Why Are We Miserable? The Hidden Impact of Perception and Inequality

Notwithstanding illusions of a better past, by every measure associated with well-being—education, health, literacy, sanitation, wealth, lower unemployment—generally speaking, America is better off today than ever before. Yet, we rank 23rd in the Happiness Index, falling out of the top 20 for the first time. How can that be? Despite the six o’clock news and that fear-jerking story making the rounds on social media, even violent crime is down dramatically. Highly publicized and disturbing events like the spike in homicides during 2020 and the Capitol insurrection on January 6, 2021, capture eyeballs but give a misleading impression of overall crime trends. The truth is that crime has decreased over time, with 2023 seeing a notable drop in violent crime, reflecting advancements in human intelligence and conflict resolution and a shift toward reasoned discussion over fisticuffs. Americans are also wealthier than ever, although many report feeling the opposite.

So, why does everyone think things are so bad?

Humans are drawn to disaster, unable to look away from a car crash or a train wreck. Artificial intelligence expert Ray Kurzweil’s research suggests that escalating danger, fear and conflict are powerful attention magnets. This might explain the enduring popularity of crime dramas, horror films and shoot-em-up video games. Although we are collectively better off than ever before in history, the news and social media can make things feel dire. The reality is that we’ve often been manipulated. This is nothing new; throughout history, aspiring leaders have used grievance-driven messaging to serve their selfish interests. They highlight problems, stir up anger, scapegoat vulnerable targets (such as immigrants, people of color and women), amplify their message through sensationalism and promise a quick fix. Our brains are predisposed to respond to these tactics, making us susceptible to this age-old strategy.

Amplifying grievances and directing blame can create a following where loyalty overshadows the importance of truth. The danger is that once a leader gains power through such loyalty, the truth eventually surfaces, often leading to social instability. As the prolific author, management guru and political historian Peter Drucker observed in his early writings on dictators, their rise often leads to economic decline, distrust in institutions, an unjust court system and a society bound by the dictator’s unpredictable whims and fancies. This is why many who understand history hope that America remains committed to democracy, steering clear of the pitfalls of populist authoritarianism.

Modern-day despots manipulate perceptions and direct attention to convenient scapegoats because they see fair opportunities for people of color and women as a threat to their power. One notable example is the recent college admissions scandals, where certain power-elite universities allowed minority students to be unfairly blamed for “taking” admissions slots from white students. Meanwhile, these universities concealed the fact that many of the admitted students from minority backgrounds were more deserving, based on traditional metrics, than some white students admitted under legacy privilege. Legacy admissions, which benefit students from privileged backgrounds, took up a significant number of slots affecting all applicants, including Asian students who challenged Harvard University’s practices in 2014. Similarly, debates over affirmative action and DEI initiatives show that white women often benefit more than other marginalized groups, such as Black people, women of color and military veterans, without facing the same level of criticism. 

The path forward is clear but not easy: fair opportunities for all  

A fair opportunity for all does not imply equality of outcome, which is impossible in a capitalist system. Instead, fair opportunity is crucial for national security and prosperity because it fosters hope, social stability, trust in institutions and meaningful human engagement. Engagement, in turn, drives entrepreneurship, innovation and productivity. For example, disengaged employees cost the United States $605 billion annually in lost productivity, while highly engaged teams see 21 percent higher profitability. Enhancing engagement can involve providing fair opportunities for a 40-hour workweek or increasing fair access to capital for entrepreneurs to start and grow their businesses.

Leading firms like KKR and Blackstone are re-writing their old-school LBO playbooks to increase profitability through broad-based ownership. Typically, the wealth created through private equity transactions is concentrated in the hands of investment firms, their investors and a very small group of senior executives. Broad-based ownership spreads the wealth opportunity to all employees, which sets off a virtuous cycle: employees feel like partners, and their behavior reflects that. They become more engaged and motivated. That results in greater productivity and innovation, which leads to higher profitability. Fairness pays. In my view, KKR and Blackstone (BX)’s approach is fair to both employees and shareholders, aligning with the core principles of DEI—even if they don’t explicitly label it as such.   

The playbook for American prosperity and security is clear: we will all win when we drop tribalism, power elitism and untruthful populism and start acting collectively for the common good. All it takes is the fairness of opportunity for all.