Читать книгу The Poverty of Affluence - Paul Wachtel - Страница 11

TWO

The Illusions of Growth: Economic Abundance and Personal Dissatisfaction

IT IS VERY LIKELY THAT THE reader of this book feels more pressed economically than he or she did a decade or more ago. The sense of economic decline is widespread nowadays. Both left and right, while disagreeing on methods and priorities, seem to agree that we must “get the economy moving again.” Consequently, this book may seem at first to fly in the face of everyday experience when it argues that greater economic productivity is not what will relieve our distress and that the pursuit of economic growth may actually make things worse.

You will find, however, that the analysis that follows is very much rooted in everyday experience. It does not deny the feeling of deprivation and economic difficulty that today pervades our society. It questions the explanations for why we feel that way. The common answer is that declining productivity has pinched our pocketbooks, that inflation has eaten up our buying power, that we can’t catch up, much less get ahead. This common perception, however, is at odds with a number of facts about the actual performance of our economy.

Let us look at some figures which must be taken into account if we are to understand what is happening to us. They suggest that our distress is not due as much to objective economic conditions as we have been led to think. For the entire decade of the 1970s, for example—a decade marked by a major OPEC oil shock, a serious recession, the onset of “stagflation,” and discouragement of Americans about their economic situation—real per capita income rose 28%. This increase was about equally divided between the first and second half of the decade, and is almost identical to that of the 1960s, a decade looked back upon as one when the economy did work well.¹

A similar picture emerges from a comparison of the boom years 1966–1972 and the inflation-ridden years 1972–1978. Real per capita income—again after correcting for both taxes and inflation—rose 17% in the first period and 16% in the second.² 1979 did bring a slight decline, and a somewhat larger one followed in 1980. But when the period 1976–1980 is looked at as a whole—a particularly significant span since it was the period referred to by Ronald Reagan when he asked, to great rhetorical effect, the key question of the 1980 Presidential campaign: “Are you better off than you were four years ago?”—it turns out that people were better off in 1980 than in 1976, at least as measured by objective economic indicators. The Wall Street Journal reported that even after correcting for inflation and taxes, per capita income increased 6% during the Carter years. Moreover, according to the Journal, that figure substantially underestimates the increase in total economic benefits; in the same period social security benefits, unreported income, and other sources of economic support not considered in the Commerce Department figures on which the article was based rose at an appreciably higher rate. The Journal concluded that the widespread conviction that most people were worse off economically was contradicted by the facts.³

A number of other considerations make these figures—so at odds with our national mood and with the subjective experience of so many of us—even more striking. First of all, they do not include the “underground economy,” all that income and exchange that goes unreported and is not taxed. Estimates of the underground economy for 1980 range between $80 billion and $650 billion,⁴ and most experts believe it is growing, thus further raising questions about whether Americans actually have less now than they did. Moreover, all this has occurred despite an unusual age distribution in the population at present. Because of the “baby boom” of the 1950s, we have a considerably higher percentage of young people in the work force, who typically have less skills and earn lower income than those with more experience. Also, because of advances in medical care, we have a higher percentage of older, retired people in the population than in the past. These individuals do not earn income, but their numbers reduce the per capita income figures for the entire population. Thus, the comparisons of the rest of the population with their counterparts of 1960 or 1970 underestimate how well they are doing.^*

Other figures also suggest our problem is not as much a strictly economic one as we typically suppose. Many people are dismayed by the price of new cars, for example, yet if one considers, say, the cost of a full-size four-door American sedan, the average American family had to work about twenty-five weeks to earn enough to buy one in 1960, about eighteen and a half weeks in 1970, and only seventeen weeks in 1981.⁵ Or, to approach our material situation from another angle, figures released by the Department of Commerce for up to 1979 reveal an increase from 1970 to 1979 of approximately 37% in the proportion of homes with air conditioners, a 62% increase in the proportion with dishwashers, a 38% increase for clothes dryers, a 43% increase for home freezers, a 24% increase for clothes washers, and an increase of 111% in the proportion of homes with color television sets (from 42.5% of homes in 1970 to 89.8% in 1979).⁶

The above figures, moreover, present the more conservative of two possible comparisons. One must also recognize that the number of households increased substantially during this period. Thus, to yield an increasing proportion of homes so equipped, the supposedly sluggish economy had to provide an even more dramatic increase in the total number of such items. Furthermore, with a trend toward smaller households, these items were shared by fewer people in each house. If one looks at the absolute number of homes containing these items, there was a 70% increase in the number of homes with air conditioners, a 101% increase in the number with dishwashers, a 71% increase for clothes dryers, 78% for freezers, 54% for clothes washers, and an increase of 162% in the number of houses with color television sets.⁷

All these figures suggest that the widespread experience of economic distress, the sense of having difficulty making ends meet, is not due to our having a smaller stock of material goods or less buying power than in the “good old days” when the economy was supposedly working as it should; indeed, they indicate that we have more. As a psychologist, I certainly want to take the experience of decline seriously. But I will argue that we have largely misunderstood what that experience is due to.

