What I’ve been reading

This and that, including the latest Harry Potter which my son devoured within hours of its release. But more seriously, I’ve finally written my long-promised (draft) review of Affluenza (over the fold). Comments much appreciated.

Affluenza review

The central argument of Affluenza is one that has been made repeatedly since the era of rapid economic growth began more than two centuries ago, namely, that increases in material consumption have been bought at too high a price on social, environmental and spiritual terms. This claim has deep roots in the Christian tradition, where the poor are seen as the inheritors of the Kingdom of Heaven, but it can be traced more directly to Rousseau’s famous essay Discourse on the Arts and Sciences, a response to the question of whether the development of the arts and sciences has been morally beneficial’ The very fact that the question was posed indicates that it was in the air before Rousseau’s negative answer.

Rousseau’s claim has been repeated, and attacked, in broadly similar terms, ever since. The most prominent 19th century advocate of the idea, and a source for some of its best arguments, was Thoreau whose Walden is probably the most convincing case for the virtues of a modest rural life. In the late 19th and 20th century, Simple Lifers such as Edward Carpenter carried on the same argument.

Counterattacks against this idea. A central theme in the counterattack is the ad hominem argument that advocates of restraint in consumption tend to recommend the simple life to others while enjoying a standard of living far higher than that of the average person themselves. Mr Skimpole, in Dickens’ Bleak House is an early representation of this criticism.

The most important 20th century writer on the topic, and the first user of the term ‘affluent’ in this context, was JK Galbraith, whose book The Affluent Society is the starting point for most subsequent work in this tradition, a fact that is obviously acknowledged in the choice of title for Affluenza. Galbraith introduced a new theme with the contrast between ‘private affluence and public squalor’. Although he scored plenty of points against the excesses of 1950s consumption, and such popular targets as ‘planned obsolescence’, Galbraith’s central theme was not a moral critique but an argument that an excessive focus on private consumption represented a misallocation of resources away from more urgent needs.

The fact that the critique of the affluent society has been around for such a long time tells us two things. First, it must capture something relevant to the experience of life in modern society. Otherwise, it would not keep recurring so regularly.

This point is even more apparent in the vigorous hostile reaction to arguments of this kind. Although this reaction is often phrased in terms of attacks on ‘paternalism’ or (switching genders) the ‘Nanny State’ it is notable that policy proposals for differential taxes on luxury goods attract far less hostility than do purely cultural critiques of excessive consumption. The former threaten only the hip pocket of luxury consumers, while the latter threatens their sense of self-worth.

On the other hand, given that we keep on striving for yet more material wealth and economic growth, there must be something wrong with the standard formulation of the claim. If 200 years of exhortation have not been sufficient to convince us of the joys of the simple life, it is unlikely that we are ever going to be convinced.

One clue to resolving this apparent contradiction can be obtained by observing that the output of, and demand for, books of this kind, is not constant, but follows a dialectical pattern. Periods of conspicuously excessive consumption are followed by a reaction, in which simplicity and restraint are valued. By contrast, periods of economic contraction or wartime austerity, are followed by enthusiastic consumption.

During the years of full employment after 1945, the generation who lived through the hardships of Depression and War were offered, in most cases for the first time, the chance of a middle-class lifestyle, with cars, television and the household appliances that had been invented or perfected in the first half of the 20th century (refrigerators, washing machines and so on). Not surprisingly, they embraced the opportunity with enthusiasm, and without much concern for what they might be giving up in devoting their lives to the service of a corporation (in the case of men) or an ideal of suburban domesticity (in the case of women).

It took fifteen years for a reaction to set in starting with the success of Galbraith’s book These ideas are still influential among the children of the war years and the early baby boomers. At least for large sections of these cohorts, ostentatious display is regarded as distasteful and the view that our society is overly materialistic has wide support.

