21 of 24 people found the following review helpful:
4.0 out of 5 stars
Wealth of information and insightful interpretation, March 7, 2007
This review is from: The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950 (Hardcover)
The great American vaudeville singer Sophie Tucker remarked, "I've been rich and I've been poor---and believe me, rich is better." This book, which documents in great detail and insight the vast growth in per capita income in the United States and Britain (with some attention to other countries) over the past century, contrasts Sophie Tucker's widely shared sentiment with the carefully researched fact that people are getting richer, but they are not getting happier. What, asks Offer, accounts for this curious situation?
An earlier generation answered this question by noting that being richer involves both having more than before, and having more than others. If relative status is important but absolute wealth is not, argued Robert Frank (1985), then when everyone becomes richer, average well-being will not increase. Indeed, this had been the common view (although with numerous dissenters), since James Duesenbury's famous "ratchet effect" explanation of the macroeconomic consumption to income ratio (Duesenberry, 1949) and the similar view of Modigliani (1949). While relative status is clearly important for some individuals, there is no convincing evidence that it of great importance to most individuals. Certainly many individuals are eager to become a smaller frog in a larger pond by moving to a richer community, and the rate of migration from poor to rich countries is hardly favorable to the relative status hypothesis. Moreover this "hedonic treadmill" explanation ran afoul of the data in a brilliant study by Brickman et al. (1978). They found that large exogenously-generated changes in material circumstances, such as winning the lottery or becoming handicapped through accident exhibit little difference in subjective well-being even several months thereafter. The general implication of this line of research is that some people are happy and some are unhappy, and changes in wealth position has little long run effect on their subjective well-being.
Offer appears basically to accept this position (although he is quick to stress that insightfully interpreting the Modern Condition is not his forté9), updating it using information from several recent studies that find that poverty, divorce and unemployment have major negative impact on personal well-being, and there is a small but significant positive slope to the income and well-being relationship even above the poverty line, both within and across countries, especially when objective measures of well-being are used (mortality, morbidity, life expectancy, major incidence of mental illness, infant mortality, and the like).
Many environmentalists and progressive egalitarians accept this view on the basis of personal observation, using it to suggest alternatives to GDP growth and redistribution towards the poor. But, the hedonic treadmill is deeply counter-intuitive. People make great sacrifices to achieve financial security and to assure their children with the fruits of material progress, and upon serious introspection, few will affirm that the benefits are either relative or short-lived. Personally, I have been poor and did not like it, and I am now comfortably well-off, and I like it quite a bit---every day and every little luxury (such as sitting here overlooking the Danube writing this book review on a first-class laptop, every keystroke of which gives me great pleasure, and which plays whatever enchanting music happens to be my current whim, over an Internet connection, using a music service that I---and millions of others---can afford a subscription). Moreover, subjective well-being is very important, but the fact is that neither I nor my wife, nor my son, would be alive today if it were not for modern amenities (in this case, medical services).
Offer explains the hedonic treadmill (the term is due to Brickman and Campbell (1971), and is not used by Offer) using modern behavioral economics. Because of the common tendency to prefer small short-term rewards to large long-term rewards, we do not know how to turn the vast increases in material wealth that has come to us into real well-being (Ainslie, 1975, Elster, 1979, Loewenstein and Hoch, 1991, Laibson, 1997, Oswald, 1997, O'Donoghue and Rabin, 1999). The "challenge of affluence" is, according to Offer, the problem of learning to dealing with affluence in a manner that turns material comfort into human self-actualization. Observing the antics of (a highly visible but unknown fraction of) the newly rich, with their obscene displays of opulence, their vulgar tastes, their substance addictions and broken families, and their corrupted children does indeed remind one of the prejudices of "old wealth" that has had a few generations to adjust to material comforts against the base aspirations and untutored behavior of"new wealth." Perhaps, then, there is a hope for the affluent societies after all.
Unfortunately, there is no known science of self-actualization, so my remarks on the topic must perforce flow from observation and introspection (it is little solice to be reminded that Hume, Locke, Shakespeare, Voltaire, and their like, relied almost exclusively on such forms of knowledge). I recall my concern for such issues in writing my Ph.D. dissertation some forty years ago, the head quote of which was from the jazz pianist Mose Allison, who wrote "things are getting better and better. It's people I'm worried about." I took my inspiration from the Karl Marx of the Economic and Philosophical Manuscripts of 1844, which precede his development of historical materialism, and reflect the Zeitgeist of Hegel and Feuerbach (Marx, 1959). My interpretation of Marx's argument was that human nature (Marx used the term Gattungswesen---species-being) consists in several capacities, physical, psychomotor, cognitive, affective, aesthetic, and spiritual, and well-being consisted in the full development of these personal capacities. While a high level of material affluence is not an absolute prerequisite to such personal development, for those of use lacking an innately saintly character, it surely helps. Goods, services, and leisure, in this view, are merely instruments that facilitate the growth of personal capacities, and the cardinal sin of life in the affluent society is to "fetishize" commodities in the vain belief that they represent a direct route to self-fulfillment: what you cannot be, your money can buy for you. The correct position, I believe, is that what you are not, your money can help you become---a far more engaging, yet optimistic, take on the challenge of affluence. I developed this theme in several articles (Gintis 1972a,b 1974). The theme has been developed in an extremely powerful manner by Nobel prize economist Amartya Sen (1985).
