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The
Economist’s Long Farewell
Robert E.
Lane (Yale
University, USA) “Farewell! A long farewell to all my
greatness.”
Cardinal Wolsey, Henry VIII (III, ii) Introduction Adam (an
economist named after Adam Smith [1723-1790]) and Desiderius (a humanist-social scientist named after
Desiderius Erasmus [1466-1536]) are having lunch
in a local restaurant while discussing the merits and social costs of
materialism. They are friends, of a sort. We find them in the midst of an
argument. Of course, Adam calls Desiderius
“Dessie” and we shall do the
same. “So what is
wrong with materialism?” asked Adam, wiping his material lips with a
material napkin -- or at least a modestly material paper
napkin. Dessie knocked on wood to invoke the gods of
chance to protect him from violating the laws of nature. “I want to talk about materialism
as a set of beliefs and values, the source of economic man's alleged behavior, not the metaphysical or historical
variants.” “Please get on
with it,” said Adam as though he were asking an executioner not to delay
any further. “Good
economists,” said Dessie, “have always believed
that the bundle of goods people demand changes as their income levels
rise: e.g., a smaller proportion of their income is spent on food and
shelter and a larger proportion on travel and entertainment and education
-- and saving. The only thing that economists, except for Tibor Scitovsky,i
have not already noticed is that the goods people in a rich society want
are those that are not to be purchased in the market like family felicity
and friendship. “So” asked Adam,
“why is your dinner less important than family felicity and
friendships?” “We can't
compare them until we know whether or not you have had your dinner. Your
namesake, Adam Smith assumed it was dinner time when he talked about the
dominance of material self-interest,ii and for many people in the 18th
century dinner time came more
often than did dinner. I am only reciting economists' theory of declining
marginal utility. In capsule form, if you are hungry, dinner has a higher
priority; if (after dinner), you are lonely, friendships are more
desirable.” By comparison, he
thought, explaining why two and two make four would be a deep
exercise. “All right,”
said Adam somewhat mortified, “but you are not talking simply about a
change in the goods people prefer; you are talking about a systematic
shift in values; what do you call your new system? ‘The New Humanism’? And
you want to contrast this new system with an old one, one that economists
call a ‘market economy’ and that you call, much less precisely,
‘materialism’. Aside from substituting a preference for people over
commodities, as you might say, what is the difference between the two
systems?” “You brush aside
the crucial point -- but one thing at a time,” said Dessie. “You chaps are always talking about margins,
so now I propose a marginal decline in materialism with the slack taken up
by a marginal increase in the humanistic motives and activities such as
friendship and an intrinsic interest in work. Because the data suggest
that further increases in GDP per capita in rich countries do not
contribute much to happiness,iii a
strict utilitarian analysis suggests this marginal change from pursuit of
money to pursuit of companionship or other intrinsic goals. But note that
this marginal change is utility-efficient only after that point where the
utility of one more dollar is the same as, say, one more friend. We have
passed that point in the US: number of friends is a better predictor of
happiness than is number of dollars possessed.”iv “If materialism
is necessary for growth,” Adam said, “then the lack of materialism implies
a static economy and more poverty. It is you who seem to favor a loss of well-being.” “The set of meanings I want to
explore,” said Dessie ignoring the criticism,
“lie in a measure of materialist attitudes in a consumer society. We are
not pioneers creating our own maps of unexplored terrain. Others have been
here before us. For example, Marsha Richins and
Scott Dawson have developed a measure of materialism that deals with three
aspects of the concept: (1) ‘acquisition centrality,’ meaning that
‘materialists place possessions and their acquisition at the center of their lives.’ (2) acquisition and possession
of things as the central route to happiness, that is, materialists ‘see
possessions and acquisition as essential to their satisfaction and
well-being;’ and (3) success is defined in terms of material things:
‘Materialists tend to judge their own and others' success by the number
and quality of possessions accumulated.’ Technically, these three elements
represent three independent factors in their factor analysis of a broad
range of eighteen questions. To measure the first factor, they ask, inter alia, whether the following is generally true for
the respondent: ‘Buying things gives me a lot of pleasure.’ To measure the
happiness dimension they invite responses to: ‘It sometimes bothers me
quite a bit that I can't afford to buy all the things I'd like.’ And to
test the third dimension dealing with success they ask agreement or
disagreement with the proposition: ‘Some of the most important
achievements in life include acquiring material possessions.’v “You're stacking
the deck by your definitions -- a formal rhetorical error,” said Adam.