The wheel turned again with the return of mass unemployment in the 1970s. Those born in the second half of the baby boom, and their younger siblings in generation X experienced rates of unemployment which, for young people, were comparable to those of the Depression. From the 1980s onwards, employers demanded increasing levels of commitment, particularly from their core ‘full-time’ employees. Where ‘full-time’ had once meant 9 to 5, Monday to Friday, with perhaps a few hours of overtime, it was now taken to imply an open-ended commitment (the term ‘flexible’ was commonly used) with average input of 50 hours per week.

Although employers initially extracted increased effort for little extra pay, they liked the new arrangements sufficiently that wages for core employees rose substantially. Unfortunately, the increase in wages along with low interest rates and favorable tax treatment generated a housing boom unparalleled in Australian history. Increasingly, higher wages went to service mortages that would have been unthinkable as recently as a decade ago. The average new home loan in Sydney in 2004 was over $250 000 of around 7 years of post-tax earnings for an average worker.

For those who already owned their own homes, the appeal of low interest rates and easy access to credit based on home equity led to dissaving, with households, on average, taking equity out of their homes and using the resulting borrowings to finance additional consumption.

It is this combination of circumstances that explains the popular appeal of Affluenza. On the one hand, the reaction against the intensification of work and the marketisation of social relations is well advanced. On the other hand, high levels of indebtedness, particularly for mortgages, and the unwillingness of most employers to match family-friendly rhetoric with real action mean that bringing work and life back into balance is more difficult than usual.

Affluenza, by Clive Hamilton and Richard Denniss, offers both a familiar diagnosis, and a relatively new (or at least rediscovered) solution. The problem is an excessive focus on material consumption, and the solution is ‘downshifting’, that is, voluntary acceptance of substantial reductions in income and working hours.

As with most such works, the book is weakest where it singles out particular items of consumption for condemnation. Part of the problem is that such critiques commonly rest on a failure to consider movements in relative prices. Items that can be held up as outrageous extravagances may in fact be quite cheap relative to obvious comparators.

As illustrations we may consider at the home espresso machine and the plasma TV. Hamilton and Denniss point out that people pay $500 for a home espresso machine (disclosure: I have one of these) when they could get a percolator for $20. But an officer worker who bought an espresso for morning tea once per workday (instead of boiling a jug to make instant) would spend much more than this in the course of a year. Since the daily visit to the coffee shop has been a part of urban life for at least two centuries, it’s hard to see that it can be represented as an exemplar of 21st century excess.

A more plausible target is the plasma TV, costing around $5000, or about five weeks wages for an average full-time worker. As Hamilton and Denniss point out, such a purchase requires a substantial reconfiguration and expansion of the house, dedicating a whole room to entertainment (note that this runs against the tendency, also criticised in Affluenza, for family members to watch different screens in different rooms). Currently, such sets represent about 6 per cent of all sets solved, and are probably found in 1 or 2 per cent of Australian homes, and the numbers are growing rapidly.

But how does this monster compare to its humble predecessor, the black-and-white set introduced in 1956? At this time, a typical TV cost around 200 pounds or three months earnings for an average worker, yet within a year of the launch, 26 per cent of Melbourne households had acquired one. As with plasma sets in 2004, the Olympic Games gave a big boost. And, as in 2004, the effect of TV on household layout and family interaction was widely noted, and widely deplored. Clearly there’s nothing new about the appeal of expensive consumer goods.

The real problem here is not one of pathological excess, as the early chapters of Affluenza suggest (even quoting a supposed psychiatric disorder ‘oniomania’), but one of misplaced priorities. A colour TV set is better than a black-and-white one, and for most purposes, a big screen is better than a small one, but if your life is dominated by a desire for bigger and better screens, something is seriously wrong. It is in the later part of the book, devoted to the phenomenon of ‘downshifting’, that this point emerges, and it is here that the book is most usefu and original.