The Exception: Unemployment

Before proceeding further, it is essential to acknowledge one very important way in which the performance of the economy really has been a source of distress in a fairly conventionally understood way. That is in the matter of unemployment. Unemployment rose in the early 1980s to its highest point in forty years, and its effects on millions of workers and their families have been devastating. Especially is this true for members of minority groups and—to a degree whose implications for the future of our cities are truly frightening—among minority youths. Programs of unemployment insurance and public assistance have placed some limit on the material deprivations that the unemployed now undergo, but that deprivation is nonetheless real and substantial for many, and demoralization and disruption of normal family life is experienced by still more. Further, the effects of unemployment have an impact not just on the unemployed and their families but on those who are still working but fear they will be the next to go. In this sense, there is no question that our economy is a serious problem.

But the sense of economic distress that pervades our land goes well beyond the confines of the unemployed or those soon to be. It is widespread among the solidly middle-class and even among many making quite substantial salaries, as numerous articles and interviews have attested.⁸ It is this more broadly experienced sense of decline and unease that elected Ronald Reagan as president in 1980 and that constitutes the puzzle to be addressed in what follows—the sense of deprivation amidst what once would have seemed like plenty.

Looking Back at “the Affluent Society”

It is possible to quibble about some of the figures I have cited. The choice of yardstick among, say, spendable income per capita, per household, or per wage earner will cause the picture to alter slightly. There are reasonable grounds for considering each as the appropriate criterion for judging our economic condition; depending on which one chooses, things look somewhat better or worse. For example, real income per family did not rise as much as real income per capita, but since families have grown smaller, an equivalent amount of money for a family now has to meet fewer people’s needs and is therefore more ample. We may also note that Census Bureau reports on real family income do not include such implicit economic benefits as Medicare and Medicaid, which yield benefits to many families, and those benefits increased substantially from 1970 to 1980.

Some families have maintained their economic position by the woman’s going to work for the first time. In some cases, this has led to an exaggerated estimate of economic well-being since there are often extra expenses associated with another family member’s working and since valuable services previously performed by the wife (but not considered in official income statistics) are not as readily available. Yet this phenomenon too influences the set of figures available in contradictory ways: The increase in working women may lead to an effective overestimation of real family income but may lead to an underestimation of wage levels. This is because many women have entered the labor force in part-time positions, and their presence in the work force lowers the average weekly wage reported.⁹

These various complexities and ambiguities not with standing, the figures I have cited make it clear that there are a number of key respects in which—contrary to what our national mood would suggest—we have made real gains in the last decade or so. There can be little doubt, for example, that the average family’s stock of major durable goods is substantially larger than it was a decade ago. And even the most pessimistic modes of analysis on real income do not reveal a precipitous decline.

But there is another comparison we can make that particularly demonstrates how misleading are interpretations of our apprehensive state simply in terms of economic decline. Whatever can be made of the ambiguities in examining the economic figures for the decade from 1970 to 1980, there can be no doubts whatever when comparing our present economic status to that prevailing in 1958.

The year 1958 is not chosen arbitrarily; I pick that year for comparison because it is the year that John Kenneth Galbraith’s highly influential book The Affluent Society was published. Though some of Galbraith’s policy recommendations were rather controversial, few questioned his characterization of the personal affluence of the American middle class; most agreed we were an extraordinarily rich society. Yet now we are feeling pinched at levels enormously above those of the “affluent society” period. The increase in possession of major consumer items is even more dramatic than in the comparison to 1970 cited earlier. The proportion of homes with air conditioners, for example, rose 484% (from 9.5% at the beginning of 1958 to 55.5% at the end of 1979). For some other representative items the figures were: freezers, 134%; clothes dryers, 356%; and dishwashers, a whopping 743%. If one looks at the absolute numbers of homes possessing these items, the figures are even more extraordinary: air conditioners, 838%; freezers, 278%; clothes dryers, 628%; and dishwashers 1268% (from 2.5 million homes to 34.2 million).¹⁰ Even correcting for the increase in population over that period, the increase is unambiguous.

