The Poverty of Affluence. Paul Wachtel

an implicit societal decision in this regard even if most of the manufacturing and buying is done privately—the more pollution we are almost certain to permit in the manufacture of each.

      But again, these are the tradeoffs we claim to be making rationally and boldly in the pursuit of pleasure. Whereas for automobiles alternatives can readily be imagined that are potentially more pleasant for many purposes,^* it is harder to make a similar case, based on clear experiential negatives, for stereo systems, video games, color TVs, boats, campers, air conditioners, and so on. There are no obvious equivalents of traffic jams here. These all seem to be rather pure plusses in experiential terms—leaving aside for the moment the effects of pollution, waste disposal, and the rest. To question them as real benefits, as something of genuine value to us, seems absurd at first.

      But there is an odd phenomenon accompanying the accumulation of these goods. One might label it “the fallacy of the individual commodity.” Somehow, as we examine the experiential impact of all our acquisitions, we discover that the whole is less than the sum of its parts. Each individual item seems to us to bring an increase in happiness or satisfaction. But the individual increments melt like cotton candy when you try to add them up. We are not any happier as a nation now than we were twenty-five years ago, despite having a good deal more of “the good things of life.” This is attested to in a number of ways.

      For one thing, surveys taken at various times of people’s subjective sense of well-being do not show an increase over time corresponding to the increase in material possessions and comforts. Indeed, a higher proportion of Americans reported being “very happy” in 1957 than at any time in the next twenty years—despite a generally rising “standard of living” in the terms measured by economists.¹²

      These findings for different time periods are paralleled by the results of a major cross-sectional study of happiness conducted a few years ago. Summarizing that portion of the study relevant to our present concerns, Jonathan Freedman notes that “once some minimal income is attained, the amount of money you have matters little in terms of bringing happiness. Above the poverty level, the relationship between income and happiness is remarkably small.”¹³ The reason why economic growth no longer brings a sense of greater well-being, why the pleasures our new possessions bring melt into thin air, is that at the level of affluence of the American middle class what really matters is not one’s material possessions but one’s psychological economy, one’s richness of human relations and freedom from the conflicts and constrictions that prevent us from enjoying what we have. Such a state of affairs is a consequence of affluence. In a Harlem tenement, or even more in a village in India, one might well expect improvements in the material basis of life to be strongly associated with improvements in feelings of well-being. But the middle class in the United States, Western Europe, and other industrialized nations constitutes what one might call an “asymptote culture,” a culture in which the contribution of material goods to life satisfaction has reached a point of diminishing returns.

      Economists take such matters into account to some degree in their concept of “diminishing marginal utility.” Additional units of an item do not provide as much utility (pleasure, satisfaction, benefit) as do the initial units. Five thousands dollars extra a year does not mean as much to a millionaire as to a day laborer. A third or fourth or fifth helping of food is not the same as the bite we take when hungry.

      But the economist’s reckoning of what this implies about policies and values tends to be rather different from that presented here. To most economists, evidence of satisfaction is in effect provided ipso facto by the act of purchasing. That consumers may behave irrationally, that their choices of what and whether to buy, or of whether to opt for goods or for leisure, may be far from optimal for them is not really considered. It is acknowledged that consumer autonomy and rationality are only approximations to reality, but the approximation is assumed to be sufficiently close to rely on. Moreover, it is held that to make judgments about whether consumers really make the right choices is morally and methodologically illegitimate.”^*

      As a consequence, most economists do not fully appreciate the degree to which our pursuit of continuing economic growth is self-defeating. People’s responses to the peculiar properties of a society characterized by massive advertising and a competitive economic system are taken to be simple expressions of “human nature.” Lester Thurow, for example, argues that zero economic growth cannot make sense because “it does not jibe with human nature. Man is an acquisitive animal whose wants cannot be satiated.” He further asserts that this characteristic of people in our society “is not a matter of advertising and conditioning, but a basic fact of human existence. To try to straight jacket human beings into ‘small is beautiful’ is to impose enormous costs.”¹⁴

      Consider in contrast the perspective provided by Kimon Valaskakis and his colleagues in the Canadian GAMMA group study of the “Conserver Society”:

      If Americans were asked point blank whether they would agree to reduce their energy consumption by one-half, many would probably recoil in apprehension and reject the idea. Yet energy consumption in 1960 was about half what it is now. Most of us remember 1960. Surely we had a civilized country then, with roads, electricity, entertainment, and so on. Yet we were consuming only half the energy we are using now. Have we, by doubling our energy consumption, doubled our happiness?¹⁵

      Most of us would not have to think very long before answering in the negative. But we might have more difficulty in understanding quite why this is the case. How is it that we seem to enjoy each of the new things we buy and yet when all is said and done these pleasures don’t add up to any greater sense of satisfaction?

      The subjective sources of an answer to this puzzle are well captured in the following personal description by Jonathan Freedman, the author of the happiness study referred to above:

      As a student, I lived on what now seems no money at all, but I lived in a style which seemed perfectly fine. My apartment seemed then (and in retrospect still seems) like a lovely apartment, though it was not luxurious. I ate out as often as I thought I wanted to. I do not remember denying myself anything because of money, though I suppose I did. When I got a job, my income more than doubled. My rent also just about doubled. I ate out about as often as before, but the restaurants were a little more expensive. I do not remember denying myself anything because of money, though I suppose I did. As my income has grown since then, I have spent more on apartments and on restaurants and on other things, but it has always seemed to be just about the same amount of money and bought just about the same things. The major change is that I have spent more on everything, and I consider buying more expensive items. None of this has had an appreciable effect on my life or on my feelings of happiness or satisfaction. I imagine that if I earned five times as much, the same would be true—at least it would once I got used to the extra money. This is not to say that I would turn down a raise—quite the contrary. But after a while everything would settle down, the extra money would no longer be “extra,” and my life would be the same as before.¹⁶

      The point I wish to make is not that nothing makes a difference, that any change will leave our lives the same. It is that prevalent cultural assumptions and the nature of our economic system cause us to look in the wrong direction for a solution, to seek after changes that will not enhance our experience of richness in living rather than those that really can.