“Here is young Albert starting out in life; he is married and has two
small children; he has to pay for shelter, food, clothing and medical care
for his family; he should save something lest his job fail and, in any
event, for his children's education. Because he cares a lot about money,
you call him a materialist and put him down. It isn't fair.” Adam seemed
to suffer vicariously for Albert. “We are not
talking about the priority of needs,”vi said Dessie. “I agree with you and, as it happens with Marx
who said someplace: ‘We must eat before we think.’ But that is true of
people with a variety of motives and points of view. It will be more
fruitful if we focus on Richins and Dawson's conceptualization of materialist
beliefs and motives.” “All right,”
said Adam, “but I still don't see what's wrong with emphasizing material
acquisitions. Albert, our young father just starting out, did. And what is
wrong with agreeing with the vast majority of Americans: those who ‘make
it’ financially have, indeed, succeeded?” “As a matter of
fact,” said Dessie wearing his social science
hat, “what Americans think of when they think of materialism is: ‘status
display,’ seeking ‘wealth for its own sake;’ and people who are
‘predisposed toward money, wealth, innovations, and the possessions of
others’.vii So Albert and the rest of
us working stiffs may or may not be a materialist, but an interest in
earning a living is neither here nor there.” Dessie felt things were going better.
“So now you have
a definition and a measure; how does this help us understand the costs of
the materialism that makes us rich?” asked Adam weary of distinctions in
what had always seemed like a straightforward natural preference for a
fungible currency that bought so many pleasures. But Dessie was off on another tack. The
Dark Side of Materialism
“First,
materialists are less generous than others,” said Dessie counting on his fingers. Richins and Dawson offered their subjects a
hypothetical $20,000 windfall and asked them how they would spend it. As
it turned out: ‘materialists would spend three times as much on
themselves, would contribute less to charity or church, give less than
half as much to friends and family.’ Materialism scores were negatively
correlated with support for a specific environmental charity. Compared to
others, materialists also
reported that they do not like to lend things to their friends and that
they do not like to have guests in their homes.viii “Second,
materialists are more invidious than others, especially but not
exclusively when they compare themselves with those who are richer than
they are.ix ‘Materialists tend to
judge their own and others' success by the number and quality of
possessions accumulated.’ They value these things more than they value
their relationships to other people.x
This may be because of lack of interest in people, a matter of taste -- or
because of the lack of social skills that haunts these thing-minded
people.” “Third,
materialists seem to be more difficult to satisfy; they report that they
need higher incomes than those low in materialism.xi More than others, they are
dissatisfied with their lives. As Durkheim
prophesied, empirical studies find that: “Although materialists expect
acquisition to make them happy, ... the lust for goods can be insatiable:
the pleasures of a new acquisition are quickly forgotten and replaced with
a desire for more.”xii
“The consequence
of all this,” said Dessie, using his hands to
wield his fork instead of for counting the points he was making, “is that
materialists are significantly less happy than are nonmaterialists: in the Richins and Dawson study, materialism was negatively
related “to satisfaction in all the aspects of life measured:” amount of
fun you are having (note they are not hedonists), income and standard of
living, friends, and even (modestly) with satisfaction with family life.”xiii These findings are not
idiosyncratic; another study including young people drawn from outside
college life found the same thing.xiv “The invisible
hand is thumbing its nose at you, Dessie,” said
Adam in a jocular tone. As you might have guessed, it isn't the fact that
people want money but why they
want it that influences their happiness. From a study of 260 business
students, we know that economic motives include security in old age,
current family support, charity (sic!), and personal motives such as
relieving self-doubt. Those who sought money for its own sake or because
of pride and vanity were, at you might expect, unhappier than others.
