Motivation or Distraction?

This morning, author and behavioral economist (and inspiration for the title of my weblog) Dan Ariely wrote a short, but thought-provoking blog stating that the proliferation of small luxuries have incentivized people to work harder, which has created new markets for these items.

While I think there is indeed some truth to the first point (particularly if goals and planning are involved), I also think that these things have brought about the "keeping up with the Jonses" mentality. If we didn't all have to have the coolest new car, or the bigger house with all the cool gadgets, perhaps we Americans wouldn't be in the current economic crisis...caused in great part by frivolous lending so people could buy that big house they couldn't afford.

However, from an economic standpoint, I can't argue with the second point, that our need to acquire these items has definitely created markets where none existed before. The speed of innovation and technology, while mind boggling at times has helped to create jobs, find new ways to enhance productivity, and even assisted in making us feel better.

So if we are motivated by luxuries, that's perfectly fine, but realize that we don't always have to have the new car or the iPhone right now. In-fact sometimes the slightly used car and free subsidized Android-based phone are just as good...and you get to keep some of that money you worked so hard for.