The Poverty of Affluence. Paul Wachtel

There are many millions in America who really are poor, and there are still more enormous numbers throughout the world for whom the considerations with which this book begins seem sadly irrelevant. Before I am finished, however, I hope to show how the changes in thinking I am hoping to foster can play a role in relieving the plight of those who go to bed hungry or who lack jobs, decent housing, or the luxury of being able to reflect on whether or not their deprivations are real.

      Even with regard to the middle class, it is not very useful to argue that their complaints are based on needs that are not “real.” The way we have set things up, people really do experience a need for the things they buy (or wish they could buy).

      Any argument that does not take this very real experience as a starting point is unlikely to find many followers. But the experience of economic needs in our culture is an artifact of how we have set things up—with little regard for the psychological consequences of our single-minded striving for material productivity. For all of the books on self-actualization and personal growth, all of the therapy sessions, all of the claims that we are a “psychological society,” we are really a society that is psychologically quite unsophisticated. We need a new set of values and guiding assumptions to live by—assumptions that will let us enjoy our affluence and will enable us to translate the achievements of our technology into a life that is experientially richer and more secure.

      My concern in this book is not primarily with the technical matters that concern economists. Rather, it is to raise some questions about the human reality that lies behind their imposing charts and figures. I want to have us look afresh at what money, goods, and jobs mean to us as individuals trying to make some order—and get some pleasure—out of our lives.

      In criticizing the misuse of economic thinking and its excessive dominance in the ordering of our lives, it is not my intention to criticize the profession of economics or the individuals who practice it. Indeed, it is often the economists who are most aware of the limits of applicability of an economic approach and who complain that economists are asked to provide—and then criticized for not providing—guidance of a sort that economics was never intended to provide (for example, indicators of general welfare instead of indices of material productivity).

      The aspects of our lives for which economic analysis is useful are limited but extremely important. It makes no small difference whether our resources are deployed in ways that permit us to achieve our goals or are frittered away in needless and frustrating inefficiencies. But however sophisticated its analyses, however cleverly it tries to include (and impute a dollar value to) such “externalities” as clean air, leisure, and life span, economics remains the science of “bread alone.” When it ceases to be employed as a tool in the service of larger ends, and becomes instead the guiding framework of our lives, economic thinking becomes destructive. This has, to a disturbing degree, become the case in contemporary America.

      Our discussions of critical ethical and social issues and our decisions about the priorities by which we will live tend today to be couched in terms of what we can “afford.” The “bottom line” has become our favorite metaphor for what really matters. Now, no one would deny that a clear understanding of the economic impact of any course of action is essential in order to make an informed and intelligent decision; a recognition that our resources are finite and that deploying them in one direction limits what is available for other things is a mark of wisdom. But often our use of economic justification for policies masks deeper and less readily acknowledged values, fears, and prejudices. We pretend to ourselves that we are simply dealing with matters of accounting and budgeting and we thereby can avoid—for the moment—facing the more difficult choices that are really at issue.

      But these deeper questions will not go away. By attempting to solve them by proxy, by pretending that they are limited to the arithmetic of dollars and cents, we fail to gain the clarity necessary for effective and satisfying resolutions. We can defer the sometimes painful process of examining whether our grounding assumptions are still valid, we can delay confronting our real beliefs about what is right and wrong—and whether we live up to those beliefs—but the price for this temporary comfort is a compounding of our difficulties as we try to make sensible choices while squinting at reality. In far too many instances we have limited our vision to economic considerations alone, and in so doing we have permitted what should be a subordinate aspect of our lives to intrude and dominate.

      I believe it is time for a fundamental reexamination of our assumptions about the relation between economic productivity and personal well-being. Much of what we produce we neither need nor really enjoy. In many instances, the adverse effects upon both the physical and the social environment have far outweighed the benefits of the goods produced. Indeed, it may not be too far-fetched to suggest that as we now pay farmers not to grow certain crops, we might derive a certain societal benefit by paying workers—at least over a transition period—not to produce certain goods we have been paying them to produce.

      Such a line of argument has the danger of being perceived by the reader as puritanical, masochistic, cranky, or downright foolish. The pleasures and advantages of our affluence seem so obvious that it appears to many that only a lunatic or a fanatic would question them. I hope I shall be able to make it clear that I am as capable—and desirous—of enjoying material pleasures as the next person and that I do appreciate what those pleasures are. All other things being equal, of course the more the better.

      But all other things are not equal. The toll taken on our lives and health by pollution, for example, is staggering—and growing every day as we try to make our material product grow. Moreover, as I will particularly stress in this book, our frantic pursuit of growth ends up working against the attainment of secure and lasting satisfaction. The siren call of growth has us enthralled. But like the sirens of antiquity, it calls us to a disastrous course.

      It is not the achievement of lives of pleasure and security I oppose; it is the illusion that the path to such a life must be lined with factories spewing smoke and billboards stirring envy and insatiable desire. A rich material life is in our grasp, and I hold no brief for poverty. But riches that do not yield satisfaction are worthless. By failing to understand our experience we make ourselves poorer than we need to be.

      PART I

      False Profits

      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