Will Wilkinson - Latest Comments in Too Much Consumption? Let Me Decide.

Re: Too Much Consumption? Let Me Decide.

Will Wilkinson — Tue, 26 Feb 2008 17:29:03 -0000

Of course.

Re: Too Much Consumption? Let Me Decide.

conchis — Tue, 26 Feb 2008 17:16:42 -0000

Will, you know that the HDI includes income by definition don't you?

Re: Too Much Consumption? Let Me Decide.

Micha Ghertner — Fri, 22 Feb 2008 12:52:05 -0000

Rent contols are an imperfect solution to the insurmountable problem of out-of-control rents in highly desirable regions, where teachers, police, firefighters, hamburger flippers, stuffed armadillo salesmen, etc. can no longer afford to live.

I don't believe this is at all true; it's a myth along the same order as justifying farm subsidies on the grounds that small family farms need them to survive. The primary beneficiaries turn out to be neither small family farms nor lower middle class service providers.

But no matter. That's not the objection I wish to raise here. Let's assume, for the sake of argument, that your claim is true. Let's suppose that rents in highly desirable regions are indeed "out-of-control" (out of whose control?), which is sort of tautological; the price of highly desirable scarce resources tends to be more than the price of less desirable goods. So what? There is no God-given right to live exactly where you want to live, regardless of the costs. There are tradeoffs.

But along with an increased cost of living generally comes higher incomes,a problem that markets and property rights simply do solve, each and every day. As the cost of living in an area rises, teachers, police, firefighters, hamburger flippers, and stuffed armadillo salesmen find the area less and less attractive, and either move elsewhere or don't choose to move there at all. If other people living in that community still wish to maintain the same level of teachers, police, firefighters, hamburger flippers, and stuffed armadillo salesmen, and are willing to pay for it (willingness to pay being a much stronger indication than cheap talk), then they will have to agree to a higher cost of education, police and fire protection, fast food, and armadillo salesmen in order to attract back the desired service providers, or else they must live without. There is no need for government to step in and distort prices and incentives.

Re: Too Much Consumption? Let Me Decide.

Eric Barnhill — Fri, 22 Feb 2008 03:18:04 -0000

Ramon, as a teacher trying to get by in Manhattan, trying to plan for a family with my new wife, rent control and over-regulated medicine are two of my biggest problems.

In Chicago, where there is no rent control, average rent a few years ago was 1200/1BR and market rent was 1200. In NYC, average rent was roughly the same while market rent was over 2400. These types of discrepancies occur where rent control occurs as it drastically restricts housing supply. We can't afford to face market rates to find the space we need for a coming baby and will either end up crammed in our 1Br or have to leave the city. Without controls we could probably have found a good pad in the outer boroughs. If you dig in the NY Times you will find some vintage Krugman in which he points out that economists of all stripes are universally opposed to rent control as it decreases supply and quality of housing.

I can't get health insurance that costs less than $300 a month because any insurance company that tried to give me a plan that had the specifics I want would violate state regulations. It will cost us something like $1200 a month for the family plan we want and that's going to kill us. If I could purchase health insurance on the national market, I would probably pay half that or less.

Are you out there in the real world like me?

Re: Too Much Consumption? Let Me Decide.

Ramon Garcia — Fri, 22 Feb 2008 00:09:42 -0000

Market failures, Indeed.

Ideology aside, in the real world: Rent contols are an imperfect solution to the insurmountable problem of out-of-control rents in highly desirable regions, where teachers, police, firefighters, hamburger flippers, stuffed armadillo salesmen, etc. can no longer afford to live. Zoning regulations have always been, for the most part, a means for the advantaged to exclude hoi polloi and other noxious things, and do not affect the production of affordable housing, just its location (i.e. not in my back yard). But while these and other aspects of urban planning can surely be criticized, the field arose out of the desire to address the conflict and deprivation inherent to human settlements that markets and property rights simply cannot solve.

And yes, the U.S. healthcare system is a patched together accident of history. But the biggest problem today is its rapidly rising cost due largely to our "infinite model", where we just keep piling on ever more treatments, drugs and gadgets(some that work, some that do not). So while it needs to be rationed somehow, we are the only developed nation that does it through exclusion. And as they say, there are only two kinds of free-market economists, those that are standing up and those that are lying down.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Thu, 21 Feb 2008 23:16:48 -0000

Well said, Micha. Thanks for the conversation.