The striking feature of the past thirty years is not the continuation of the centuries-old trend to higher levels of material consumption, but the reversal of the trend, evident since at least the middle of the 19th century to shorter hours of work. This phenomenon has been observed throughout the English-speaking world, but almost nowhere else. The result is that, Australian full-time workers put either the longest or the second-longest (after the US) hours of any developed country, surpassing such former exemplars of overwork as the Japanese. Houses are bigger, and filled with more possessions, but the time to enjoy them has been cut down.

When this trend emerged in the 1990s, there was a tendency to present those who put in longer hours as Stakhanovite heroes of the push for productivity, competitiveness and shareholder value. By the middle of the decade, however, there was a reaction in public opinion, after which working hours levelled out, and began to decline in the early years of the 21st century.

But this reaction only partially reversed the earlier increase. The result is that, compared to 20 years ago, Australian full-time workers are working more and, apparently, enjoying it less. The decline in full-time employment observed over this period is in part a response to restructuring imposed by employers. But it also reflects the fact that an increasing proportion of Australian workers are unwilling to make the sacrifices demanded by long-hours full-time employment, despite the material rewards that are on offer.

Hamilton and Denniss attach the label ‘downshifters’ to respondents to a 2002 survey who indicated that they had voluntarily taken steps that reduced their income, either by taking a lower-paying job, reducing hours worked or giving up paid employment altogether. The most common single motive was to spend more time with family (people who left work to start a family were not included). Downshifters tend to be more sympathetic to postmaterialist and family values.

As with their polar opposites, the so-called ‘aspirational voters’ downshifters are a rather fuzzy category, and it is not really clear whether the measures presented here actually define a coherent group. But politicians are in no doubt of the political reality represented by the aspirationals. As Hamilton and Denniss argue, it is time they started paying equal attention to the downshifters.

26 thoughts on “What I’ve been reading

  1. “cultural critiques of excessive consumption” don’t attract hostility because they “threaten our sense of self-worth”. They attract hostility because they presume to tell us what constitutes excess and how to live our lives.

    The asymmetry is striking: those of us who enjoy consumption couldn’t care less how those who do not enjoy consumption live. You don’t see us writing entire books devoted to encouraging the nannies to consume more. Whatever floats your boat. Yet the nannies seem desperately unhappy with the rest of us just getting on with it and enjoying ourselves. I know what looks more pathological to me.

  2. The removal of the woodstove in the kitchen meant we were cold.
    The electric oven meant Sunday roast didn’t taste as good.
    The bottled flyspray meant we developed autoimmune diseases.
    Television meant we stopped playing together.
    The supermarket meant a loss of a network of relationships with the butcher, grocery man, milk man and baker.
    The record player meant no more live bands at local dances.
    Frozen chicken meat doesn’t taste anything like the home-grown variety.

    The car meant sunday drives in the country but no more hayrides.
    Secure employment meant dad was hardly ever home.

  3. Factory, I used ABS 2005 data for gross wages of full-time workers, which seems to me to be the right comparison.

    I agree that they’re a waste of money and so, it seems do 90 per cent of buyers (not to mention those who are happy with whatever they’ve got).

  4. A couple of points:

    Affluenza offers nothing new – it repeats a series of oft-repeated complaints against consumerism and the ‘down-shifting’ that Hamilton and Denniss refer to has been discussed elsewhere under different banners. Look for instance at ‘Status Anxiety’ by Alain de Botton which argues that status (based on wealth and consumption among other factors) does not make us happy and which outlines a range of responses to status anxiety. In fact, the down-shifting phenomenon goes hand-in-hand with anti-consumerism, usually explicitly, but always at a minimum implicitly.

    Down-shifting, or whatever it is called by the current generation, does not make most people happier. It’s interesting to look at what happened to all the drop-outs of the sixties and seventies. They did not find happiness with the many Waldens they created and most of the communes evaporated after a couple of years. I expect many down-shifters will enjoy their place in the sun for a while before some other event reinvigorates their discontent, then, like the drop-outs before them, they’ll set out on the long road to reintegration.