Those who sought money for such purposes as family support and charity
were as happy as anybody else, normally happy.xv I just can't believe” he
continued, “that the hard working people that brought us this wealth (he
looked around at the restaurant's imitation leather and Coca Cola clock --
and looked away) can have created so much prosperity while suffering the
pains of the materialism you describe.” “Remember,” said
Dessie, that we are not talking about Frank
Knight's ‘most noble and sensitive characters,’ who are condemned ‘to lead
unhappy and futile lives’xvi because
they are nonmaterialists; we are talking about
the unhappiness of perfect fits: materialists in a material civilization.
Moreover, ‘placing money high in the rank ordering [of personal goals] was
associated with less vitality, more depression and more anxiety.’ For
adolescents, ‘high ratings of the importance of financial success was
related to lower global functioning, lower social productivity, and more
behavior problems.’xvii “Are you sure you are not letting your distaste for economic man (or is it economist men?) bias your account of materialism?” asked Adam who was used to criticisms of the market on ethical ground but never on hedonic grounds. “ If it is the materialists who have brought prosperity to the world, why do people think it is an amoral set of attitudes and beliefs?” Does Materialism Crowd Out Moral and Intrinsic
Motives? “I always
thought materialism was the butt of criticisms by moralizers,” Adam
continued, “not hedonists. But I should remind you that moral economics in
its incarnation as Christian economics did not rescue the developing
countries of Europe from their poverty and, well, their ‘backwardness’ in
the Middle Ages.” “OK,” said Dessie, “will you agree that if people's material
self-interest dominates choices in the presence of monetary appeals and
wanes when community service or other ‘intrinsic’ appeals are made
salient, that materialism can be said to ‘crowd out’ non-material, often
moral appeals? “We are back to
Stigler's proposition that in any test, material self-interest will win
over non-material appeals,”xviii said
Adam. “Ah ha, but this
time the research is by economists!” said Dessie, triumphantly. “Consider why people pay taxes
under circumstances where the chance of being caught cheating is trivial.
Will you agree that the only plausible explanation is that they are
responsive to community ethical norms, that is, that ethical norms
dominate material self-interest in these circumstances?”xix “Economists
never claimed that material self-interest dominates all other interests, such as maternal
love, under all circumstances. They are talking
about market situations,” said Adam, slightly annoyed.
“OK, then,“ said
Dessie, “consider the case of attitudes toward
depositing nuclear waste in a person's own commune in Switzerland: When not offered a collective payment, a
majority supported it as a civic duty even though they knew the hazards in
such waste in their own backyards, but when offered a subsidy, far fewer
people accepted the risk. This was not because the offer of money changed
the perception of the risk.xx
Incidentally,” he continued, “this redefinition of the situation has been
found to occur in individual cases in the United States, as well.
Experiments find that people are more likely to volunteer to give blood if
they are not paid than if a payment is offered.”xxi “OK, so ethics
and identification with community may sometimes crowd out material motives
and material motives can crown out ethical and intrinsic motives,” said
Adam, hoping to limit the damage to a few extraordinary situations. “What
does that prove?” “Well,“ said
Dessie, “this Zurich crowding out research
certainty suggests that as a dominant gestalt, materialism shapes
motives and values and crowds out competing one's wherever the competition
is less forceful. If you will allow me to personify and dramatize, I see
an eternal struggle between THE MATERIALIST seeking gratification of
various acquisitive wants, and THE HUMANIST seeking competing
gratification of a different set of wants. In a relatively unrelieved
materialist culture it is not surprising that MATERIALISM wins. We stack
the cards in its favor.” Dessie hardly noticed the mixed
metaphors. Adam was tempted
to say that nature stacked the cards and that this was what Darwin was
saying in different terms, but the Darwinist defense of the market was not one he wanted to try
against Dessie. He could see that he was not
making any progress on this theme of competing material and nonmaterial
motives. He knew that the next step was an inquiry into how much
economists had to be paid to publish in the better journalsxii or, worse, whether economic
students were more selfish than others (he was familiar with the Marwell and Ames study showing that they
were),xiii and decided it was time to leave this topic. He
remembered that wicked little verse aimed at an English professor by Hicks
-- not John, but Granville -- at Harvard so long
ago:
When some men achieve a mild success
They think of spirit more, and matter less.