Re: Too Much Consumption? Let Me Decide.

Micha Ghertner — Thu, 21 Feb 2008 18:57:03 -0000

But I am not an “anti-consumerist.” I am an anti-over-consumerist. We make judgments about other excesses; why should consumption be given a pass?

One reason "excessive" consumption should be given a pass is the enormous positive externalities consumption has on wealth creation for the world's poor. The real victim here is the overconsumer herself, who may not be leading as good a life as she could be if her priorities were different. Forgive me if I have more concern for the welfare of the impoverished factory worker in a developing country who makes their livelihood, and thus improves their life prospects and that of their families, by putting together nose hair trimmers and stuffed armadillos, than I do for the welfare of far-wealthier overconsumer who purchases what you and I might (rightly or wrongly) consider frivolous and unneeded. As far as social maladies go, the day when we should start worrying about "Affluenza" is a great day indeed.

If it's a question, along Aristotelian lines, of what sorts of habits and behaviors lead to the most fulfilling and flourishing lives, I have little objections to the critiques of excessive overconsumptions, though such critiques tend to beg the question of how much is too much. Different strokes satisfy different folks. I certainly agree with many of the classical Greek philosophers; there is more to a good life than mere satisfaction of material wants: there is beauty, friendship, love. Some people fail to realize this, and think that material goods alone will fully satisfy. They aim for the wrong goals.

But, again, people vastly differ with regard to their upbringing, natural talents, and thus their aspirations and life goals. What would be considered excessive consumption for the starving artist who enjoys living the spartan lifestyle would be excessive underconsumption for others. And there is nothing wrong with that. We don't all have to live the same sorts of lives, nor would we want to if we could.

Who is the best judge of how much is too much? More often than not, individual people themselves are the best judges of how best to live their own lives. Sure, many people will make mistakes, and that is unfortunate. But surely, people will tend make fewer mistakes analyzing their own life goals and practices than the technocratic, moralistic, paternalistic busybodies like Naomi Klein and the "Buy Nothing" movement, all of whom assume they know how to run other people's lives better than the people themselves. They tend to either ignore or discount the enormous positive externalities of first-world consumption on third-world incomes - in fact, they quite often get this relationship exactly backwards, as many in this very thread have already done.

And it's no surprise that the loudest and most vociferous critics of consumption wish to replace free-market capitalism with some flavor of welfare statism of the social democratic variety, if not downright state socialism. So forgive me if I am skeptical of their claims of excessive consumption; they have ulterior motives, as do I.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Thu, 21 Feb 2008 18:15:22 -0000

Micha Gherter,

Great response! Well reasoned and articulate. And mostly correct in your analysis too.

But I am not an "anti-consumerist." I am an anti-over-consumerist. We make judgments about other excesses; why should consumption be given a pass?

Re: Too Much Consumption? Let Me Decide.

Micha Ghertner — Thu, 21 Feb 2008 18:10:10 -0000

michael strassman,

I can’t site the exact sources at the moment, but it has been noted on numerous occasions by survey researchers that Americans’ level of satisfaction with life has been in decline since the middle of the 20th century, despite an increase in the amount of consumer spending and the amount of consumer goods owned by households.

It's not surprising that you can't find your sources, because they don't exist. What the happiness data actually indicates is that while economic growth has increased in the last few decades, self-reported subjective well being has remained relatively constant, not declined. This lack of growth (very different than an actual decline) is still used by some happiness researchers as an indictment of U.S. style market capitalism, on the grounds that the upper portions of the income bracket are already happy enough, and aren't becoming that much happier with increasing wealth, and therefore won't be too upset if we expropriate their earnings.

Of course, Will Wilkinson knows all this, and has thoroughly critiqued it, as it has been the primary subject of his research at Cato for the last 3 years or so. It's just a tad amusing that you call him a "disingenuous idiot" after getting the data completely wrong.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Thu, 21 Feb 2008 17:59:55 -0000

Sigivald,

I agree with much of what you have to say, even your analysis of the unintended value of wasteful consumption (I remember learning about this rather surprising effect in Econ 101).