    The key problem with Affluenza and similar books is that they attack consumerism on a moral basis and thus the authors simply appear to be luddite kill-joys. There are problems with Western consumption, both in the structure of the resulting economy and the rates of indebtedness, but more particularly in the environmental and social impact of that consumption on a global scale. A plasma TV comes at a cost – the health of manufacturers is jeopardised due to lax OHS standards in many low wage countries and vast amounts of pollutants are released in the manufacture and transport of the plasma TV. What is worse, is that too often such purchases are discarded after a few years and replaced with a newer version of the same product. Again, there is a negative environmental impact. Hamilton and Denniss carry on arguing that consumption itself is bad (or at least does us no good). They would do better to point to the environmental and social cost of consumption.

    In the end, consumption per se is morally neither here nor there. Environmental degradation and the exploitation of third-world workers is morally unacceptable. Hamilton and his cultish followers should focus on these issues.

  5. Bert Bracks, you forgot:

    “Video killed the radio star”

  6. They cost $3000 these days, but they are still a waste of money. The picture never looks as good as it does in the shops, because they only show tapes where blues and greens dominate. Unless you go top of the line ($15K+), the warm colours on plasmas are shizen. And if you don’t get a good digital signal, the whole picture is shizen.

    The screen has a life of only a few years, and that’s if you don’t burn it out by leaving a DVD on pause for too long.

  7. Not having read the original book…

    no mention in the review of the environmental impacts of excess consumption?

    Or mention of debt-fuelled consumption?

  8. While I haven’t read the book I would bundle the shiny suburban 4WD with the expresso machine and plasma TV. The fact people feel compelled to have these things suggests either credit is too cheap or something is needed to ease the pain of being on the treadmill. If ecological catastrophists are right (and they seem to have good data) then we will all be depending on backyard vegies in 20 years time. By then the trinkets will have expired and their owners might reflect on how the money could have been more wisely spent.

  9. To clarify my third point:

    I don’t think Hamilton and Denniss put forward an argument that will convince many people. They *focus* on a view that won’t attract much support. Arguments based on the environmental cost or human cost of consumption are likely to attract more support.

    The problem is with the focus of the book.

  10. In addition to longer working hours, I suspect another driver of this trend is the increase in employment by women. They are still left with the majority of childcare and household work despite spending more time in paid employment. And perhaps there is a fair bit of ‘time stress’ for couples who are both working and who also have to do the cleaning etc on the weekend (although this is contracted out by those who can afford it).


    Another interesting read. For info John, I think there’s some text missing at the end of your tenth paragraph, which starts with “It took fifteen years for a reaction to set in”, and finishes with “At least for large sections of these cohorts, ostentatious display is regarded as distasteful and the view that our society”

  12. Thanks Tom. Fixed now.

    GOTF, much of your comment appears as a quote, but there’s no attribution, and I haven’t seen it elsewhere. Can you clarify?

  13. John, it’s not meant to be a quote. It was intended as three bullet-points using the star above the eight as the bullet. Unfortunately it had an entirely different effect.

    Apologies for the confusion.

    no problem. It should have worked. Fixed now, anyway

  14. Hi there John,

    Good review. I, personally, am intrigued by the idea that there may well be diminishing marginal utility with each additional dollar earned. (Or in other words, up to a certain extent, earning more money significantly improves your happiness, but after that additional wealth does less and less for you). As I recall quite a few psychological studies seem to indicate that this is the case and I think that Lord Layard makes this point in his book “Happinessâ€? (a brief review of Happiness – from the Observer – can be read at:


  15. John,

    You’re being disingenuous here:

    “At least for large sections of these cohorts [children of the war years and the early baby boomers], ostentatious display is regarded as distasteful and the view that our society is overly materialistic has wide support. The wheel turned again with the return of mass unemployment in the 1970s. Those born in the second half of the baby boom, and their younger siblings in generation X experienced rates of unemployment which, for young people, were comparable to those of the Depression.�

    Your proposed timeframe lacks a middle bit – or, to use your “wheel� analogy, lacks about 180 degrees in the cycle – between instinctual thrift and involuntary privation.