Does affluence lead to the demand for the development of personal capacities, or to the deepening of commodity fetishism? The picture is not uniform. While there is no doubt but that American and British workers trade off income for job quality and leisure, they appear to do so at a lesser rate than their European counterparts. Indeed as Offer notes (p. 324), family work hours have reversed their long-term downward trend in the United States and has been increasing in recent years, in large part due to increase female labor market participation. Of course, both work hours and leisure have increased for American families due to the prevalence of labor-saving technology in the home and the movement of health care, food preparation, and education from the home to the market. Moreover, the quality of jobs has doubtless improved with the shift from unskilled manual labor to skilled white collar labor, and many individuals consider their work experience as a positive contribution to their well-being, much as our hunter-gatherer forebears did, with a joy that perhaps was confined to a small minority in the long diaspora between life in the Pleistocene and life in modern, technologically advanced, society. On the other hand, there is nothing quite as revolting as a statistic reported in The Economist several months back that 80% of French college students aspire to a career of lifetime security as functionaries in the French government bureaucracy. Such a career may be self-actualizing for a fraction of French youth, but my insight into human nature judges 80% as an order of magnitude too high.
Offer's analysis makes it clear that economic research and proactive social policy may play an important role in meeting the challenge of affluence. The American public, for instance, voraciously consumes advice on living the good life, the news being full of the latest studies on proper diet, health maintenance practices, spiritual life, and management of interpersonal relations. It is likely that future improvements in the treatment of mental and physical illness will somewhat level the playing field in the capacity of individuals to live fulfilled lives, liberating the self-help books from the realm of self-survival to that of self-actualization. There has been a notable increase in research in this area (Frey and Stutzer, 2005), including the impressively thorough work of Daniel Kahneman and his co-workers (Kahneman and Krueger, 2006).
Throughout most of its history, economic theory has followed Jeremy Bentham's utilitarianism. It was Bentham who opined "Prejudice apart, the game of push-pin is of equal value with the arts and sciences of music and poetry. If the game of push-pin furnish more pleasure, it is more valuable than either. Everybody can play at push-pin: poetry and music are relished only by a few." Bentham's egalitarianism is laudable, but the alternative is that Pushkin is better than pushpin, and the uneducated are cut off from fruitful paths of self-realization by not being capable of appreciating Pushkin. Indeed, my early publications took the position that not...
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3 of 3 people found the following review helpful:
4.0 out of 5 stars
Consolation for hard times, March 4, 2009
The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950
Caught in the current economic crisis your sense of well-being may be on a downturn. But then again, maybe not, provided you can still pay for the basics in life (food, shelter, health care, and the like). Avner Offer explains why.
Subjective well being (SWB) is a psychological notion, representing how satisfied we are with ourselves and our situation in life, how happy we are. There are various controversies about it among social scientists, but numerous surveys have been conducted to measure it, over many years and across many nations.
One of the things social scientists try to do with the SWB data is to ascertain the factors that drive it up or down. How do wealth and income, for example, affect SWB?
Offer draws on the findings of a wide swath of this research to report a number of interesting conclusions. He pulls together the empirical case against the idea that more is always better. We are on a "hedonic treadmill" - as our income goes up our aspirations rise as well, with no progress in our sense of subjective well-being. Cross-national levels of satisfaction are not obviously dependent on national wealth, although at the very bottom the poor certainly suffer. Non-market factors such as the family, human relations in the workplace, and other forms of attachment are better correlates to SWB in economically developed societies.
As affluence has risen our capacity for self-control and prudence has declined, Offer suggests. People exercise "myopic choice" -- rewards arrive faster than the development of capacities for self-control. Thus, "The rewards of affluence produce the disorders of affluence," he says. For example, mental disorder increases with affluence (for nations as a whole).
Given his interpretation of the data, Offer believes that a more equal distribution of wealth and income, both across nations and internally within particular societies, would enhance subjective well being. In part, this observation rests on the shape of the income and status curve: at the top it takes a big change in income to produce an increase in status; at the bottom it takes very little. And one's sense of status is very much a determinant of well-being. Although economic growth improves the quality of life in poor countries, "That does not constitute an argument for further enriching the rich in the most affluent ones," Offer contends.
There is a great deal more rich detail in The Challenge of Affluence than I have indicated here. It a book filled with charts, graphs, and tables of the sort that will be familiar to economists, sociologists, and psychologists. The academic character of it may deter the general reader, however. It should not, for the themes Offer covers are of importance to all of us.
He concludes that our "well-being depends primarily on how (and how well) we understand ourselves. Well-being is more than having more. It is a balance between our own needs, and those of others, on whose goodwill and approbation our own well-being depends." In hard times such as these that may be small consolation, but we will take what we can get.
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