How Much Is Enough? Money and the Good Life

1. Economic growth has failed to deliver the good life

"Despite the doubling of UK per capita income, we possess no more of the basic goods than we did in 1974; in certain respects, we possess less of them."

Keynes's prediction unfulfilled. In 1930, John Maynard Keynes predicted that by 2030, technological progress and compound interest would solve the "economic problem," allowing people to work just 15 hours a week. While his growth forecasts were largely accurate, his vision of reduced working hours has not materialized.

Reasons for failure:

• Power imbalances between capital and labor
• Insatiable human desires inflamed by advertising and social comparison
• Shift from manufacturing to services, with lower-paid service jobs
• Unequal distribution of productivity gains, favoring capital over labor

Consequences:

• Stagnant or declining real wages for many workers
• Longer working hours in some countries (e.g., US) compared to others (e.g., Netherlands)
• Increasing income inequality
• Persistence of the "economic problem" despite vastly increased wealth

2. Insatiability is rooted in human nature but inflamed by capitalism

"Capitalism has inflamed our innate tendency to insatiability by releasing it from the bounds of custom and religion within which it was formerly confined."

Human nature and insatiability. While the tendency towards insatiability is part of human nature, capitalism has exacerbated this trait by:

1. Carving out new markets through want manipulation
2. Broadening the scope of status competition
3. Promoting an ideology hostile to the idea of "enough"
4. Increasing monetization of the economy

Consequences of unchecked insatiability:

• Endless pursuit of wealth without purpose
• Environmental degradation
• Social fragmentation and loss of community
• Neglect of non-material aspects of well-being

Historical perspective: Pre-modern societies had cultural and religious constraints on acquisitiveness. Capitalism has largely removed these constraints, leading to a culture of perpetual want-creation and consumption.

3. The idea of the good life has disappeared from public discourse

"The eclipse of the good life explains the endless expansion of wants outlined in Chapter 1."

Loss of ethical language. Modern public discourse has largely abandoned discussions of the good life, focusing instead on:

1. Economic growth as the primary measure of progress
2. Individual choice and neutrality between competing conceptions of the good
3. Subjective well-being or happiness as the ultimate goal

Consequences:

• Lack of shared vision for societal progress
• Difficulty in justifying limits on consumption or work hours
• Erosion of common cultural and ethical standards

Historical contrast: Earlier societies had clearer ideas of the good life, often based on religious or philosophical traditions. These provided a framework for evaluating and limiting economic activity.

4. Happiness is not a reliable measure of well-being

"Generally speaking, happiness is good only where it is due; where sadness is due, it is better to be sad."

Limitations of happiness economics:

1. Measurement problems: Surveys are often insensitive to changes in well-being
2. Cultural biases: Expressions of happiness vary across cultures
3. Adaptation: People adapt to both positive and negative circumstances

Ethical problems:

• Treating happiness as the sole good ignores other important values
• Risk of promoting shallow or delusional happiness
• Neglect of the objects or sources of happiness

Alternative approach: Focus on objective indicators of well-being, such as health, education, and social relationships, rather than subjective happiness alone.

5. Environmental concerns alone do not justify abandoning growth

"The problems of global warming, serious as they are, do not on their own require us to abandon growth."

Limitations of environmental arguments:

1. Uncertainty in long-term climate predictions
2. Potential for technological solutions
3. Discounting of future welfare

Ethical basis for limiting growth:

• Harmony with nature as a basic good
• Critique of consumerism and waste
• Concern for quality of life over quantity of goods

Balanced approach: Address environmental concerns while recognizing the ethical imperative to improve living standards, especially in developing countries.

6. The basic goods: health, security, respect, personality, harmony with nature, friendship, and leisure

"The basic goods are essentially non-marketable: they cannot properly be bought or sold."

Criteria for basic goods:

1. Universal
2. Final (not means to other ends)
3. Sui generis (not part of other goods)
4. Indispensable

The seven basic goods:

1. Health: Physical and mental well-being
2. Security: Stability and predictability in life circumstances
3. Respect: Recognition of one's worth and dignity
4. Personality: Ability to form and execute a life plan
5. Harmony with nature: Connection to the natural world
6. Friendship: Deep, affectionate relationships
7. Leisure: Self-directed, non-instrumental activity

Importance: These goods provide a framework for evaluating social progress and individual well-being beyond economic measures.

7. Policy proposals to exit the rat race and promote the good life

"Our task, then, is twofold: to ensure that the fruits of productivity are shared more evenly; and to reduce the pressure to consume."

Key policy proposals:

1. Progressive reduction in working hours
2. Basic income or capital endowment for all citizens
3. Progressive consumption tax
4. Restrictions on advertising
5. Reform of education to prepare for leisure

Underlying principles:

• Non-coercive paternalism
• Emphasis on creating conditions for the good life
• Balance between individual freedom and social good

International implications:

• Retreat from further economic integration
• Focus on domestic production in developed countries
• Support for developing countries' protection of infant industries
• Reform of global capital flows

Last updated: October 17, 2024