    There’s a pretty good case for saying that those born in the 1950s are indeed this missing alterity – i.e. a lucky and hyper-consumerist generation. As you yourself belong to it, along with, I’m guessing, Affluenza’s co-author’s, I’m surprised that you should be so modest – to the point of being plainly illogical – about recognising its existence.

    Whatever unemployment privations the 1950s-born suffered in the 1970s, they would seem to have been relatively short-lived. Or are you suggesting that the 1980s – the decade exemplar of conspicuous consumption – passed the mid-boomers by, and instead principally involved: (i) the 40+ “war years� born (and older), and/or (ii) the teenaged-to-early 20s-GenX (presumably spending their parent’s money to live it up, because they couldn’t have been earning it themselves)?

    A related quibble is in your elision in referring generation X as the “younger siblings� of boomers. Since GenX extends from about 1963 until at least the mid-1970s, it is a demographic stretch to call us siblings – or anything else, for that matter – of the 1950s-born. In my case, for example (b. 1964), I have no close relative whatever (parents/siblings/aunts/uncles) born between 1945 and 1961.

    Finally, GoTF is spot on, re Affluenza’s lack of attention to the real costs at issue – environmental and third-world labour exploitation. In contrast to the 1980s, when conspicuous consumption required a decent income (or at least a talent for white-collar crime, a la Alan Bond) and so was relatively benign environmentally, the present era of mass luxury makes Affluenza’s us’n’them premise (where “us� is an implicit, moral majority) wholly redundant.

    Worse than not even offering a viable solution, Hamilton and Denniss misdiagnose the problem – themselves. Redundant academics making redundant arguments in soon-to-be redundant books – overall, it would have been kinder to our planet for them to have simply upgraded their made-in-China home entertainment tat, and settled back for the ride to hell in a handbasket.

  16. Paul, what are the fundamental respects in which your life experience differs from that of someone from a similar background born in 1962 (or, for that matter, 1956 when I was born)?

    Conversely, how is your experience similar to that of someone born in 1975, who has never, since completing high school, experienced a recession?

    0n your question about midpoints in the cycle, the end of the postwar boom was very sudden for young people. The labour market for new entrants was booming in 1970, but by 1975 it was as bad as it has been at any time since the Depression. It stayed that way for most of the next decade, (before the costs of unemployment began to fall more heavily on older 50+ workers.) There was no real midpoint.

  17. JQ i enjoyed your comments on the fashionable nature in which commentaries on ‘overconsumption’ have changed throughout the ages. I think another interesting aspect ihere s to connect it to pollution levels as there seems to be an obvious link between the discussion on sustainable consumption and pollution (this goes for Rosseau as well who wrote during the industrial revolution).

    Generally it’s amazing to note the number of economic issues that have been addressed with the topic of fashion. Apart from JQ’s discussion on working hours & Galbraith, robert franck uses conspicious consumption to advocate a across-the-board progressive consumption tax in the 90s, Scitovsky used it in the 70s to bemoan the demise of ‘cultured’ entertainment, Paul Gregory used it to criticize monopoly power in the 40s, Duesenberry attached it to macro effects in the same era, even way back in 1893, a full 6 years before veblen published his theory of the leisure class, caroline foley highlighted in the economic journal how producer specialization in fashion can equate to high investment risk.