Why, then, do so many Americans seem to feel less pleased with their economic situation than did their counterparts in 1958? Part of the answer, to be sure, is a fear that present levels cannot be maintained. Many feel that we are on the edge of a precipice, facing imminent decline unless something is done to turn things around. But that does not really provide an adequate explanation; upon sober reflection, few would conclude that there is any reasonable likelihood of our “decline” really taking us back to the levels of 1958—that is, to the level when we were characterized as “the affluent society.”^*

Inflation too contributes to the illusory sense of decline. Our real buying power has gone up, but not nearly as fast as our income in dollars. A salary of, say, $30,000 doesn’t buy what one grew up thinking $30,000 would buy, yet psychologically at such an income one expects to live at “a thirty-thousand-dollar level.” One forgets that the job one holds paid only $15,000 when one’s image of what $30,000 would be was being shaped, and that one’s buying power is greater than was the buying power of one’s equivalent back then. Instead, mesmerized by the numbers, we are struck by how little “thirty thousand” is.

The economist Lester Thurow makes a similar point in a somewhat different way. Referring to the period from 1972 to 1978, when the sense of economic decline began to be widely felt, he notes that

[w]hile real incomes were rising 16 percent, money incomes were rising 74 percent. Suppose a money man were to deliver $74 to your doorstep in the morning. You put on your bathrobe to go down to pick up the money along with the morning paper but find that when you get to your doorstep only $16 is there. Are you happy or mad? You are $16 better off than you were, but you have seen the $74 and can imagine what life would be like with it. You may even be able to convince yourself that your real standard of living has gone down.”¹¹

He adds that in some psychological sense people really may be worse off, a theme I will elaborate, though in a very different way.

Our decreasing sense of economic well-being is also due in part to changes in our living conditions that change the meaning of certain goods. For example, in 1958 to have two cars in a family was more likely to be a luxury than it is today. Now for many families two cars are close to a necessity and bring little sense of amplitude of living. More women work; more families live in suburbs, and particularly in the more sprawling suburbs of the South and West; the quality of mass transit has declined as we have placed our resources more and more at the disposal of the private automobile; suburban shopping centers have largely taken the place of urban commercial centers; and factories too have tended to move away from cities and into areas accessible only by car. All these factors now make two cars necessary for many in order to accomplish the tasks of shopping and getting to and from work with any degree of convenience. The reader will doubtless be able to think of similar arguments as to why many of the other things we now have in greater numbers do not mean to us what they once used to.

To some, this might seem to contradict the thrust of my argument, to offer an “objective” basis for the widespread feeling of not being able to make ends meet, of barely being able to address basic needs despite salaries whose numbers once would have seemed impressive. According to this line of thinking, we really do need more and our salvation does lie in expanding the economy and increasing productivity. I would contend, however, that the fact that we seem “really” to need more today is but one more reason why our emphasis on economic growth doesn’t work for us; the way the growth economy has been constructed, it creates more needs than it satisfies and leaves us feeling more deprived than when we had “less.”

The Growth Mentality

The creation of needs in a society organized for economic growth is not just a function of material conditions such as suburban sprawl and deteriorating mass transit. These are important, to be sure, but from another perspective they can be seen as the physical manifestations of a psychological state—an almost inevitable consequence of a set of values, assumptions, and habits of mind that characterize citizens of a growth-oriented society. Neither the material conditions nor the psychological state really are more basic; they continually co-determine each other, and both must be understood and addressed if we are to master our present state of crisis. I shall concentrate more on the psychological aspects, as befits my own professional background, but it is important to keep in mind that the psychology I shall rely on here is one that does not falsely and sharply dichotomize between the inner world of experience and the outer world of social and economic reality.

In another influential book that reflects the sense of affluence experienced in the late 1950s, David Potter’s People of Plenty, American national character is depicted as shaped particularly by economic abundance. That book discusses a conclusion of Margaret Mead’s to the effect that Americans judge their worth not by where they are but by how far they have come from where they started.¹² This propensity may perhaps characterize Americans in particular because of the specific historical circumstances in which American society evolved, but it is also largely accurate for all people living in societies organized around economic growth.

It is ironic that the very kind of thinking which produces all our riches also renders them unable to satisfy us. Our restless desire for more and more has been a major dynamic for economic growth, but it has made the achievement of that growth largely a hollow victory. Our sense of contentment and satisfaction is not a simple result of any absolute level of what we acquire or achieve. It depends upon our frame of reference, on how what we attain compares to what we expected. If we get farther than we expected we tend to feel good. If we expected to go farther than we have then even a rather high level of success can be experienced as disappointing. In America, we keep upping the ante. Our expectations keep accommodating to what we have attained. “Enough” is always just over the horizon, and like the horizon it recedes as we approach it.

