The Poverty of Affluence. Paul Wachtel

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