But the capacity to share is not dependent upon the prosperity of developed nations. From my faith tradition (Judeo-Christian), people have been obeying the command to "set aside portions for the poor" for thousands of years, and for most of that time it has been done by those who lived "hand to mouth." Sharing is more about priority than capacity (although capacity is not unimportant).

My only point on the question of unfettered consumption is that our consumer choices (What we buy and especially how much we buy) affect many more people than ourselves as sovereign individuals. Some of our conspicuous consumption is nothing less than obscene when 30,000 children die each day of hunger and hunger-related diseases.

Re: Too Much Consumption? Let Me Decide.

Micha Ghertner — Thu, 21 Feb 2008 17:58:00 -0000

Of course, market failures occur in the production and distribution of housing and medicine, as evident in the lack of affordable housing (especially rental)and growing numbers of people without health insurance in the U.S.

Yes, yes. Clearly a market failure. Rent controls, zoning regulations, urban planning, and innumerable other government - oops, I mean, market failures, clearly have nothing to do with the lack of affordable housing. So too, the high cost of health insurance has absolutely nothing to do with myriad government regulations and interventions imposed on the health care system, from tax-breaks for employer provided health insurance resulting from wage and price controls imposed during WWII, to government mandated benefits, effectively pricing out of the market bare-bones, low cost, high premium insurance against unforeseen emergencies - the actual "insurance" in insurance - turning the system into the one-sized-fits all monstrosity that it currently is.

Clearly, the "free" market is at fault for all of this, not the omnibenevolent, omnipotent, omniscient government. Market failure indeed.

Re: Too Much Consumption? Let Me Decide.

Micha Ghertner — Thu, 21 Feb 2008 17:01:57 -0000

Michael Ostrom writes,

So what are you suggesting, Conor, that we let the poor, destitute peoples of the world die on the vine because they have been obstacles to their own economic success?

Of course not. I don't see anything in Conor's post that suggests we shouldn't do anything; his post was a descriptive explanation of economic history; not a prescriptive recommendation of what should be done at this point.

However, his choice of the term "self-imposed" is unfortunate. This risks anthropomorphizing a nation or economy as a distinct, singular entity, instead of what a nation or economy actually is: a loose collection of many different individual people with various interests, only a small fraction of whom have political power. So I can't really fault you for interpreting his post as blaming-the-victim. ("they have been obstacles to their own economic success"). The vast majority of people living in underdeveloped countries stricken with grinding poverty are not responsible for their own misfortune; their misfortune is entirely the result of an accident of birth. Had they been born in a liberal capitalist economy, they no doubt would be significantly wealthier.

The "self-imposed" claim should be not be taken as a critique of individual achievement among poor people in an underdeveloped economy; rather, I suspect Conor was using the term to rebut the claim that their poverty is a result of our wealth. It isn't. Conor's critique is a critique of the systematic structure, a critique of the unfortunate political choices made by those in power (unfortunate for the ruled if not for the rulers) that pervert healthy economic incentives which lead to wealth. These obstacles are "self-imposed" only to the extent that the politically powerful have imposed them on their fellow citizens, and to a large extent (at least before the more modern era of colonialism), were not imposed from external sources in the developed world.

Apart from the essential injustice of colonialism, which I am not in any way trying to diminish, another unfortunate side effect of it is that it fooled many into believing that wealth, in all places and at all times, is a fixed entity, to be expropriated from others, instead of what it actually is, a product of mutually-beneficial, positive-sum relationships (i.e. trade).

To defend consumerism is to defend trade, the production and consumption that constitutes its very definition. It is not to dismiss the suffering of the poor as unimportant or as a necessary price to be paid. Rather, just the opposite: it is to suggest that one of the very best ways to make the poor not-poor is to trade with them, thereby creating livelihoods for the poor to feed our own consumption, and thus, providing them the means to be consumers themselves. Though somewhat obvious, it should be noted that all consumers are producers of something, and vice-versa, with the small and unsustainable exception of gift recipients, the givers of which were at some point up the chain producers.

The anti-consumerists who criticize our consumption choices to purchase nose hair trimmers and stuffed armadillos as unnecessary are ignoring the fact that many people (many in poor, developing countries, no less) earn their livelihoods manufacturing, distributing, advertising, and in lots of other ways producing that which is later consumed.