We do not tend to think in terms of a particular set of conditions and amenities that we regard as sufficient and appropriate for a good life. Our calculations tend to be relative. It is not what we have that determines whether we think we are doing well; it is whether we have more—more than our parents, more than we had ten years ago, perhaps more than our neighbors. This latter source of relativity, keeping up with (or ahead of) the Joneses, is the most frequently commented upon. But it is probably less important, and less destructive, than our comparisons with our own previous levels and with the new expectations they generate. Wanting more remains a constant, regardless of what we have.

Our entire economic system is based on human desire’s being inexhaustible, on there being a potential market for almost anything we can produce. Without always recognizing what we are doing or how we do it, we have established a pattern in which we continually create discontent, and we attribute the restless yearning to the spontaneous expression of human nature. This is not just something perpetrated by people in the advertising industry, though they are hardly innocent in it. And it is not the simple result of a deliberate conspiracy by the corporations, though they do indeed attempt to manipulate us to their advantage. Rather, it reflects a mentality we all share, something we all participate in. We are all afraid of stopping the merry-go-round, whether we view things from the perspective of businessman, worker, union leader, bureaucrat, parent, or consumer. I do think that advertising stirs desires that might otherwise not be there, and often to our detriment. But it does not write its message on a blank slate. We are all primed to receive its messages, and our priming, our state of mind, plays a critical role.

Growth, progress, the idea of “more” is so much a part of our consciousness that it takes very little to persuade us that any particular item is something we want or need. Ads influence what particular things we will desire (and in their very ubiquitousness they contribute to the growth state of mind as well), but it is our state of mind, linked as both cause and effect to so many interlocking features of our way of life, that it is particularly crucial to understand.

Let us consider a revealing article that recently appeared in the Columbia alumni magazine.¹³ The writer describes a dinner party attended by a number of recent graduates in which the conversation (as it always seems to these days) “turned to the state of the economy and our personal finances.” It was not the sort of group one would expect to feel hard-pressed: “Graduates of the nation’s top business and law schools and alumni of Ivy League universities, many of us are earning starting salaries our parents regard with amazement or envy,” the author tells us. Yet the outlook of this elite group was “unrelievedly bleak.”

The problem, it seems clear from the article, is that they are victims of the growth mentality. They are already, she acknowledges, enjoying a standard of living in their twenties and thirties that their parents did not attain until their forties or fifties. But they are dissatisfied because “our present material worth is irrelevant if we can’t expect our future gains to surpass it.” That is as eloquently stated a formula for personal and environmental disaster as one is likely to find. And unfortunately, the author is probably right when she says that is the cornerstone of what her generation was taught by teachers and parents.

Not all who are complaining about their economic circumstances are as privileged as these dissatisfied Ivy League graduates. Their situations highlight with unusual clarity how little the sense of economic distress and disappointment currently sweeping America has to do with real deprivation and how much with assumptions and expectations. In other cases the ambiguity is greater, and it is easier to lend credence to the illusion that the problem is primarily an economic one.

Many other members of their generation, for example—not as elite as those just described but part of that great majority of Americans who define themselves as middle class—are experiencing difficulty in buying a house. Inflation, it seems, is making impossible the “great American dream” of a house in the suburbs for every couple.

The problem, to be sure, is not just a matter of expectations. A number of factors, all coming together at once, have combined to hit the housing market with special severity. Certainly inflation and interest rates must be considered, as well as other traditional economic categories and particular economic policies that have prevented adequate construction and maintenance of housing. We must recognize as well that housing costs in the past did not honestly reflect the environmental impact of the expansion of our population in numbers and into new territories. Costs of providing for proper sewage, for access to water, and other such necessities have contributed substantially to the increased cost of housing; present home buyers are paying the environmental debts of their predecessors.¹⁴ Pressure on the housing market is also enormously increased by the huge influx of new home-seekers as the “baby boom” generation enters adulthood and by the simultaneous tendency toward smaller households. More young people are living alone, as are more of the elderly, thus increasing still further the number of units needed to satisfy the demand. In the long run, the decline in the American birthrate, if it is maintained, may go farther toward solving the housing crisis than any economic policies.

But for those caught in it in the present, it is essential to understand how, again, assumptions and expectations are as much a cause of distress as any “objective” considerations. Let us return for a moment to the words of our privileged Ivy League graduate, for here her experience is, even on its face, not very different from that of many of her generation. “When my parents were married,” she says, “they did what their parents had done: watched expenses, did without conveniences, and saved for the down payment on a house.” That indeed was the typical pattern until quite recently. People didn’t expect to move into their own suburban dream house right away. And they didn’t feel that things were going all to hell if they couldn’t.

