What Makes People Happy?

There was an article in the Boston Globe Op-Ed section yesterday entitled, "More Money, More Problems," with the by-line, "An economic historian argues that affluence does not a happy society make." The author, Christopher Shea, was reviewing the work and latest book of British economic historian, Avner Offer, The Challenge of Affluence. Offer maintains that the wealthiest societies like Britain and the United States, have come to a point where their physical well being and their quality of life has actually been hurt by their wealth and that consumers don't make decisions that enhance long-term welfare, but are tempted to focus on short-term pleasure. Shea, summarizing Offer's argument writes, "Temptation...can take the form of everything from TV and video games luring high-school students away from their studies to the latest plasma TV''s persuading families to spend rather than save. (The American personal savings rate is now around zero.) And citizens of affluent societies, whether they're rich or poor, don't have the time either to develop new mores or public policies to deal with the new temptations." How do you make sense of this? What do you think the relationship of money to happiness is? What do you think are the basic ingredients to happiness?