Who is the true friend of the poor: We, the capitalist Milton Friedmanite consumer apologists, who, through mutually beneficial trade, even of goods as seemingly frivolous as nose hair trimmers and stuffed armadillos, provide jobs and therefore prosperity to millions around the world, or the anti-consumerist Naomi Kleinites, who would have us cut off wealth creation at its source?

Re: Too Much Consumption? Let Me Decide.

Sigivald — Thu, 21 Feb 2008 16:41:53 -0000

Michael: It's not news to farmers all over Africa, every time there's been sustained "free food for poor people".

Immediate, short term famine relief has far less hazard.

(And the real reason people are starving in Sudan is the Sudanese government wanting them to, is it not?

Food is an excellent weapon, especially since the majority of Westerners are unlikely to assume the State in question is causing the famine, unless they've looked into the practice. The autocrats get to starve their opponents into submission or the grave, without pesky ill-will for doing so.)

(The difficulty with "wasteful" consumption is the question of who decides what's "wasteful" or not, in my experience.

Further, even "wasteful" consumption drives increased efficiency in transport and other related fields.

Heck, increased efficiency in production of the "wastefully" consumed good is often transferable as experience or technical innovation to "non-wasteful" goods.)

Michael: Sharing (voluntarily, which is why it's "sharing") is grand.

But the reason you can afford to share is that production and consumption in mass quantities have made living cheaper. Consumption has driven the rise of mankind from hand-to-mouth subsistence to modern wealth and prosperity, such that people can now afford to think about supporting others on the other side of the globe.

Broken: I submit that I am, in fact, "truly happy" regardless of the fact that someone, somewhere, is unhappy. "We" do not, in fact, live as one household, worldwide, no matter how beautiful you may find Rev. King's words, or how much they inspire you spiritually.

(And dependents of one family? Who's the parents, then, if we're all dependents? Did you mean to infantilise the entire world population?)

Re: Too Much Consumption? Let Me Decide.

Ramon Garcia — Thu, 21 Feb 2008 16:37:20 -0000

Of course, market failures occur in the production and distribution of housing and medicine, as evident in the lack of affordable housing (especially rental)and growing numbers of people without health insurance in the U.S. Markets have never, ever, adequately provided these. Most developed countries figured this out long ago. We are just beginning to.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Thu, 21 Feb 2008 10:23:48 -0000

brokencattletruck,

Here! Here! Great analogy. I suppose some on this blog will judge it "mushy-minded," but I'll take the wisdom of MLK over Milton Friedman any day.

Thanks.

Re: Too Much Consumption? Let Me Decide.

brokencattletruck — Thu, 21 Feb 2008 09:16:58 -0000

Karl’s Brother Groucho: more-intellectual-than-thou is just as stifling.

I know I am the blooming idiot walking into an intellectual country club here, but I have to submit to Martin Luther King’s vision of The World House in which we acknowledge that as individuals, special interests, and countries, we live together as dependents of one family in one ‘world house’. I don’t have any graphs, scholars, or journals to cite, only a shared experience that many of us with siblings can understand: growing up in a house where one sibling is systemically favored and another sibling is underprivileged or even malnourished is a hellish house to live in, even for the well appointed. If anyone on this thread grew up in such a house, their childhood memories will attest that no one in such a house is truly happy.

Heather, you’re right. I should live more simply.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Wed, 20 Feb 2008 22:44:36 -0000

So what are you suggesting, Conor, that we let the poor, destitute peoples of the world die on the vine because they have been obstacles to their own economic success?

Your historical analysis may be astute, but it's too aloof and academic for my taste, especially when the lives of millions of innocent children are at stake.

As for me and my family, we will choose to spend a little less money on ourselves so that we might have more to share. As the slogan goes, "Live more simply so that others may simply live."

Re: Too Much Consumption? Let Me Decide.

Heather — Wed, 20 Feb 2008 22:12:04 -0000

impoverished yet happy people like those in Magdalena, Guatemala

Yeah, but do you really believe they wouldn't be at LEAST as happy if they had the modern conveniences the U.S. poor have? And if you do, why aren't you living like they do?

Re: Too Much Consumption? Let Me Decide.

