Wednesday, March 31, 2010

Making virtue of poverty

When I was in 7th or 8th grade one of my teachers distributed a handout to the class which compared the living standards of an American with an Indian citizen. The handout featured a graphic of an Indian boy sitting in the lotus position while wearing a minimal amount of indigenous clothing, along with some information about the average Indian's caloric intake. There was another graphic of the typical American, which I do not recall, along with their average intake, which was significantly higher than that of his Indian counterpart.

A classroom discussion followed in which our teacher informed us how much more environmentally-friendly the average Indian was, along with the oft-quoted stat that Americans comprise only 5 percent of the world's population but use a quarter of the planet's resources (although I have since seen this figure cited as high as one-third). Although my teacher's exact words escape me, the gist was that America's over-packaged, quickly disposed consumer McCulture was a form of greed which was maiming the environment. (And for the record, I actually liked this teacher a lot)

I thought about that when I read this:
With personal and national debt reaching record levels and unemployment at its most severe since the Great Depression, now may be the opportunity to abandon growth economics and come up with economic models for shrinking economies. Why not consider doing more with less and returning more to the environment than taking from it?

Today, more energy is consumed on a daily basis in New York City alone than in the entire African continent. U.S. per capita energy consumption is multiples of that of India and China, and if we let those two countries catch up to our levels, the world will implode. We should remember that Easter Island has no inhabitants because its population used up the arable land and eventually resorted to cannibalism. Don't underestimate the craziness of humans in desperate situations.
Thus begins one of the more bizarre opinion columns I have recently come across (unsurprisingly hosted at the Huffington Post, a sort of hive for inane ramblings) in which author Ann Lee takes aim at what she implies is an unsustainable way of life. This places her in the company of various European intellectuals, for whom such thinking is already in vogue.

Following the meat of her tirade, which largely consists of warning the U.S. is a fat and slothful modern-day Rome unlikely to generate the kind of innovation needed to assure our current standard of living (breaking from traditional left-wing dogma by citing high taxes and public sector unions as part of the problem), Lee calls for a rethink of economics:
The U.S. needs to get religion in the form of a new economic ideology to realign our priorities. Instead of tracking growth statistics and other economic data, we can start by figuring out a way to measure and report such things as human dignity, creativity, and degrees of freedom, and reward behavior that enhances those values we cherish. It does not make sense that most artists, teachers, and doctors - those who deliver the greatest value to society - are the least paid individuals, while investment bankers and speculators who earn the most amount of money are adding minimal value to society at best, and at worst, destroying value. We ought to find the political will to start funding research in universities that support a new way of thinking about economics.

In 1973, in the midst of the energy crisis, an economist named E.F. Schumacher published a book called Small Is Beautiful that challenged the conventional wisdom of growth economics and received widespread acclaim during a similar period of economic uncertainty. However, his theories and arguments have been all but forgotten in recent decades, as notions of greed and consumption have been promoted by big business, policymakers in government, and taste makers in the media. His ideas are certainly worth revisiting.
A few points:
  • What country is she living in where most doctors are the least paid individuals? Actual data suggests otherwise. According to the Bureau of Labor Statistics, meanwhile, median teacher salary is $47-51,000 -- and the job comes with some nice perks like summer vacations. And what is an artist anyhow? Does someone who engages in finger-painting really deliver the greatest value to society? Seems to me that many artists who excel at their profession, such as movie directors and musicians, actually make good money.
  • Why are investment bankers and speculators demonized? Speculators help money find its most productive use, thus enriching society.
  • Although Lee's politics are not clear, I've noticed that this desired shift towards measuring economic progress based on metrics such as happiness, dignity and creativity seems to be gaining favor on the left. I suspect this is really just a form of goalpost moving, given that the overwhelming preponderance of evidence suggests economic freedom rather than central planning is the best way to achieve growth and development. Thus, it is imperative that a new measuring stick is found, for otherwise left-wing economic thought will be further undermined. I also imagine it is no accident these proposed metrics are thoroughly subjective, which makes it even more difficult to separate success and failure.
Human beings are living at the apex of our development. There is no better time to be alive, and the future -- provided we do not regress through the adoption of statist economic policies -- stands to be even brighter. To abandon the present course, lower our sights on what is possible and settle for less would be exactly the wrong move.

1 comment:

Plans to Prosper said...

The world will implode!! I see they're not even trying to come up with reasoned arguments anymore. THE WORLD WILL IMPLODE unless you do everything exactly the way I tell you to! Don't let them Chinese get too wealthy or they might start thinking they can interact with us as equals. And the world will implode!

Seriously though, I think "happiness economics" is fascinating, and there's a lot of potential to learn a lot about the human condition. But it's just ridiculous (or perhaps sadistic) to look around at a recession and think, "Gee, I wish the world was like this all the time."