The Great Disruption (30 page)

We support growth and drive it hard through the political process based on the incorrect assumption most of us hold that having more money and stuff will make us happier—that wealth is the key indicator of our personal success and that more wealth enhances our quality of life.

This is more than a casual connection. In the current model, we are firmly addicted at the personal level to more stuff. The problem is that the process of acquiring it, rather than actually satisfying our needs, drives a self-replicating cycle of dissatisfaction and greater want. We believe more wealth will satisfy us, but what actually happens is that the process actually drives inequality, which increases dissatisfaction, which we try to satisfy with more of the same!

Research in
The Spirit Level
explains this with new data, confirming what has been argued by many others, like Professor Tim Kasser. It seems inequality is one of the greatest drivers to consume. Status competition drives consumption, and inequality exacerbates status competition as we try anxiously to keep up, driven by marketers who exploit our state of anxiety.

On the topic of limits, marketers' attempts to get inside our heads seem to have no boundaries. We have advertisements blaring at us in elevators, one of the few places left in a big city for a moment of quiet reflection on our way to or from a meeting or work. We have radio announcers who transition seamlessly from commentary to advertising in the same voice, tricking us into listening without realizing it's one more push to buy.

Where does all this stop? Maybe they'd like us to rent out our foreheads so they can tattoo their brand there, turning every conversation and walk down the street into a marketing opportunity?

Given what we now know about the environmental impact of consumption and the anxiety that drives it, maybe we should see advertising as pollution, with damaging health impacts like cigarettes, and tax it accordingly, as argued by Professor Tim Kasser. Professor Herman Daly says at least we should disallow it as a cost of production and therefore remove its tax deductibility as a business expense.

While there is much to blame advertising and marketers for in all this, the underlying drivers are not a phenomena of the modern world. The classical economist Adam Smith back in 1776 emphasized our need to live a life without shame. In other words, much of our personal behavior and aspirations are driven by the desire to feel like a respectable and successful member of our community. It's just that of late, we have come to define that by the possession of ever more material goods.

This latter point is what creates the opportunity for marketers. While we cannot argue they are the cause of it, marketers exploit our tendency with very negative results, as argued in
The Spirit Level
, referring to Tim Kasser's work:

Young adults who focus on money, image and fame tend to be more depressed, have less enthusiasm for life and suffer more physical symptoms such as headaches and sore throats than others (
The High Price of Materialism
, MIT Press, 2002). Kasser believes that people tend to embrace material values when they are feeling insecure (retail therapy, anyone?).

“Advertisements have become more sophisticated,” says Kasser. “They try to tie their message to people's psychological needs. But it is a false link. It is toxic.”

So as we circle all these issues, the noose begins to close around the neck of economic growth. While it is clear that more stuff doesn't make us happy, most of us don't believe this. We are caught up in the belief that it does, reinforced by all the signals around us in marketing and the media. People with more money than we have appear more popular, more attractive, and more respected. So we consume more because we want to be more like them.

This cycle is driven harder when levels of inequality are higher, and here's the crux of the problem as well as the solution. When we consume, we drive economic growth because we increase the throughput of the quantitative economy. Economic growth tends to increase inequality, which in turn creates a stronger social craving for more, driving us to consume. No amount of consumption can satisfy this craving because the process of growth creates more inequality, which drives the desire more. Therefore we need more income to pursue it further.

We work harder to get more income. As is logical, given the drivers we just described, the more unequal our society is, the more hours we work. This gives us less time for the things that genuinely make us happy, like friendships, community, and meaning. This increases our stress and insecurity and thus increases our desire for more material forms of satisfaction.

To feed this process, governments, at our demand, drive more economic growth to create more jobs with more income, for us and our growing population. To do this, they put in place economic settings that encourage us to consume, reinforcing our anxiety-driven tendency to do so. Marketers then leap to exploit these anxieties and desires and drive consumption harder, convincing us the source of the problem can be satisfied with their product. The more growth we have, the more inequality there is and the more anxiety we feel. Then the cycle starts again.

Did I mention that economic growth is destroying the planet on which the economy and our quality of life depend? But note how we don't even need to use that argument to make the case against economic growth.

So economic growth is dead. It's dead because the planet will not support it. But it's also dead because it's economically and socially irrational—it isn't delivering improvements to the quality of life for the billion or so of us at the top of the global economic tree; in fact, even worse, it's actually now degrading it because of all the social problems inequality is causing. So it appears not only that the old saying that you can't buy happiness is true, but that we've spent a hundred years buying sustained misery, not quite the outcome the advertisers mentioned.

So once more now, economic growth is dead. It will kick and struggle for a while, but it is all over.

That leaves us with some work to do. One key task is to deal with the failure of growth to improve the quality of life for those who've met their basic needs—this means humanity overall has stopped developing. As the authors noted in opening
The Spirit Level
:

It is a remarkable paradox that, at the pinnacle of human material and technical achievement, we find ourselves anxiety-ridden, prone to depression, worried about how others see us, unsure of our friendships, driven to consume and with little or no community life.

So we need to get ourselves back on the path of human development, we need to get back on the path our grandparents put us on, of improving our quality of life. (Sorry, Grandma, thanks for the foundation you laid, and yes, we squandered that opportunity, but we'll try to sort it out now.)

How will we do this?