    My question: where’s it going to stop? Most commentators dont seem to realize theres a massive aggregation problem, which applies to your comment on working hours. Precisely who is buying these plasma TVs and how refelctive are they of the average australian full-time worker? 1-2% of australian homes doesent sound very convincing. And before you label upgrading from BW to high tech TV as ‘misplaced priorities’ it may be worth considering that such consumption is not only by symptomatic of people who want to display wealth, but more generally of people who have a have a hobby in using or collecting such high tech gear. Just as many 16 year olds save years worth of summer-jobs to buy their stratocastor guitar, why cant others but plasma TVs? Before we describe things as ‘wasteful’ it seems a that one mus properly accoutn for consumer’s accumulated capital and their general consumption history.

    Finally, there may also be welfare beneficial effects of fashion cycles. With properly functioning second hand markets, fashion cycles induce a higher trickle down rate of high tech products so that more consumers can enjoy quality products that are usually out of reach in the absence of fashion. Fashion thus induces faster depreciations rates, which would positvely benefit the average full time worker.

    ps. what if “downshifting’ itself is another way of signalling status? Thorstein Veblen noted that the in the era before conspicious consumption, status was signalled through conspicious was of time, hence ‘theory of the leisure class’

  18. mR_STEGGLES,

    Interesting point about ‘downshifting’ being a signal for status. It hadn’t occurred to me, but I reckon you’re spot on. How many factory hands can downshift to a rainforest retreat in the hills behind Byron? To downshift you have to have sufficient financial resources and/or a skill set that can be taken to whichever coastal haven you choose. Relatively few can really do so.

    This position contrasts to the 60s and 70s era drop-outs who generally did not seek employment in their chosen utopia and who frequently were content with ramshackle dwellings on communes.

  19. John,

    Some of the fundamental ways in which my life experience differs from that of someone from a similar background born in 1961 (1962 is more borderline) or 1956 are:

    – Lower homeownership rates http://www.abc.net.au/am/content/2003/s990533.htm

    This ties in with a raft of other factors, of which I’m not aware of specific stats, but would seem to be reasonably inferable. One is that with lower home ownership rates comes increased reliance on relatively expensive forms of credit (e.g. credit cards). More significantly, lower home ownership rates presumably correlate with decreased job security and lower wages, relative to other cohorts. This is despite GenX being relatively highly educated.

    – Decreased fertility and higher DSP recipient rates.

    I am bagging these together, not because there is a clear correlation between them (AFAICT), but because both rates have a striking statistical “cliff�, based around those born around 1962: “Budget to reduce disabled, sole parent benefits� (Graph) AFR 13 April 2005. There are almost no DSP recipients who were born in 1960 or 1961. The numbers of 39, 40, 41 and 42 y.o. recipients (born 1962-1965) are only again reached in the late 40s age group, with those born in 1956 (at and after the 49 y.o’s, the number goes predictably, consistently up). Conversely, Parenting Payment Single recipients (admittedly a rough proxy for fertility rates generally, but certainly a more accurate guide to fertility among the relatively impecunious) are very low for those born in 1962. In fact, the rate is about *ten* times higher for those born in 1961, and even the rate for the 1956-born is much higher (about equal, in fact, to the 1964 rate).

    – Looming relative impecuniosity in retirement.

    Again, I’m not aware of specific stats here, but the fact seems reasonably inferable from juxtaposing this story http://smh.com.au/news/national/we-dont-need-no-oldage-pension/2005/07/20/1121539033458.html with this current parliamentary inquiry http://www.aph.gov.au/house/committee/efpa/super/index.htm
    All indications are that the recent crop of pension-age entrants, of which half are self-funded retirees, will be equalled or bettered, in ten years time, by the 1956-born. Needless to say, 13 years, at most, of between 3% and 9% compulsory superannuation has not been a major component of these self-funded retirees’ nest eggs. Instead, home ownership, coupled with land value inflation, and, most likely, investment housing ownership has been instrumental. In contrast, it now seems that despite GenX having three-quarters (at least) of a theoretical working lifetime accumulating 9% compulsory superannuation, this is not going to be anywhere close to enabling many to become self-funded retirees. My prediction here: self-funded retirement rates among pension-age entrants will slowly improve, up to and including the 1961-born. After this, it will go off a cliff – I know for sure* that I’ll be lining up at Centrelink for my OAP in 2029.


