The Real Economic Threat: Contentedness
Many of us are fortunate to be stuck in our homes waiting out the corona virus curve, not one of the essential workers out risking life and health assisting those in need and keeping essential services running. As I’ve hunkered down in my own home, I’ve experienced a heightened sense of gratitude, particularly for the simpler things in life.
Eating meals together as a family. Afternoons on the porch reading in the sun. Music performed by my daughters. Evening strolls with my wife.
If I ponder the things that mean the most to me, it is those kinds of things. If I ponder the things I have devoted the most time to over the past years, it is a much different list. I believe this is a widely shared experience among my fellow Americans. That should scare economists.
The longer the economy stays shut down, the more likely we are to recognize how little of it we actually need. Yes, we need food and medicine and other essentials, but what if we became content with less? What if we became content with much less?
Yesterday I explained how we have traded away our stability in pursuit of economic growth. Today I’d like you to consider that the greatest threat to our economic model isn’t recession or even depression. It’s that we become content with our lives.
"It would appear then that there are two ways to be happy in consumption: to permanently escalate consumption (to reach the next unit of happiness, we need ever more consumption material) or to become aware that we have enough. The only thing we have a real shortage of is shortage itself."
- Tomas Sedlacek
There is a tragic paradox to the women’s movements of the past century, specifically when it comes to women in the workplace. What started out as liberation – the choice of whether or not to work and to have that labor valued and respected in the same way as a man – has evolved into something else. Today most women do not have a choice as to whether or not they work. Work is an economic necessity.
In a theoretical sense, women entering the workplace should have meant a number of positive things at the family level of finance. For a home that now had two breadwinners, it should have meant a higher standard of living. It should have provided the household with more capacity for leisure time. It should have given the other spouse the ability to work less or to choose a different job that perhaps was more fulfilling. In short, the sacrifice of extra labor should have provided the benefit of a better life for everyone.
It may have in the early years, but our insatiable lust for additional economic growth wore away those benefits (as explained by Elizabeth Warren in her book, The Two-Income Trap: Why Middle-Class Parents are Still Going Broke). We've now reached a point where we have sucked all the productivity gains out of employing the other half of our workforce -- as economists like to call women -- and still we need more growth. To what end?
Czech economist Tomas Sedlacek observed the following in his book Economics of Good and Evil:
The United States could have devoted the technological development of the last twenty years to saving time. In other words, if the United States remained at the standard of living it had twenty years ago, and were to invest technological progress into free time, maintaining this standard would require 40 percent less work, or a three-day workweek.
Stated another way: Imagine how spartan and deprived your life was back in the 1990's (not). If you were to have sacrificed and simply maintained that standard of living -- house sizes, gadgets, automobiles, etc... -- today it would only take three days of your labor each week to sustain that quality of life. So, if we measured success in terms of....say....leisure time instead of growth, the path we've been on the last two decades has resulted in a vastly reduced standard of living.
We don't measure success in leisure time, however, which is actually an interesting observation when one stops to ponder it. Why do we work? Sedlacek puts forth some provocative challenges to the growth economy, such as an examination of the modern treatment of Sabbath. The Sabbath is a day of abstinence from work recognized by Jewish and Christian religions. It's a time out. A day of rest. Not a day to work a few hours or get caught up on the yard.
Genesis describes God's labor of creating the heavens and earth and all that is as taking six days. On the seventh day, God rests. God doesn't rest because God needs to be back at the office Monday morning to create another universe. God rests because God is done.
As modern Americans, do we work for the weekend? Do we put in our toil and labor so that we can be done and then rest? Or do we, as modern economists who argue over the proper length of the work week put forth, need rest so that we can become more productive workers? Who serves whom?
The political right in this country often treats the growth economy as a religion, as if it in and of itself is a thing possessed with a higher morality. Growth is a good unto itself. This is why, in the wake of the 2008 financial crisis, some so-called conservatives had open discussions about the merits of the Beijing Consensus -- a little state capitalism with some authoritarianism thrown in -- if that is what was needed to get growth going again.
Again, do we have western democracy that can result in economic growth OR do we require economic growth in order to have western democracy? Which one are we willing to sacrifice to ensure the other?
The political left largely accepts the dogma of a centralized growth economy but -- like the One Ring in Tolkien's trilogy -- tries to wield the power for good. Instead of changing the system to respond to a bottom-up set of needs, there is a lot more power to be had in letting it churn and then allowing the smart people to reallocate the spoils from their privileged perch. And, of course, let's just take on huge amounts of debt if we have to -- of course we do, people are in need, after all -- in order to increase that (centrally-managed) growth.
The refreshing thing about Sedlacek is that, unlike his economist peers who deny humanity and replace us with homo economicus (the totally rational being that cleanly fits their mathematical models), he starts with a deeper understanding of human motivation. We're not the utility-maximizing entities that our economic models count on us to be. There's a lot of good that comes from growth, but growth is not the only good. An economy based solely on growth is one that misses out on a lot, not to mention wreaks a lot of havoc.
This brings me to one last rhetorical question: What does the end look like? When the growth economy has provided everyone a house, two cars, clothes, food, two iphones, a driverless car and a robot maid, what then? Are we done? Does our model even contemplate a time when we have enough, or at least a time when our wants are insufficient to create a 3% annual rate of gdp growth?
Sadly, the answer is "no" and so tomorrow we will examine the problem caused by debt.
"If maximum growth is the imperative of our time, at any cost, then true rest and satisfaction are not possible."
-Tomas Sedlacek
Economic productivity, cost-effectiveness and safety: stroads fail at all three. Advocates in Port Huron, Michigan, are working to make their city recognize that, so they can turn the dangerous Huron Avenue into a thriving community center.