Not with more stuff. The barriers to a better life for people who aren't in poverty are now social and psychological, not material. To address this, we need to create, consciously and deliberately, a more equal society. This is the next logical, self-interested step to improve our quality of life. Here's why.

We now know that inequality is the greatest predictor of social ills, across an incredible range of phenomena. What's really interesting in the earlier analysis of the problem is that it indicates we can start to reverse the downward spiral of growth, inequality, and stressful lives into an upward spiral just as simply, with one lever. While consumerism drives growth, which drives inequality, which drives consumerism, if we increase equality, we decrease consumerism, which decreases growth, which increases equality. Given that doing so would also reduce the political push for growth, it will reduce the negative political response to the Great Disruption as well, thus reducing the risk of social instability a failed growth economy could cause.

Can it really be this simple? Surely we can't just rely on theoretical data for such a profound shift? The data is so strong and so consistent, we can, actually. Besides, it's not theory, it's measurement of how things are across the world. But if you need more evidence, consider this.

World War II in England was a real-world example of putting these ideas into practice. Over the years of World War II we saw rapidly
decreasing
inequality,
decreasing
individual consumption,
decreasing
material living standards, and yet rapidly
increasing
public health, and all with a huge degree of public support. Life expectancy during World War II for civilians increased at more than
twice
the rate of any other years in the twentieth century even as so much death surrounded them. Nor was this just to do with increasing nutritional standards from rationing, because the same thing happened in World War I, when nutritional standards declined. World War I was the only other time in the twentieth century when life expectancy increases matched those of World War II, again more than twice the rate of any other decades. At the end of both the decades of 1911–1921 and 1940–1951, men and women could expect to live at least 6.5 years longer than they could at the beginning.
2

While material living standards took a hit as civilian production was diverted to war production, and residents of London and other big cities literally had their homes blown apart by German bombing, equality had never had it better. For the duration of both wars, employment skyrocketed and concrete efforts were made to reduce inequality. Part of the implicit “social contract” forged in the war was that in return for the people's sacrifices, the bottom had to be lifted up and minimum standards of welfare had to be guaranteed—the so-called “nation fit for heroes.” Under these conditions, real income of the working class rose by more than 9 percent, while the real income of the middle class dropped by 7 percent. In addition to the greater sense of wartime unity that such equality brought with it, we now understand that a familiar process was at work. That process is that increases in equality bring improvements in health—and a whole raft of other indicators—for the great majority of people.

So that's sorted. Really, it is that simple. We just need to decide to do it, and if we do, we'll all be better off.

How do we do this? For a start we could put in place, through a series of policy measures, a shift away from extreme inequality. Herman Daly asks the question “What is the proper range of inequality—one that rewards real differences and contributions rather than just multiplying privilege?”

Writing elsewhere, he gives his answer and sums up the issues as follows:

Without aggregate growth, poverty reduction requires redistribution. Complete equality is unfair; unlimited inequality is unfair. So we need to seek fair limits to the range of inequality: a minimum income and a maximum income. The civil service, the military, and the university manage with a range of inequality that stays within a factor of 15 or 20. Corporate America has a range of 500 or more. Many industrial nations are below 25. Could we not limit the range to, say, 100, and see how it works?

People who have reached the limit could either work for nothing at the margin if they enjoy their work or devote their extra time to hobbies or public service. The demand left unmet by those at the top will be filled by those who are below the maximum. A sense of community, necessary for democracy, is hard to maintain across the vast income differences in the U.S. When rich and poor are separated by a factor of 500, they become almost different species.

The main justification for such differences has been that they stimulate growth, which will one day make everyone rich. This may have had superficial plausibility in an empty world, but in our full world, it is a fairy tale.
3

So one key thing we need to do is to recognize that in terms of motivating people, we don't need to pay them five hundred times as much as the lower end of those they are leading. We don't even need to pay them fifty times as much. It's not really a motivation anyway at that level. I've had countless conversations with the seriously rich, and they say it's not the money; that's just the scorecard of progress. So we need to find new scoring systems and ways to celebrate and acknowledge success.

How about contribution to society for a start? And how about we pay our military officers more and our investment bankers less? I know who contributes more to my quality of life.

It's interesting to note that most of us actually want it to be this way. But we've become so caught up with our belief in the system we've been told drives us, we think others don't. In their research for
The Spirit Level
, Wilkinson and Pickett found that most Americans want to “move away from greed and excess toward a way of life more centred on values, community, and family.” However, people feel isolated and see their fellow citizens as different from them, as the ones who are greedy and excessive. So it appears we all secretly want this to happen!

So who does support inequality? Not economists, who by a margin of four to one support governments taking action in this area.
4
Not even the top “go for growth” economists like former Fed chairman Alan Greenspan want it. He called increasing inequality a “very disturbing trend.”

It appears there is a clear and in some cases overwhelming majority of people and experts who think we need to have significantly greater equality in our society. Given that the data clearly demonstrates we'll pretty much all be better off down that path, it's time to get to work on making that happen.

Given the global context of having to share wealth in our own self-interest, this direction aligns well at the national
and
global levels.

It seems the answer to the future of human development, to making ourselves happier, and to solving a wide range of social ills including the elimination of poverty is to consciously and deliberately put in place policies and attitudes that make our society more equal.