    I haven’t mentioned university fees/HECS so far, but they are clearly a factor** (as well as prima facie tying in with lower homeownership rates). More insidiously, the never-before-tried (AFAIK) income-contingent repayment system of HECS and Austudy supplement loans (and now full fee loans also) almost certainly can have a career-discouraging psychological effect on indebted graduates. Taking on a HECS (etc) debt involves, to a large extent, making a bet against oneself – a bet one can “win� by doing badly financially, post-graduation. Of course, this is a bet that is also winnable by doing very well financially post-graduation – and some GenX obviously have done so. But importantly, doing *middlingly* is a clear loss that carries into middle-age, if not further. (Remember here that the applicable metric is not “just� tens of thousands of dollars of debt, paid-off at a couple of thou a year: fast-rising house prices during one’s university years (as I experienced in the 1980s) is enough to make one feel behind the financial eight-ball, as they give rise to a sense of going backwards, even without considering one’s debts).

    A similar perverse disincentive is in the announcement, a few years ago, of tiered access-to-superannuation dates for those born between 1959 and 1964. Apart from the telltale significance of the dates alone, and the (surely unnecessary) fact of its being made decades in advance, there is its moral hazard. With otherwise “preserved� superannuation being accessible after six months receipt of Newstart, and the likelihood that GenX will find its meagre compulsory saving subject to further, blatantly age-discriminatory acts by government in future, there is a built-in *double* incentive to dis-save for retirement by a stint of unemployment.

    * At 41, I have a few hundred dollars in superannuation (and no assets to speak of).

    ** Of course, the well-worn argument here goes that many (older; *not* those born-1956) boomers went to uni pre-Whitlam (and so paid fees), and many Xers graduated before HECS (in 1989).

    The former claim is quite misleading – the majority of 1964-1972 uni students were there on scholarships (which not only entailed blanket fee exemptions, but also quite generous living allowances). (Based on my Year 12 marks in 1982, I’m pretty sure I would have been a scholarship kid, had I been born into that lucky era).

    The latter *is* true – which is why I haven’t emphasised HECS (etc) as a major factor of difference. In my own case, though, HECS did play a decisive role in my studies, and subsequent career. I was due to do 4th year (honours) arts in 1990 – the 6th and final year of a combined arts/law degree. But because HECS had come in in 1989, and I had already racked up $1800 in debt doing my final year of law in 1989, I decided to cut my losses, and graduate ASAP. Decisive here was the fact that I couldn’t get a HECS exemption scholarship for my arts honours year (it wasn’t that my marks weren’t good enough – it was just that there was no such thing, then, period). Oh, and there was the fact that existing students weren’t grandfathered from HECS in the first place – this was not something that the government would dared to have thrown on boomers. Certainly, it was not something that the government later thought appropriate to impose on boomers’ children, with the recent 25% HECS increases grandfathering existing students.

  20. The boom in housing prices over the past ten years or so has had big distributional consequences, favoring those who already owned houses over those who did not. The largest group of losers pretty clearly have been members of Gen Y, very few of whom owned houses at the beginning of the period. But on your stats the same is true of about half of Gen X and a minority of boomers. You’d get a much better analysis of this if you looked at class instead of cohort.

    As for university, the big issue in any comparison of cohorts is that only a small fraction of the cohorts born in the 40s and 50s went at all. The total number in 1974 when I started was 250 000. That rose to 600 000 domestic students by the mid-90s. The number has been pretty much frozen since then, and as you say fees have gone up and resources have gone down under the current government.

