I believe what he meant by money making a person increasingly smug was perhaps that (Western) society holds the expectation that the amount of money a person controls is directly proportional to their overall success or fulfilment in life. This is not always the case but it does create the expectation that a person with money should represent themselves or think of themselves as more successful. This attitude is often interpreted (often correctly) as smugness given that it is rather the opposite of humbly acknowledging the fruits of work or fortune.

Happiness means many things to many people. For some, work itself brings them joy whether or not it results in earning a great deal of money e.g. charitable work. For others it is close relationship with their family, a situation that increased wealth often worsens. Many work their entire lives without recognition or compensation to pursue art, giving up comfortable or successful lives and careers in pursuit of something that, more often than not, they are the only ones who see value in. Religious or aesthetic devotions have perhaps the longest history of eschewing wealth and what most would consider a normal life.

As a society, I think that we are beginning to understand the faults in our current model of a successful life and so we've been seeing more of a trend towards simplifying our lives to make room for these other generators of happiness. We are starting to see that the freedom of money is not the same as the freedom from money.