßlichem Steuerbetrug, nicht jedoch bei Steuerhinterziehung. Der Begriff „Steuerdelikt“, den Merz jetzt verwendete, lässt den weiteren Weg offen. Merz hatte vor wenigen Tagen gesagt, das Bankgeheimnis solle „weiterentwickelt“ werden. Mit ihrem Gesprächsangebot versucht die Regierung dem wachsenden internationalen Druck zu begegnen. In der Finanz- und Wirtschaftskrise haben die Kritiker vermehrt Gehör gefunden, welche die „Steueroase“ Schweiz austrocknen wollen. So erwägen die wichtigsten Industrie- und Schwellenländer (G-20) unter Führung der Vereinigten Staaten, Großbritanniens, Frankreichs und Deutschlands entsprechende Beschlüsse auf ihrem Weltfinanzgipfel am 2. April in London. Eine Teilnahme der Schweiz wurde abgelehnt.
Posted by: hans merz story | March 06, 2009 at 08:22 PM
Raivo Pommer
raimo1@hot.ee
Geldschloss
Die Schweiz, Luxemburg und Österreich suchen einen Weg, wie sie einen Rest ihrer Bankgeheimnisse retten können
Vier Wochen vor dem Treffen der 20 wichtigsten Wirtschaftsnationen der Welt (G20) kommt Bewegung in die Riege der europäischen Steueroasen. Die Schweiz, größter Finanzplatz für internationale Privatvermögen, hat sich am Freitag offiziell zu einer weiteren Aufweichung ihres Bankgeheimnisses bereit erklärt. Ähnliche Signale werden von einem Treffen der Finanzminister der Schweiz, Österreichs und Luxemburg am Sonntag in Luxemburg erwartet.
"Wir wollen die internationale Zusammenarbeit bei Steuerdelikten verbessern", sagt der Schweizer Bundespräsident und Finanzminister Hans-Rudolf Merz nach einer Kabinettssitzung in Bern. Die Drohungen von Seiten großer Industriestaaten seien ungerechtfertigt, aber ernst zu nehmen. Für die Schweiz gelte es zu verhindern, dass sie von der G20 oder einem ähnlichen internationalen Forum auf eine Schwarze Liste gesetzt werde. "Auf Verträge einzugehen, die unter Sanktionen entstanden sind, wäre ganz schlecht", sagte Merz. Erwartet wird, dass Österreich und Luxemburg bei dem Treffen am Sonntag ein ähnliche Position einnehmen werden. Belgien und Luxemburg, so sagte der britische Botschafter in Bern jüngst, hätten ohnehin signalisiert, dass sie das Bankgeheimnis nach 2013 "nicht in dieser Form weiterführen werden". Ein Sprecher des Luxemburger Finanzministers wies diese Darstellung am Freitag jedoch zurück.
Posted by: suisse story | March 07, 2009 at 01:31 PM
Shakespeare agreed with you in Othello: "Reputation, reputation, reputation! I have lost my reputation. The better part of me is gone, and what remains is bestial".
Posted by: Alex | March 08, 2009 at 04:00 PM
If money doesn't make you happy - you are shopping at the wrong shop.
Posted by: john malpas | March 09, 2009 at 12:34 AM
Raivo Pommer
raimo1@hot.ee
Asia krise
Die Finanzkrise hat nach einer Studie der Asiatischen Entwicklungsbank (ADB) weltweit Vermögenswerte von 50 Billionen Dollar - umgerechnet 39,4 Billionen Euro - vernichtet. Asien war stärker betroffen als andere aufstrebende Regionen.
Dort seien 9,6 Billionen Dollar vernichtet worden, etwas mehr als das Bruttoinlandsprodukt (BIP) eines ganzen Jahres, berichtete die ADB am Montag an ihrem Sitz in Manila (Philippinen). ADB-Präsident Haruhiko Kuroda sprach von der schlimmsten Krise seit der großen Depression im vergangenen Jahrhundert. Doch werde sich Asien als eine der ersten Regionen von der Krise erholen.
Posted by: haruiko kurodastory | March 09, 2009 at 06:13 PM
This is just one idea, and perhaps displays no more than my limited imagination. If there are better ideas out there, that amount to more than "implement something called "market socialism" and then - alacazam! - full employment!" then I'd love to hear them. http://www.watchgy.com/ mostly bank deposits, fell by £143.2bn in Q1. And of course there’s no guarantee such buying will continue.
http://www.watchgy.com/tag-heuer-c-24.html
http://www.watchgy.com/rolex-submariner-c-8.html
Posted by: cartier watches | December 27, 2009 at 05:24 PM