How Much is Enough?: Money and the Good Life raises some of the same core issues I have been talking about over the last year on this blog, and it does so in a serious, intelligent and graceful way. Not surprisingly, given one of them the writer of a massive and much-praised three-volume biography of Keynes ( the elder Lord and Professor Skidelsky), the book is historically smart and well-informed. It also deeply engages in philosophy and ethics as well. It covers an immense amount of ground in a relatively short book, so much so it is diffcult to condense it in a blog post or two.
InsatiabilityTheir main point is a little different from my view, however. They stress above all the insatiability, the limitless wants of modern capitalism:
This book is an argument against insatiability, against that psychological disposition that prevents us, as individuals and as societies, from saying “enough is enough.”I'm not persuaded about this argument. Yes, capitalism generates plenty of wants, but the Skidelskys don't really consider the production side for the most part. Their argument is more about limitless demand than problems with supply. However, the main issues we face are more about supply and institutions and purposes. We converge very much on some of the basic philosophical starting points, but diverge somewhat on where to go next.
The problem for me is not so much that wants are unlimited, as the nature of needs and wants is changing in ways that have much deeper implications for the economy. It's not so much about the insatiability of wants as the kind of things we want.
The Skidelskys commendably note economics does not pay any attention to the nature of goods or needs, simply covering everything under "utility". But in the end the Skidelskys' response is a new list of "basic goods" which can be a metric for sufficiency. The list of basic goods is their measure of the good life.
I think we need more of a return to virtue ethics and encouraging human flourishing, rather than simply supplying basic goods. Their solutions are more or less classic social democratic, a moderate left approach to changes in taxation.
Instead, I think abundance means the nature of our needs is changing, towards more need for connection and "self-actualization" in Maslow's awkward term. Insatiability is not an option for future growth even if we wanted it to be, as so many of the new wants are not material - but psychological and available at zero marginal cost. That requires a deeper rethink of institutions, including the labor market and incentives.
One of the most important things for me is the issues inherent in the hierarchy of needs. The Skidelskys barely touch on this, beyond acknowledging most of their list of basic needs is "non-marketable". What does that imply for the market economy? They don't say.
Status and Positional Competition
Much of their worry is a shift to relative wants, to positional goods and status relative to others:
It used to be most spending was on essentials.The main sociological explanation of insatiability hinges, therefore, on the relative character of wants. At no level of material wealth will I feel satisfied with what I have, because someone will always have more than I do. Once competition for wealth—or the consumption by which it is normally signified—turns into competition for status, it becomes a zero-sum game, because everyone, by definition, cannot have high status.
Many more goods are "snob goods", which "cater to the desire to be different, exclusive, to stand apart from “the crowd,” or Veblen goods, desired because they are expensive and which effectively serve as advertisements of wealth. Many goods, like degrees from top universities, are socially scarce. (We've talked about Fred Hirsch's arguments about this here).
Today, that situation is reversed: the bulk of household expenditure, even by the poor, is on items that are not necessary in any strictly material sense, but which serve to confer status. The very notion of a “material good” has broadened to include anything that can be bought or sold, including ideas, scraps of melody, even identities.
This is all true, and keeping up with the Joneses is going to be a feature of any society. But insatiability is likely less of a problem than they think because status and positional competititon is increasingly plural. There are more greasy poles to climb than before, more subgroups and subcultures. If material goods are increasingly abundant, they are less of a distinguishing factor between people. That is already the case in clothing, for example. One hundred years ago a glance at the street could tell you who was working class and who was rich. Now they might both be wearing Gap. The ways we get status are increasingly plural.
The Good Life and NeutralityWhere I most agree with them, however, is their call for a substantive return to discussion of the good life. They do very much clarify how the abandonment of the older tradition of virtues in favor of utility has obscured any clear discussion of actual needs. Without any conception of purpose or the "good life", there is no standard or metric to even think about sufficiency.
They argue strenuously against the idea that the state and society should be neutral between different conceptions of the good life.
This book is not about the principles of justice, but about the constituents of the good life. Most modern political theory starts from the consideration of what is just, or fair, in the abstract, and proceeds to derive from this “just” social arrangements. Our approach is different. We start with the individual and his needs, from which we try to build up a picture of the common good. Questions of distribution, which lie at the center of modern discussions of justice, while vitally important, are only so to us in the context of the requirements of the good life.
They think this is is misplaced.
The last, and deepest, objection to our project concerns its supposedly illiberal character. A liberal state, John Rawls and others have taught us to believe, embodies no positive vision but only such principles as are necessary for people of different tastes and ideals to live together in harmony.
I think in fact it is a deeper problem with liberalism (in the broad sense, which includes most of our current politics), as I've argued. It strips people of purpose and leaves them to drift. It sees the main human problem as legalistic coexistence rather than flourishing, as we were discussing the other day in the context of virtue ethics. It was a humane intention, but leaves an empty shell where a positive vision ought to be.
It is a superficial conception of liberalism that sees it as implying neutrality between different visions of the good. In any case, neutrality is a fiction. A “neutral” state simply hands power to the guardians of capital to manipulate public taste in their own interests.
The discipline of EconomicsIf the Skidelskys think the problem with liberalism is superficial, they certainly believe there is a deep problem with contemporary economics, however.
They believe that is now clearly wrong:
Perhaps the chief intellectual barrier to realizing the good life for all is the discipline of economics, or rather the deathly orthodoxy that sails under that name in most universities across the world. Economics, says a recent text, studies “how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.”
Efficiency is no longer the primary problem.
We are condemned to dearth, not through want of resources, but by the extravagance of our appetites.
This is surely true. I've got much more to say, which reflects the detail and inherent interest of their arguments. I'll do that in a few subsequent posts.
Over time, such a shift is bound to affect our attitude to economics. To maximize the efficient use of our time will become less and less important; and therefore “scientific” economics, as it has developed since Robbins, will be demoted from its position as the queen of the social sciences. It can bring us to the threshold of plenty, but must then retire from its oversight of our lives.