Conor — Wed, 20 Feb 2008 21:04:18 -0000

Wow, given the sharp rise in the quantity of mushy thinking on the comments on this entry, it's clear that the Daily Kos must have linked to it. In any event, radical differences in income/consumption among various areas of the world have long existed; they far predate the industrial production and supposed "unsustainable" environmental damage that has become the last great rallying cry of collectivists everywhere. When Europe in the early middle ages had living standards far beyond those in Africa during the same period, was that too an example of "social and environmental injustice"? (Never mind there was virtually no contact between the two regions.) Then as now, poverty in some parts of the world was the result of poor social/economic arrangements and a consequent lack of innovation and productivity growth. Even the rudimentary, highly-imperfect European feudal capitalism of the time far outstripped the tribal collectivism found in other parts of world. It's not a matter of the productive "taking" too much, it's always been about the self-imposed obstacles to improvement in the poorest areas.

Re: Too Much Consumption? Let Me Decide.

Paul — Wed, 20 Feb 2008 20:02:35 -0000

"But your analysis 'that giving away food perpetuates poverty' would be news indeed to the refugees in Darfur."

It might, but how long would we have to feed those refugees? Forever? If not, how will they go about feeding themselves if the forces that made them refugees in the first place are still in play?

In any case, I get the other side's point, but really, if a company dresses up some useless product with fancy advertising, isn't it the consumers' job to see through the fluff? And if not, isn't it better to let the fools be parted from their money?

Re: Too Much Consumption? Let Me Decide.

Greg Newburn — Wed, 20 Feb 2008 19:26:02 -0000

Totally off topic, but:

Could you edit Randy Barnett's most recent CU reply, "Misunderstanding Nozick"? He's got "lessor" instead of "lesser" and there's no comma after his "e.g."

It's just irritating me, that's all ...

Re: Too Much Consumption? Let Me Decide.

mk — Wed, 20 Feb 2008 18:56:52 -0000

Gordon wrote:

Bland food and boring suburbs?

Look, points about being smart about our consumption are well taken, but I sure don’t want NPR listeners dictating how I should live. That is the stuff of totalitarianism. Before you accuse me of taking this to the extreme, I am already seeing well-intentioned people paving this road to Hell with legislation and fear-mongering.

Sure. Boredom and blandness are subjective calls. Feel free to ignore those and focus on the more objectively verifiable claims.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Wed, 20 Feb 2008 18:34:45 -0000

Sigvald,

Your general comments on consumption/production are well taken. I guess I wasn't as precise as I should have been. I should have said "wasteful" stuff, not stuff in general.

But your analysis "that giving away food perpetuates poverty" would be news indeed to the refugees in Darfur.

Re: Too Much Consumption? Let Me Decide.

Michael Ostrom — Wed, 20 Feb 2008 18:16:34 -0000

Groucho, MF, and Charles Austin,

What did the "common good" ever do to you? Why so unhappy?

Re: Too Much Consumption? Let Me Decide.

Sigivald — Wed, 20 Feb 2008 17:55:22 -0000

Mr. Wilkensen’s analysis on the costs and benefits of personal consumption leaves out important stakeholders–the millions of poor and destitute peoples of the world. The more stuff we consume, the less money there is to provide basic food, shelter and medicine to people who cannot provide for themselves. This is not moralism, as Mr. Wilkenson supposes, but a question of equity and justice.

Barking mad.

The more we consume the cheaper new production is. Consumption of consumer goods is what drives more efficient production and lower prices, and generates wealth (well, to be fair, it's one thing that generates wealth, but it does do so, and amply).

People are best provided with food, shelter, and medicine by making them all cheap by making lots of them, efficiently - not by making them more expensive by making less of them, in order to have more money to ship to give them away.

(Especially since giving away food perpetuates poverty by utterly destroying local food production, which can't compete with free.

Maybe it's just that I'm in the middle of reading Human Action, but this seems like more or less Ec. 201 (if not 102) stuff.

Of course, that would explain why "social justice" types coming over from Kos wouldn't have any idea about it.)

Then again, again, I'm almost confused as to why "people prefer being wealthy to being poor" needs to be demonstrated; I'd thought it completely basic and fundamental to the human condition.