A recent article in The New York Times Magazine confirms that the change in expectations is not confined to the Ivy League.¹⁵ Reporting on conversations with couples seeking housing and with real estate agents from Queens to Des Moines, the article describes how couples “find it difficult to save because their tastes and style of living were formed during their relatively affluent adolescences” and how they, like their Ivy League brethren, are unwilling to start out in the kind of neighborhood their parents did. By an odd and ultimately self-lacerating logic, this makes them feel poorer than their parents.

The Logic and Illogic of Growth

So immersed are we in the assumptions of growth, so inured to what we actually have and preoccupied only with whether it is more than we had before, that our ability to make certain basic logical distinctions has declined; for many of us not having more has become equivalent to having less. This is part of what accounts for the paradox noted earlier—that at an enormously higher material level than in the late 1950s, we no longer feel like an “affluent society” or a “people of plenty.” We have much more, but our rate of increase has declined.

The sociologist Paul Blumberg, in an influential analysis of the social consequences of our present economic situation, notes that

for Americans, as well as for theorists of the American class structure, what has always been crucial is not merely the absolute level of living, but the progress from year to year, decade to decade, generation to generation…. [I]t is this expectation of continuous improvement that recent developments now threaten.¹⁶

There is much that is useful in Blumberg’s analysis, yet like many who have tried to come to terms with what is happening he also contributes in certain ways to the very problem he is analyzing. His depiction of an “age of decline” when discussing a lack of increase in income is consonant with his references—hardly unique to him—to the “stagnation” of living standards or to workers whose living standards “barely are holding their own.”¹⁷ Were one not so mired in the language and perceptions of a growth ideology, one might as accurately portray living standards as “stabilized” or as “maintained at a level higher than those of the affluent 1950s and 1960s.” The confusion so many of us seem to experience between our level of affluence and whether it is increasing still further is captured beautifully in his term “the falling rate of affluence,” which again refers not to a decrease in living standards but to a decline in the rate at which they continue to increase still further.

Blumberg’s fall into the habits of growth-think is only partly unwitting. In much of his book he seems quite aware of what he is doing, and it can be justified as an accurate phenomenological account of how workers experience the vicissitudes of the economy. Moreover, he is correct that these are real expectations whose social consequences can be ugly if they are not met. Other analysts seem to slide into describing a lack of increase as a decrease even when unambiguously speaking in their own voice; and when they are economists—and indeed economists more sensitive than most to what is happening to us—that is especially significant. Thus John O. Wilson, whose book After Affluence is subtitled Economics to Meet Human Needs, refers to an “end to affluence” by which he means, as indicated in the next sentence, “no increase in our consumption of nonessential goods and services” (italics added). Similarly, he says American workers’ productivity had taken a “nosedive,” yet later in the same paragraph it becomes clear that what he means by this and by a “drop in productivity” is that there was only a one-percent growth in productivity, whereas in other years growth rates were higher.¹⁸

I do not mean to suggest that Wilson did not understand the distinction, but rather to point out how pervasive and revealing are the almost tic-like language habits that creep into our speech undetected and constitute a kind of growthspeak or growth-think. If economists cannot keep these distinctions clear, even when carefully presenting arguments for publication, it is hardly surprising that the rest of us are unclear about these matters in our daily lives.

Affluence and Adaptation Level

One useful tool for understanding our confusions and the apparent lack of fit between our level of affluence and our experience of well-being is a psychological theory originally developed for studying processes of perception. The theory, called adaptation-level theory, was developed by Harry Helson.¹⁹ It has found increasingly wider fields of application and is now used to address a broad range of problems in social psychology and the psychology of personality as well as in its original domains of application. Central to adaptation-level theory in all its applications is the recognition that our perception of events depends not just on their “objective” nature but on the expectations and assumptions that we bring to bear. In particular, our experience with previous events of a similar nature influences our perception. We tend to experience events in relation to what we are used to. Our perceptions are inherently comparative.

Thus, in a typical adaptation-level experiment, if a person is given a weight to pick up and asked to judge how heavy it is, he will judge it as heavier if he has previously picked up weights lighter than it. Similarly, in studies of the effectiveness of various rewards, it is found that the same reward may lead to greater or lesser effort depending on the reward that the person expects and on what he has been used to receiving in similar situations. Previous experiences and expectations produce an internal standard or norm, which psychologists call the adaptation level. New experiences are rewarding or disappointing not in terms of any absolute standard but in relation to this internal norm.

