My guess is that many readers would agree that economists have it wrong in many areas, and perhaps top on the list of those errors is economists’ assumption that the more and more “stuff” we have, the happier we are. Of course, we need to have our material needs met: I can’t sing and dance or play with my dog or any of those things that make life worthwhile, if I’m hungry or cold or worried about where my child and I will sleep tonight. But meeting needs is not what economists are referring to: instead, they are referring to wants. And, according to economists, we are insatiable when it comes to wants. Couple that assumption with “scarce resources” (more on that in a future posting, but suffice for now: it’s more of the econ lingo) and you have the fundamental problem established in economics: unlimited human wants but limited means to fulfill them. So, what unfolds, for mainstream economists, from this starting point is that a market economy (i.e. capitalism) is the best mechanism for addressing this fundamental problem.
A significant weakness in this argument is that it ignores how a market economy comes to dominate not just economic decision-making, but our society, our culture overall. This naturally unfolds because for a market society to prosper, to survive at all, depends on not just meeting material needs and wants but creating ever more of them. Along the market path, consumption must rise, thus income must rise, meaning production must rise and before we know it, our lives are not spent pursuing what is good, true, and beautiful, but in a long commute in noisy, polluting traffic to a job that provides little sense of value and worth.
Indeed, although the notion is given short shrift by economists (who claim their science is value-free), the market’s reach extends far beyond allocating resources to meet material needs; market values imbue and color not just the society’s economic system, but virtually every aspect of daily life, and how we view and treat humans, animals, nature and everything around us. The market economy becomes a market culture. The economy is meant to be a tool, a means to serve our well-being. But, once we begin to evaluate our well-being based on the tool, we have subverted the ends with the means.
The high cost of our drive to acquire ever more money and goods is evidenced in many ways, on the individual, on the community, on the planet. According to biologist Stephanie Kaza, each day every American consumes his or her body weight in the form of extracted and processed planetary resources, and each day our ecological footprint plants deeper into the earth. Researcher Tim Kasser has found that:
Materialistic values are associated with placing little value on freedom and self-direction, thereby decreasing the likelihood of meeting those needs. Individuals strongly concerned with materialistic values also enter experiences already focused on obtaining rewards and praise, rather than on enjoying the challenges and inherent pleasures of activities. As such, they miss out on experiences of autonomy and authenticity. Furthermore, their values direct them toward activities such as watching television and shopping that rarely provide flow or intrinsic motivation. Finally, materialistic values are associated with a tendency to feel pressured and compelled, even in behaviors consistent with these values. All of this suggests that, rather than providing paths to freedom and autonomy, people feel chained, pressured and controlled when they focus on materialistic values.
Additionally, research has shown that as we allocate more and more time to the acquisition of “stuff,” we spend less time engaged with family, friends, and community and thus these important social relationships suffer. In what is known as the “happiness formula” in positive psychology, H = S + C + V, where H = happiness, S = your biological set point, C = the external conditions of your life, and V = the voluntary or intentional activities you undertake. The most significant “C” condition for increasing happiness is the strength and number of a person’s relationships, while both noise and commuting – hallmarks of consumer society mentioned above – have been found to reduce happiness.
Research has shown at least two other important avenues by which a market society and its associated consumerism reduces our sense of well-being. First, the compulsion to acquire more goodies ultimately proves to be a futile pursuit: we are running on a non-stop hamster wheel, known as the “hedonic treadmill.” Given the “S” in the formula above has been found to be approximately fifty percent (that is, 50% of the differences among people’s happiness levels is accounted for by genetically-determined set points), the changing circumstances of our lives have a limited impact. So, if we buy a fancy new car, it provides us pleasure for only a brief amount of time, during which we “adapt” to it and shortly thereafter we return to our original level of happiness.
Second, although economists extol the wide variety of goods and services available to us via the market, research has demonstrated that this vast array creates a “tyranny of choice.” Barry Schwartz and colleagues have shown that, while having no choice creates unhappiness, bad feelings escalate as we go from having few choices to many, with the net result that the dizzying array of breakfast cereals, toothpaste, even dog food contributes to “the epidemic of unhappiness spreading through modern society.”
In sum, we find that the market society, despite the enthusiastic claims made for it by economists, not only fails by its own objectives (increased satisfaction through the acquisition of greater income and goods), but is a powerful, if not the most powerful, detrimental factor in our overall quality of life. Posted by Kate Stirling
Kate Stirling is a (very happy) Professor of Economics at the University of Puget Sound, where she has been teaching since 1984. She received her Ph.D. in Economics from the University of Notre Dame in 1987. Most of her research has been in the area of public policy, particularly regarding low-income women and children. More recently, she has embarked on a new trajector, exploring the intersection between the economics of happiness, positive psychology, and Buddhism. Her work and ideas — though not necessarily shared by her Economics colleagues — are supported by them, making her workplace a wonderful one. She knows she’s fortunate in that regard: being valued for our contributions is one of the important contributors to our sense of well-being.