Would anyone admit to a desire for unlimited wealth?

Andrew McAfee’s More From Less (2019) doesn’t have a lot do with the theme of this blog, but it does offer a counterpoint to Tim Jackson’s Prosperity Without Growth (2016), which I reviewed recently. McAfee and Jackson agree that a combination of technological progress and economic incentives to use resources efficiently have promoted economic growth while reducing the rate at which resources are consumed, but they differ over whether the reduction in resource consumption is enough for growth to continue indefinitely. McAfee thinks it is; Jackson doesn’t. Jackson doubts that ever-increasing economic activity is doing much to increase the happiness of people in rich countries anyway; McAfee takes it for granted that human (economic) desires are more or less infinite. Reading McAfee’s assertion, I wondered if anyone would actually admit that their desire for goods and services had no limit.

I couldn’t find any studies asking people what the limits of their desires might be, but I know of at least two well-documented theories that explain how Jackson and McAfee can both be correct in their own way. Both theories have implications for the topic of this blog.

The hedonic treadmill posits that people return to some base level of happiness after both favourable and unfavourable events. In the present context, riders on the treadmill believe that having the next model of computer, next model of car, and so on, will make them happy, and it may well do for a while. But then they get used to having that computer, car, etc., return to their usual level of happiness, and maybe dream of getting the next one.

Positional goods are ones whose appeal depends on the position that they offer in some ranking. Job-seekers, for example, want qualifications that rank them more highly than those of other candidates, regardless of whether or not the job requires these qualifications in any absolute sense.

While I suspect that hardly anyone would admit to having infinite desires, the hedonic treadmill and the desire for relative position give the effect that McAfee supposes: at any one point in time, most people want that next model and to be a bit better off than the next person. Yet Jackson observes that these people are, in a sense, wrong: getting that next model doesn’t make them feel any better in any lasting way and competing for position doesn’t leave anyone absolutely better off.

So can we ever stop working if we forever think we need the next model or forever feel a need to be ahead of the person next door? Thousands of years of warnings against the senseless pursuit of material wealth might have left no one willing to admit an insatiable desire for wealth and power, yet they don’t seem to have dampened the hedonic treadmill. And it’s hard to imagine how job offers, for example, might be made at all without ranking people somehow.

We could, perhaps, slow the production of new models or limit useless competition for position. Jackson’s idea of structuring the economy around services that are difficult to automate applies this sort of philosophy after a fashion, even though it doesn’t in and of itself reduce working hours. Even McAfee recognises that well-chosen limits contribute to our ability to get more goods from fewer resources; he talks a lot about cap-and-trade schemes for reducing pollution, for example, and it’s at least vaguely plausible that similar schemes could get the best life out of the minimum amount of work. But for now I’ll leave it to economists to work out the details.

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