In judging how well off we are economically, similar processes seem to be involved. We assimilate new input to our “adaptation level.” For many Americans, having one or several color television sets, two or more cars, a home in which there are more rooms than people—few Americans realize what an extraordinary luxury that is to most people in the world, even in the industrialized world—these and other features of their lives are experienced as the “neutral point.” They do not excite us or arouse much feeling. Only a departure from that level is really noticed. Some pleasure may be afforded by our background level of material comfort, but unless we look elsewhere than the accumulation of goods for the main sources of pleasure and excitement in our lives, we are bound to be on a treadmill—one which, we are increasingly recognizing, can damage our health and shorten our lives.

The way off this treadmill, I will argue, lies in focusing more of our aspirations on experiences less subject to the adaptation-level effect. Attention to human relationships and cultivation of the senses and of aesthetic experience can point us toward domains where “more and less” thinking—while not completely absent—is not so dominant and where variety and novelty prevent the dulling of experience to a much greater extent. These dimensions of human aspiration have, of course, always been an important part of American experience, and there is evidence that they are in fact on the rise.²⁰ Nonetheless, when the director of the South Street Seaport Museum in New York was asked recently why he permitted the museum to become involved in a large-scale commercial development scheme he answered, with considerable accuracy I believe, “The fact is that shopping is the chief cultural activity in the United States.”²¹

Social Limits to Growth

In addition to the psychological factors that limit the satisfaction which economic growth can bring, the late British economist Fred Hirsch discussed a number of more objective considerations as well.²² Hirsch pointed out a major fallacy in the argument that economic growth can obviate the necessity of a redistribution of economic goods by providing a continually larger pie: In a society such as ours, in which for a substantial majority basic material needs are rather fully met,^* the additional things that economic growth provides are inherently scarce; that is, their enjoyment depends on others not having the same thing. This is more than just a matter of status-seeking or conspicuous consumption. Hirsch was at pains to demonstrate that there is as well an “objective, nonpsychological” basis for the limited capacity of economic growth to make us happy.

Hirsch’s argument rests on a distinction between what he called the “material” and the “positional” economy. Goods of the first sort can increase with productivity and be of value to a wider and wider range of individuals. We needn’t take telephones away from the rich; we can make them available to everyone. But with increasing affluence, more and more of what we strive for is of the second sort, either because of physical scarcity or because of the social nature of what is sought. The automobile is to some extent a positional good. Autos bring more pleasure to the few who drive them when they are a luxury than to the vast numbers who clog the roads when “growth” has made them accessible to all. Wider availability makes possession of an auto lose some of its value for everyone; even Rollses and Mercedes get stuck in traffic jams. Ownership of a beachfront home is even more clearly positional. The number of miles of ocean front set absolute limits to the number who can own such property. Building high-rises along the beach clearly changes the nature of what one can have. If a less urban, more serene or “natural” setting is desired, then redistribution-taking exclusive ownership away from those who now possess such houses—is the only alternative. Beyond a certain point, the pie can’t get larger.

Increase in “productivity”—the standard answer to Malthusian and neo-Malthusian warnings about limits—is relevant, even if feasible, only for the material economy and for increasing production. But in the realm of consumption, Hirsch suggested, limits are “more” absolute than for production:

An acre of land used for the satiation of hunger can, in principle, be expanded two-, ten-, or a thousand-fold by technological advances.… By contrast, an acre of land used as a pleasure garden for the enjoyment of a single family can never rise above its initial productivity in that use. The family may be induced or forced to take its pleasures in another way—substitution in consumption—but to get an acre of private seclusion, an acre will always be needed.²³

“Growth” solutions to the desire of all for more are limited by other constraints that are more clearly social, rather than physical, in nature. Take, for example, the role of education in providing access to better jobs. When relatively few have high school educations, attainment of one provides many opportunities. When we have managed to provide a high school education to almost everyone, the “value” of such an education in this respect goes down precisely because everyone now has one. By making it available to all we have made it of value to none.

Now, of course the value of an education resides in more than just the leg up it provides in competing for a job, and in this (extremely important) sense, the economic growth that has enabled us to afford to provide everyone with more education has indeed provided greater benefits for all. Hirsch weakened his argument by seeming at times to ignore this aspect of such “goods” as education. (Clearly he recognized the value of education, and the apparent imbalance in his argument is partly a function of his trying to argue strictly as an economist and partly of his having his tongue at least lightly touching his cheek—and perhaps of his recognition that the two may not always be entirely different.) But—especially as the “standard” credentials for competing for a good job have increasingly become not just a high school but a college diploma as well—it must be acknowledged as a sad truth that for many people education is more of a cost than a benefit. And for this rather substantial group, the effect of making education more widely available by a process of growth has been to increase the effort required to get ahead, to place greater rather than less obstacles in the path of economic advancement.