And as they wiser grow, wiser and fatter,
They scold the common herd who worship
matter. “I have
satisfied my material needs,” he said looking at his empty soup bowl, “and
my friendship needs.” He paused as he put his jacket on. “But
intellectually, I need more nourishment.” Notes
i
Tibor Scitovsky. 1977.
The Joyless Economy: An Inquiry into Human Satisfaction and Consumer
Dissatisfaction. New York:
Oxford University Press. vii
Susan Fournier and Marsha L.
Richins. 1991. “Some
Theoretical and Popular Notions Concerning Materialism,” Journal of Social Behavior & Personality. 6: 403-414 at p.
403. viii
Richins and Dawson, “A Consumer Values
Orientation for Materialism,” pp. 312-313. ix
Russell W. Belk. 1985. “Materialism: Trait Aspects of Living in a Material
World,” Journal of Consumer
Research, 12:
265-280. x
Richins and Dawson, “A Consumer Values
Orientation for Materialism,” pp. 304, 308. xi Ibid., p.
311. xii
Ibid., p. 308. xiii
Ibid.,
p. 313. xiv
Tim
Kasser and Richard Ryan. 1996. “Further
Examining the American Dream: Differential Correlates of Intrinsic and Extrinsic Goals,”
Personality and Social Psychology
Bulletin, 22: 280-287 at
p. 280.
xv
Abhishek
Srivastava, Edwin A. Locke, and Kathryn A. Bartol. 2001. “Money and Subjective Well-Being: It's
not the Money, It's the Motive,” Journal of Personality and Social
Psychology, 80:
959-971 xvi
Frank
Knight. 1935. The Ethics of
Competition and other Essays.
New York: Augustus M. Kelley, p. 66 xvii
Tim
Kasser and Richard M. Ryan. 1993. “A Dark Side
of the American Dream: Correlates of Financial Success as a Central Life
Aspiration,” Journal of Personality
and Social Psychology,
65: 410-422 at pp. 417, 419. xviii
George
J. Stigler. 1981. "Economics or Ethics?" In S. McMurrin, ed., Tanner Lectures on Human
Values, vol. II.
Cambridge: Cambridge University Press, p. 176. xix
Bruno
S. Frey. 1998. “Institutions and Morale: The Crowding Out Effect.” In
Avner Ben-Ner and
Louis Putterman, eds., Economics, Values, and
Organization. New York:
Cambridge University Press, 437-460. xx
Ibid.,
pp. 448-454. xxi
W.
Upton, Altruism, Attribution, and
Intrinsic Motivation in the Recruitment of Blood Donors (Doctoral dissertation, Cornell
University, 1973). Reported in John Condry and
James Chambers, “Intrinsic Motivation and the Process of Learning.” In
Mark R. Lepper and David Greene, eds. 1978. The Hidden Costs of Rewards: New
Perspectives on the Psychology of Human Motivation. Hillsdale,NJ: Wiley/ Erlbaum, p.
71 xxii
Stigler
does not report the effect of payment on economists' behavior but he does say that they cultivate ideas
which find a market (pp. 32-33), producing what people desire (p. 63), and
preach what society wants to hear (p.33). See George J. Stigler. 1982. The Economist as Preacher and Other
Essays. Chicago:
University of Chicago Press.
xxiiiGerald
Marwell and Ruth Ames. 1981. “Economists Free
Ride. Does anyone Else?" Journal of
Public Economics, 15: 259-310. Apparently Adam
was not familiar with further contrary evidence in T. D. Stanley and Ume Tran. 1998. “Economics Students Need not be
Greedy: Fairness and the Ultimatum Game,” Journal of Socio-Economics, 27: 657-664; Amanda Bennett. 1995.
“Economics Students Aren't Selfish; They're Just Not Entirely Honest.” Wall Street Journal, January 18, 1995,
B1. Prof.
Lane’s
most recent book is The
Loss of Happiness in Market Democracies. For contacting, please
use: Robert E. Lane, 558 Chapel Street, New Haven, CT 06511, USA or robert.lane@yale.edu ____________________________ SUGGESTED
CITATION: Robert E. Lane,
“The Economist’s Long Farewell”,
post-autistic
economics review,
issue no. 15, September 4, 2002, article 6. .
http://www.paecon.net/PAEReview/issue15/Lane15.htm |