The Poverty of Affluence. Paul Wachtel

of total value.^*

      Much of what we spend our money on doesn’t really get us ahead; it merely keeps us from falling behind. We move to the suburbs to try to escape the problems we have created in the cities, and—by the time the presumed benefits of economic growth have enabled large numbers to partake of this solution—the suburbs become transformed and take on many of the same problems. It is then time for those who can afford it to move on to a “better” suburb—until growth enables many to afford that solution too—and again to nullify it.

      We are, Hirsch suggested, subject to “the tyranny of small decisions.” Given the particular choices open to us, each of us chooses in a way that we think will maximize our welfare. Yet the interacting effects of all our individual choices result in a situation that most people do not want. Our highly individualistic way of thinking about both personal and social choices does not let us pose our alternatives in a more communal way, to consider whether a joint response might result in greater welfare than the individualistic scrambling we now engage in.

      Growth and the Poor

      It is frequently argued—by an odd consortium of representatives of the poor and of corporate power—that calls by middle-class intellectuals to limit growth are selfish or short-sighted. Only with a growing pie, it is said, can those who have traditionally had smaller portions have their lot bettered. When uttered by those who have worked so hard to assure that some people’s slice was larger than the rest, this touching concern for the poor is somewhat suspect. When put forth by representatives of the poor themselves, this concern for growth is still, I think, misguided.

      This view of growth is based on several questionable premises. The first concerns the matter of redistribution. Proponents of growth usually assume that redistribution of wealth is an unrealistic expectation. As a consequence, it appears to them that only if the total is larger can those at the bottom have more. It is interesting to note in this regard that social unrest does not seem to be quelled by growth. The 1960s were a time of high growth and great unrest—including calls not just for more but for a fairer share for those at the bottom. Simply dividing a larger pie did not yield contentment or social harmony.

      It is certainly true that redistribution presents formidable political problems. But there are also grave problems in trying to improve the lot of the poor through the strategy of growth. “A rising tide lifts all vessels,” said John F. Kennedy, and in certain ways this is true. On an international scale, for the poor of the Third World, many of whom are literally starving and others of whom have little more than a full belly to distinguish them from the first group, simply having “more”—in almost any sense—would indeed be a real gain. These people live at the margins of subsistence, and anything that can be done to better their material state is to be applauded. Since their numbers are so vast, it may well be that there is no way to achieve a measure of justice for them without—on a world scale—a good deal of economic growth.

      This does not mean, however, that further growth in the developed countries will contribute much to the well-being of the world’s poor. As things stand now, the developed nations use up or appropriate far more than their share of the earth’s resources. Growth in the developed nations would exacerbate, not relieve, that problem. Moreover, the striving after more that is the essence of a growth economy does not breed generosity. The percentage of our gross national product that now goes to foreign aid is minuscule. If we continue to believe that we do not have enough ourselves, we are unlikely to increase our contribution very much. It is not difficult to imagine that with a more steady state economy—and a concomitant psychology of contentment rather than increasing wants—the absolute amount of our contribution might be greater even though our gross national product, as typically measured, would be less.^*

      It must also be recognized that, for better or worse, we tend to be the model toward which the less developed nations strive. It is not easy to understand the problems and discontents of a consumer society from the vantage point of genuine deprivation. If we set a material standard that is increasingly hard to measure up to, we make the task of catching up that much more difficult.

      Realistically, affluence as we have tended to conceive of it is beyond the reach of most of the world. To imagine a billion Chinese using resources and polluting the air and water at the rate we do, and in addition 700 million Indians, 400 million Latin Americans, 500 million Africans, and numerous other peoples as well, is to recognize that our present notions of what constitutes the good life absolutely require that most of the world be poor. Only by changing the way we use resources and define our needs is there even a chance for all the world’s billions to prosper.

      If we shift our focus to domestic concerns, to the poor within the affluent societies, the inappropriateness of a “rising tide” solution is even greater. The misery of those at the bottom of our society is not due simply to a lack of goods. It has elements of real material deprivation, to be sure, but it is also social and psychological. It is the invidious quality in their lives that particularly constitutes their poverty; it is having less than everyone else in a society that continually redefines and upgrades what are regarded as necessities for a decent life, and that through advertising and the media continually trumpets that one ought to have this or that that one had hardly thought of before. Increasing the size of the pie, without changing the relative size of the slices, will do nothing to alter this invidious sense of oneself. No matter how much “more” those at the bottom get in this way, they will still have “less” than the rest of us. And being low man on the totem pole is painful no matter how high the pole.

      The misery of those in our ghettos is not all a matter of invidious comparison, of course. There are certainly some absolute features of ghetto life that require correction and that might be improved by a “rising tide.” Replacing crumbling, poorly heated homes infested with rats and roaches would be more possible in times of economic expansion and would contribute to well-being regardless of relative position. Certainly we should do all in our power to achieve this. Jobs too are more available in times of economic growth, and no one doubts that unemployment is one of the central causes of despair among the poor and minority population.

      But even here, simply increasing the size of the pie may not have much beneficial effect. First of all, it is not at all clear that ghetto housing would be much of a priority even if “the economy” was “growing.” We are far too prone to ask how much we are producing rather than what.

      The same goes for jobs, in a slightly different way. It is not enough simply to provide jobs. Jobs without dignity, jobs that do not permit a sense of self-respect or a feeling that one can live well by working hard are not a great benefit. Elliot Liebow, in Tally’s Corner, has provided a compelling account of the devastating social consequences of offering jobs at a level of pay that leaves people feeling they have no future even if they work full time.²⁵ In a society where many can work their way into a life of substantial comfort, giving work to a minority at marginal levels is a self-defeating exercise. Even if we lift the level of all, so that low-level jobs seem to pay more compared to current standards, if they remain substantially below what most people expect, and below a newly risen level of what seems standard, they will not make much of a dent in the despair.

      Richard Easterlin, in a widely cited report on the relation between economic growth and happiness, draws the following conclusions from the evidence available from studies in the United States and throughout the world:

      In all societies, more money for the individual typically means more individual happiness. However, raising the incomes of all does not increase the happiness of all. The happiness-income relation provides a classic example of the logical fallacy of composition—what is true for the individual is not true for society as a whole.

      The resolution of this paradox lies in the relative nature of welfare judgments. Individuals assess their material well-being, not in terms of the absolute amount of goods they have, but relative to a social norm of what goods they ought to have, [italics in original].²⁶

      There are more cars and television sets in the ghetto today than there once were in comfortable middle-class neighborhoods. Yet anger, misery, and despair are rampant. The pie has grown, but it hasn’t