Each individual’s decision to get more education is still a rational one: He must do so to keep up with all the others who are doing so. But the total social costs (viewing education here as a cost rather than a benefit) have increased for all. Everyone must exert more effort to get to the same place. Because education (as preparation for a job, rather than as a valued end in its own right) is a “positional” good, the increased benefits of “growth” here are illusory.

Hirsch likened the effects of many of our seeming gains to those of standing on tiptoe to obtain a better view in a crowd. It works for any given individual considered separately (either giving him an advantage if he is the first, or at least helping him to equalize things if others have already done so). Clearly, his individual failure to act in this way would leave him with less benefits, and it would be irrational for him to choose not to stand on tiptoes. But, as Hirsch pointed out, if one calculates the aggregate benefit of all these individual acts, “the sum of benefits of all the actions taken together is nonetheless zero.”²⁴ By assuming that what people are willing to spend to obtain something is a measure of its “value” to them, economists assign a value to the aggregate of all products and services by adding up these individual values. As Hirsch suggested, this sum produces quite flawed estimates of total value.^*

Much of what we spend our money on doesn’t really get us ahead; it merely keeps us from falling behind. We move to the suburbs to try to escape the problems we have created in the cities, and—by the time the presumed benefits of economic growth have enabled large numbers to partake of this solution—the suburbs become transformed and take on many of the same problems. It is then time for those who can afford it to move on to a “better” suburb—until growth enables many to afford that solution too—and again to nullify it.

We are, Hirsch suggested, subject to “the tyranny of small decisions.” Given the particular choices open to us, each of us chooses in a way that we think will maximize our welfare. Yet the interacting effects of all our individual choices result in a situation that most people do not want. Our highly individualistic way of thinking about both personal and social choices does not let us pose our alternatives in a more communal way, to consider whether a joint response might result in greater welfare than the individualistic scrambling we now engage in.

Growth and the Poor

It is frequently argued—by an odd consortium of representatives of the poor and of corporate power—that calls by middle-class intellectuals to limit growth are selfish or short-sighted. Only with a growing pie, it is said, can those who have traditionally had smaller portions have their lot bettered. When uttered by those who have worked so hard to assure that some people’s slice was larger than the rest, this touching concern for the poor is somewhat suspect. When put forth by representatives of the poor themselves, this concern for growth is still, I think, misguided.

This view of growth is based on several questionable premises. The first concerns the matter of redistribution. Proponents of growth usually assume that redistribution of wealth is an unrealistic expectation. As a consequence, it appears to them that only if the total is larger can those at the bottom have more. It is interesting to note in this regard that social unrest does not seem to be quelled by growth. The 1960s were a time of high growth and great unrest—including calls not just for more but for a fairer share for those at the bottom. Simply dividing a larger pie did not yield contentment or social harmony.

It is certainly true that redistribution presents formidable political problems. But there are also grave problems in trying to improve the lot of the poor through the strategy of growth. “A rising tide lifts all vessels,” said John F. Kennedy, and in certain ways this is true. On an international scale, for the poor of the Third World, many of whom are literally starving and others of whom have little more than a full belly to distinguish them from the first group, simply having “more”—in almost any sense—would indeed be a real gain. These people live at the margins of subsistence, and anything that can be done to better their material state is to be applauded. Since their numbers are so vast, it may well be that there is no way to achieve a measure of justice for them without—on a world scale—a good deal of economic growth.

This does not mean, however, that further growth in the developed countries will contribute much to the well-being of the world’s poor. As things stand now, the developed nations use up or appropriate far more than their share of the earth’s resources. Growth in the developed nations would exacerbate, not relieve, that problem. Moreover, the striving after more that is the essence of a growth economy does not breed generosity. The percentage of our gross national product that now goes to foreign aid is minuscule. If we continue to believe that we do not have enough ourselves, we are unlikely to increase our contribution very much. It is not difficult to imagine that with a more steady state economy—and a concomitant psychology of contentment rather than increasing wants—the absolute amount of our contribution might be greater even though our gross national product, as typically measured, would be less.^*

It must also be recognized that, for better or worse, we tend to be the model toward which the less developed nations strive. It is not easy to understand the problems and discontents of a consumer society from the vantage point of genuine deprivation. If we set a material standard that is increasingly hard to measure up to, we make the task of catching up that much more difficult.

