407. Growth and the good life 

What is the value of economic growth? It is needed to achieve enough prosperity, but why seek ongoing, endless growth beyond that? Why should we go on generating more wealth instead of working less, with more leisure to spend on other pursuits than consumption and material acquisition? This question was asked in a book ‘How much is enough?’ (2012), by Robert and Edward Skidelsky. They eloquently argued that ongoing growth is not conducive to the good life. There, as I do in this blog, they employ an Aristotelian virtue ethic, to replace the utilitarian ethic that rules economic science and from there politics.

The most fundamental point is that the good life entails a number of disparate dimensions that are incommensurable, cannot be added and subtracted in a single measure of value (see also item 79 of this blog). This upsets the paradigm of utility maximization that rules economic thought. There is not one single value to be maximized.

The literature offers a variety of lists of the good things in life, such as: health, courage, freedom or autonomy, love and friendship, empathy, material well-being, pleasure, moderation, prudence, security, intrinsic value of work, leading a useful life that contributes to society and nature, and more. Incommensurability entails that they cannot easily be traded off. How can I trade off love of knowledge and of my children, seeking satisfaction and contributing to society, self-interest and altruism? They are qualitatively different. And many of the goods of life are not tradeable. 

Why does economic growth crowd out many aspects of the good life? One factor is the insatiability of human desire. Schopenhauer, for example, argued that satisfaction of one want evokes new wants and if satisfaction were ever achieved it would generate insufferable boredom.

The Skidelsky’s recognized further factors. It is often the satisfaction not of wealth itself but of having more than others that drives acquisitiveness. An institutional factor is that with growth the poor can be pacified with the prospect of rising income, reducing the need for the politically tougher measure of more re-distribution of wealth, against the powerful lobby of the rich.

Implicitly or explicitly, economics, basing itself on liberal ethics. has made a fundamental moral assumption. It is not up to government but to citizens to determine what the good life is and how it is to be achieved. Governments should be neutral with respect to values, preserving freedom and avoiding coercion and paternalism.

There are two faults with this view. First, governments do in fact, and necessarily, make moral judgements in protecting the poor, sick and unemployed, fighting crime, promoting security, protecting the environment, and promoting health, education and culture. If in fact policy is value driven, it is better to make that explicit and bring it into debate.

Second, it is an illusion to think that consumers are autonomous in their preferences. They are affected by advertising and other actions that fuel desire, acquisitiveness, and spending.

Third, goods are produced with built-in obsolescence. For example, the software of old hardware, in computers and phones, is no longer supported, which forces people to buy ever-new hard- and software with features they do not need.

The underlying error of economic thought is two-fold. First the idea that preferences are given, not affected by options of choice and processes of choice. In fact, particularly from the pragmatist view set out in this blog, ideas, including preferences, develop in interaction with the social and natural environment. That also upsets the assumption that economic agents are autonomous.

So, economics is fundamentally misguided, and we must look how preferences are fed, formed and mobilized or ignored, and how that affects the good life.