  21. John,

    It looks like we’re just not, and never will be, seeing eye-to-eye on this one. As far as generation Y’s supposedly even being more hardly done by in the housing stakes, your point is tendentious and premature. When they start to hit 40, c.2018, we may actually know some stats here. In the meantime, the housing market could crash – as of course a good proportion of my generation is praying for – at just the right time for Y’ers acquiring children and mortgages (i.e. their late 20s to early 30s). (For my generation such a crash may well come too late in our lifetime-earnings cycle to deliver an actual home ownership opportunity, but I’ll happily settle for Schadenfreude alone here, if need be).

    Also, here’s another stat-set proving the c.1962 demographic “cliff�, that you may care to similarly ignore or whitewash over, this time concerning Australian homelessness rate among the young:

    1976 – 10% of homeless (men) are under 25
    1986 – 40% of homeless (men and women) are under 25
    2005 – 46% of homeless (men and women) are under 25


    Whatever your generation did to, or omitted to do for, my generation in the late 1970s and early 1980s, it is now high time to own up – and pay.

  22. I haven’t read the book yet, but I’m a little puzzled by the criticisms that it does not focus enough on the environmental side of the problem.

    Hamilton at least has been pushing the environmental consequences of our behaviour for ages (including in his book Growth Fetish). Plenty of others have as well. I imagine the reason for this book is mainly that he feels that those criticisms, intellectually strong as they are, have failed to bite with policy makers, so he is trying to open a new front. If there were a shortage of literature pointing out the environmental cost of overconsumption the criticism people have leveled might be valid, but clearly this is not the case.

    I do agree however, that environmental concerns are the real reason to be concerned. If Ex-anon and his ilk are consuming sustainably I’m fine with that. However, with the exception of a few things like massages almost all the costs wacked up on those credit cards are for things that damage the environment to some extent, often heavily. I’m willing to cop a bit of environmental damage if it is a farmer in a developing nation chopping down a tree to keep the family in fuel. I don’t see why I and the rest of the planet should put up with it so somebody can get slightly better vision on their TV every two years.

    That’s aside from the issue of what is going to happen to those of us who have refused to join the splurge when the bill comes in. I’ve saved a small amount of money almost every year since I entered the workforce. If interest rates rocket up I stand to benefit a little, but I doubt it will compensate me if my job goes in a recession, something I think is quite likely. The debt binge looks to me like a party where only some take part, but everyone has to clean up.

  23. A clear demarcation occurs for the lives of those born in 1962 and following. Thanks for the figures on GenX, Paul, which are clearly linked to the worldwide economic effects of the recession. However, you and John Q are both right – as there was a massive downturn in employment in Australia in 1975, at which time the length of courses for qualifications for some professions (nursing, teaching) began slowly to increase, and it became untenable to consider leaving school before Year 11.
    Paul, you may have failed to consider the effect of the AIDS epidemic on fertility rates – plenty of people I went to school with would have been on the single parents benefit in the late 70s and early 80s.

  24. Paul, I read the sources you cited and they clearly indicate that the rise in under-25 homelessness began in the mid-1970s, as you would expect given the massive increase in youth unemployment that took place from 1975 on. As I’ve pointed out repeatedly, the biggest single divide in cohort experience depends on whether you entered the labour market before or after the end of the long postwar boom, which can be dated fairly precisely to 1974. The end of the boom hit early school leavers born after about 1958, and university graduates born after about 1952. Of course, class matters more than cohort for most purposes: it was and is better to be a university graduate born in 1960 than a labourer born in 1950.

    This divide doesn’t match well with any of the others cited in the generation game literature, such as paying HECS or getting into the housing market before the boom.

  25. Interesting to look at the names of those who have signed up to Clive Hamilton’s “Wellbeing Manifesto” which is being promoted along similar lines to his Affluenza book.

    Looking at those listed on the first page of supporters –
    http://www.wellbeingmanifesto.net/scripts/supporters.php – I’d say 75% of them would either have incomes over $100 000 (without even looking at the income of their spouses/partners) or at the very least be asset rich. It’s so much easier to advocate ‘downshifting’ when you’ve got plenty to fall back on. It all smells like more eco-facism to me.

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