Materialistic or Experiential?

People who pursue happiness through material possessions are liked less by their peers than people who pursue happiness through life experiences, according to a new study. The decade long study focused on the social costs and benefits of pursuing happiness through the acquisition of life experiences such as traveling and going to concerts versus the purchase of material possessions like fancy cars and jewelry. It found that material possessions don't provide as much enduring happiness as the pursuit of life experiences. The "take home" message in the study, which appears in this month's edition of the Personality and Social Psychology Bulletin, is that not only will investing in material possessions make us less happy than investing in life experiences, but that it often makes us less popular among our peers as well.

The mistake we can sometimes make is believing that pursuing material possessions will gain us status and admiration while also improving our social relationships. In fact, it seems to have exactly the opposite effect. This is really problematic because we know that having quality social relationships is one of the best predictors of happiness, health and well-being. So for many of us we should rethink these decisions that we might make in terms of pursuing material possessions versus life experiences. Trying to have a happier life by the acquisition of material possessions is probably not a very wise decision.

Past studies have found that people who are materialistic tend to have lower quality social relationships. They also have fewer and less satisfying friendships. In the recent study, five experiments were conducted with undergraduate students and through a national survey. They sought to find out if people had unfavorable stereotypes of materialistic people and to see if these stereotypes led them to like the materialistic people less than those who pursued life experiences. In one experiment undergraduates who didn't know each other were randomly paired up and assigned to discuss either a material possession or a life experience they had purchased and were happy with. After talking for 15 or 20 minutes they were then asked about their conversation partners by the researchers.

What researchers found was that people who had discussed their material possessions liked their conversation partner less than those who had discussed an experience they had purchased. They also were less interested in forming a friendship with them, so there's a real social cost to being associated with material possessions rather than life experiences. In another experiment using a national survey, the researchers told people about someone who had purchased a material item such as a new shirt or a life experience like a concert ticket. They then asked them a number of questions about that person. They found that simply learning that someone made a material purchase caused them to like him or her less than learning that someone made an experiential purchase.

We have pretty negative stereotypes of people who are materialistic. When researchers asked people to think of someone who is materialistic and describe their personality traits, selfish and self-centered come up pretty frequently. However, when we asked people to describe someone who is more experiential in nature, things like altruistic, friendly and outgoing come up much more frequently. So what do you do if you're somebody who really likes to buy lots of material possessions? The short answer is you should try to change. Not just this research, but a lot of other research has found that people who are materialistic incur many mental health costs and social costs - they're less happy and more prone to depression.

One thing we can do is choose to be around people who are less interested in material goods. It's not a quick fix, but it can be done. What makes it particularly challenging is that it requires some extra effort and mindfulness about the way we make decisions about how to be happy in life.

The Learning Revolution

Why don't we get the best out of people? Sir Ken Robinson argues that it's because we've been educated to become good workers, rather than creative thinkers. Students with restless minds and bodies - far from being cultivated for their energy and curiosity - are ignored or even stigmatized, with terrible consequences. "We are educating people out of their creativity," Robinson says. It's a message with deep resonance. A visionary cultural leader, Sir Ken led the British government's 1998 advisory committee on creative and cultural education, a massive inquiry into the significance of creativity in the educational system and the economy, and was knighted in 2003 for his achievements.

Poor Countries Teaching Rich Ones

At first glance, it is hard to imagine how innovations from poor countries could provide much help in solving the cost and quality problems plaguing health-care delivery in rich countries like the United States. While it is easy to understand why a poor man would want what a rich man has, why would a rich man benefit from a solution created originally for a poor man? India's Aravind Eye Care System demonstrates why rich countries should take such reverse innovation seriously.

                        

Aravind's operations include a chain of five eye hospitals, a manufacturing facility for producing intraocular lenses and other consumables needed for cataract and other eye surgeries, a training center for imparting training to other eye hospitals in India and other countries, and a network of outreach centers. Aravind hospitals conducted 269,577 eye surgeries in 2008-09, of which nearly 50% were performed for free for poor patients. The charges for the remaining 50% were at or below market rates i.e. there were no cross subsidies.

Of the facilities' 2.46 million outpatients during that time, 50% were treated for free, and the fee for most of the others was a nominal $0.50. Aravind takes no donations or charity and yet not only makes a profit but enough to fund a new hospital every three years! All these new hospitals and expansions have been internally funded. Aravind has been doing this for more than two decades. The $64,000 question is: How? The answer lies in the elements that make up Aravind:

1. Extraordinary productivity. Aravind doctors average about 25 cataract surgeries per day (actually, over six hours), whereas other eye-care hospitals do six to eight surgeries per doctor. Aravind achieves this by having a highly streamlined, innovative, and efficient system and a highly trained paramedical staff.