Realistically, affluence as we have tended to conceive of it is beyond the reach of most of the world. To imagine a billion Chinese using resources and polluting the air and water at the rate we do, and in addition 700 million Indians, 400 million Latin Americans, 500 million Africans, and numerous other peoples as well, is to recognize that our present notions of what constitutes the good life absolutely require that most of the world be poor. Only by changing the way we use resources and define our needs is there even a chance for all the world’s billions to prosper.

If we shift our focus to domestic concerns, to the poor within the affluent societies, the inappropriateness of a “rising tide” solution is even greater. The misery of those at the bottom of our society is not due simply to a lack of goods. It has elements of real material deprivation, to be sure, but it is also social and psychological. It is the invidious quality in their lives that particularly constitutes their poverty; it is having less than everyone else in a society that continually redefines and upgrades what are regarded as necessities for a decent life, and that through advertising and the media continually trumpets that one ought to have this or that that one had hardly thought of before. Increasing the size of the pie, without changing the relative size of the slices, will do nothing to alter this invidious sense of oneself. No matter how much “more” those at the bottom get in this way, they will still have “less” than the rest of us. And being low man on the totem pole is painful no matter how high the pole.

The misery of those in our ghettos is not all a matter of invidious comparison, of course. There are certainly some absolute features of ghetto life that require correction and that might be improved by a “rising tide.” Replacing crumbling, poorly heated homes infested with rats and roaches would be more possible in times of economic expansion and would contribute to well-being regardless of relative position. Certainly we should do all in our power to achieve this. Jobs too are more available in times of economic growth, and no one doubts that unemployment is one of the central causes of despair among the poor and minority population.

But even here, simply increasing the size of the pie may not have much beneficial effect. First of all, it is not at all clear that ghetto housing would be much of a priority even if “the economy” was “growing.” We are far too prone to ask how much we are producing rather than what.

The same goes for jobs, in a slightly different way. It is not enough simply to provide jobs. Jobs without dignity, jobs that do not permit a sense of self-respect or a feeling that one can live well by working hard are not a great benefit. Elliot Liebow, in Tally’s Corner, has provided a compelling account of the devastating social consequences of offering jobs at a level of pay that leaves people feeling they have no future even if they work full time.²⁵ In a society where many can work their way into a life of substantial comfort, giving work to a minority at marginal levels is a self-defeating exercise. Even if we lift the level of all, so that low-level jobs seem to pay more compared to current standards, if they remain substantially below what most people expect, and below a newly risen level of what seems standard, they will not make much of a dent in the despair.

Richard Easterlin, in a widely cited report on the relation between economic growth and happiness, draws the following conclusions from the evidence available from studies in the United States and throughout the world:

In all societies, more money for the individual typically means more individual happiness. However, raising the incomes of all does not increase the happiness of all. The happiness-income relation provides a classic example of the logical fallacy of composition—what is true for the individual is not true for society as a whole.

The resolution of this paradox lies in the relative nature of welfare judgments. Individuals assess their material well-being, not in terms of the absolute amount of goods they have, but relative to a social norm of what goods they ought to have, [italics in original].²⁶

There are more cars and television sets in the ghetto today than there once were in comfortable middle-class neighborhoods. Yet anger, misery, and despair are rampant. The pie has grown, but it hasn’t really helped much. So long as those at the bottom are accorded markedly less than the rest of us—both in respect and in their share of the goods we are all taught to clamor for—they will feel poor. Growth is no substitute for greater equality. It may be tempting to think that growth can provide an easy way out of facing questions about the justice of present arrangements, but such questions will not go away. Growth proponents pose as hard-headed realists. But their vision of buying off the poor with the crumbs from their table is in fact a dangerously naive fantasy, no matter how sugar-coated the crumbs or grand the table.

* The number of older people (and probably, therefore, the number of retired) is likely to continue to increase for a while. But when the “baby boom” generation enters its economic prime, the percentage of younger, less skilled workers in the work force should decrease substantially.

* I am not considering here the possibility of a nuclear war, which would of course plunge us far indeed below 1958 levels of comfort, and which is made more likely by the very habits of mind I am criticizing in this book.

* It is a shameful fact that for a minority of our population this is not the case—though even here the difference between American “poverty” and Third World “subsistence” is important to understand if one is to be helpful (see below)

* I will have more to say later about the limitations of such measures as gross national product and how they lead us astray.

* Some argue that we help developing nations most effectively, and least paternalistically, not by giving aid but simply by trading with them—that it is the essence of trade that it benefits both parties to it. Chapter Twelve will examine more closely the difficulties with such thinking.