- Cafe Hayek - https://cafehayek.com -

A Note on Growth

Tweet [1]

Commenting on my recent post about economic progress since 1982 [2], Dave Gardner of Growthbusters writes

Hmm. I suppose this seems like progress if your world revolves around consumption. It would be interesting to compare the quality and useful life of the products.

As I commented in response to Mr. Gardner, I agree that such a comparison would be interesting – and useful.  I suspect that it would show that, on the whole, the qualities of products are today higher than they were in 1982.

To be as meaningful as possible, such a comparison would have to look at price-adjusted quality, or quality-per-real-dollar spent.  Any such ‘objective’ comparison would in practice be difficult to pull off.  But here I believe our subjective assessments serve well-enough.  How many of us, for example, would choose, were such a choice presented to us, to exchange our 2014 smart phone and its service agreement at their 2014 prices for a bundle from 1982 containing – at their 1982 prices – a telephone, a calculator, an alarm clock, a Walk-Man or boom box, a compass, a set of road maps, and a Rolodex?  My guess is that very few of us would choose to make such an exchange.  Now ‘inflate’ the work-time costs of a 2014 smart phone and its service agreement to the work-time cost of the suggested bundle from 1982.  I believe that most people would still choose the 2014 smart phone, even at this inflated work-time cost, over the 1982 bundle of goodies.

But the second sentence of Mr. Gardner’s comment is not the one that most interests me.  His first sentence does.  (I note only in passing that the two sentences of his comment strike me as being inconsistent with each other.  Someone whose world revolves only around consumption surely cares more about product quality than does someone who isn’t much interested in consumption.)

There’s a great deal to say about the myth, that I gather Mr. Gardner accepts, that those of us who argue that freer markets promote greater economic growth believe that consumption is the be-all and end-all of human existence.  This myth is old, yet it has no grounding in reality; it’s a product of erroneous presumptions on the part of people who don’t bother to read carefully the case for economic freedom and material prosperity.  (No one can read, for example, Adam Smith’s Wealth of Nations and conclude that this great champion of free markets, free trade, and economic prosperity for the masses believed that people’s worlds should ‘revolve around consumption.’)

Yet while there is much to say about this myth, I content myself here to say only what is – or what ought to be – obvious: greater materially prosperity makes it easier for people to pursue ‘higher’ goals.  Parents who must literally struggle to feed and house their children have no time to read Schopenhauer or Rachel Carson or even John Grisham; they cannot afford to immerse themselves in the music of Beethoven or Bartok or even Madonna; they cannot enjoy leisurely strolls through the meadows or engage in frequent fascinating conversations with friends over cups of coffee or pints of ale.  In a society of such poor people, children die with great frequency, as they did before the rise of industrial capitalism.  And children who remain alive aren’t schooled or enrolled in chess clubs; they instead toil on farms or in primitive factories.

To Mr. Gardner (and to the many who share his view that economic growth is harmful, or who have somehow divined that we humans now have had all the economic growth that is on net good for us), I say read history.  Read about life before the industrial age.  Read even about life in America in the 1970s, when Americans had less leisure than today [3].  Read also solid scholarship on the relationship between economic growth and culture – for example, my colleague Tyler Cowen’s 1998 book, In Praise of Commercial Culture [4].

And I say also: mind your own business.  To the extent that your objection to economic growth is that it promotes or reflects values that you disapprove of, that’s fine.  I have no wish to suggest that you change your values.  And I would encourage you to live your values, as you are able to do: don’t consume very much.  But keep your nose out of the business of those of us who celebrate and enjoy and appreciate modernity and economic growth.  If you wish to continue to think us ‘shallow’ or ‘narrowly materialistic,’ that’s okay.  The vast majority of us are no such thing, but I am uninterested in what you think of me.  I am, however, interested in preventing you from using government in any way to affect the way that I and others lead our lives.