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. 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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