The Poverty of Affluence. Paul Wachtel

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