2. Exploiting economies of scale. This allows its in-house manufacturing facility, Aurolab, to produce intraocular lenses (IOLs) at $5; global prices are about $80. Aravind is the lowest-cost producer of IOLs in the world. Its scale of production enables, or rather, compels it to export almost 50% of its production to other eye-care hospitals, both in India and abroad.

3. Borrowing best practices from other sectors. Aravind has borrowed concepts like economies of scale and assembly lines from the industrial sector and applied them in health care to bring down costs without sacrificing quality. Volume is critical to this mode of operation. Aravind generates volume through its outreach programs and eye camps, which are even conducted in interior villages.

4. Investing in critical activities but saving on frills. Aravind lowers its cost position by reducing bells and whistles without compromising on the quality of its equipment or medicines or the competence of doctors and nurses.

5. Aravind's ideological foundations. Its founder, the late Dr. Govindappa Venkataswamy ("Dr. V"), stated his mission simply as "eradication of needless blindness" when he founded the hospital in 1976. This mission has continued to this day. All staffers — from doctors and nurses right down to attendants and sweepers — are imbued with this mission. Every patient, however poor he or she may be, must be treated with respect. Commitment is vital. Every action Aravind undertakes is tested against the criterion of whether it will help achieve this mission.

There is nothing in this model that cannot be replicated in any country — developing or developed. The keys are simple: pay close attention to operational efficiency, work on separating the core from the frills, maximize the productivity of the costliest resources (doctors and equipment), and utilize the sheer power of volume.

Aravind is a perfect example of how astonishing the results can be when produced through a congruence of vision, values, purposeful implementation and a high degree of efficiency. Its mission and vision statements are not pieces of paper on display; they come alive in each of the organization's activities.

Milking Africa

The Guardian newspaper reports that, more than £1 trillion may have flowed out of Africa illegally over the last four decades, most of it to western financial institutions. Even using conservative estimates, the continent lost about $1.8tn (£1.18tn) – meaning Africans living at the end of 2008 had each been deprived of an average of $989 (£649) since 1970, according to the US-based research body Global Financial Integrity (GFI).

The report says globally in recent years much attention has been focused on corruption – the proceeds of bribery and theft by government officials – and this only makes up about 3% of the cross-border flow of illicit money around the world. The proceeds of commercial tax evasion, mainly through trade mis-pricing, contribute 60% to 65% of the global total, while drug trafficking, racketeering and counterfeiting make up 30% to 35%. The report says Africa's percentages are likely to be roughly the same.

The scourge eats into Africa's total GDP, says the report, Illicit Financial Flows from Africa: Hidden Resource for Development. Losses rose from around 2% of GDP in 1970 to a peak of 11% in 1987, then dropped below 4% for much of the Nineties, only to increase again to 8% of GDP in 2007 and 7% in 2008. The GFI says that existing research shows that most flows to western financial institutions, and calls on G20 members to crack down on international banks and offshore financial centres.

Illicit outflows from Africa grew at an average 11.9% a year over the four decades. Some of this is attributed to oil price rises and increased transfer pricing practice. "It is not unreasonable to estimate total illicit outflows from the continent across the 39 years at some $1.8tn," writes Raymond Baker, director of the GFI.

"This massive flow of illicit money out of Africa is facilitated by a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mis-pricing and money laundering techniques."

This capital loss has a devastating effect on development and attempts to alleviate poverty, the report says. Even by a more conservative estimate, using accepted economic models from the World Bank and the IMF, Africa has lost $854bn in cumulative capital flight between 1970 and 2008 the report notes. This would be enough to not only wipe out its 2008 external debt of $250bn but potentially leave $600bn for poverty alleviation and economic growth.

Africa lost around $29bn a year between 1970 and 2008, of which the Sub-Saharan region accounted for $22bn. On average, fuel exporters including Nigeria lost capital at the rate of nearly $10bn a year. "The impact of this structure and the funds it shifts out of Africa is staggering. It drains hard currency reserves, heightens inflation, reduces tax collection, cancels investment, and undermines free trade. It has its greatest impact on those at the bottom of income scales in their countries, removing resources that could otherwise be used for poverty alleviation and economic growth."

It says that the huge outflow explains why aid efforts to reduce poverty have underachieved in Africa. According to recent studies by GFI and other researchers; "developing countries lose at least $10 through illegal flight capital for every $1 they receive in external assistance."