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Did you ever wonder about economic growth? Take the time to question your assumptions on economic growth and how it effects you? Thomas Homer Dixon has and what he says is quite interesting. From The Upside of Down pages 192 – 193.
“One might even say that we’re collectively fixated on maintaining growth. But this is a curious fixation because beyond a certain point – a point many of passed long ago – the higher incomes that growth produces don’t make us any happier.
When psychologists have questioned people over the years about how happy they are, they’ve found that people in rich countries are on average no happier today than people were in the 1970’s of even the 1950’s. During the intervening decades we’ve become far richer. In the United States, personal income (in constant 1995 dollars) more than doubled between 1957 and 1998. But over this period the percentage of people who said they were “very happy” actually declined slightly. Notes the American Psychologist David Myers, “We are twice as rich and no happier.” And when we look at countries around the world, we find that happiness is correlated with income up to about $10,000 to $13,000 per person annually, but beyond this threshold the correlation vanishes.
Money, in economists’ terminology, produces “diminishing returns” of happiness. Once our basic material needs are satisfied, it turns out, we don’t need more money to be happy, but we do need loving families, supportive social relationships, absorption in a satisfying activity, a sense of purpose in our lives, novelty and security from catastrophic threats to our income and health.
So, if above a relatively modest threshold, greater material wealth doesn’t make us happier, why do those of us who are already well off in rich economies work so hard to get more of it? Psychologists and behavioural economists have offered a range of answers to this question. Some say we’re stuck on a “hedonic treadmill”: our aspirations tend to exceed our income, and as our income rises, our aspirations rise in lockstep. Others stress that our happiness is partly a result of our relative social status because human beings naturally compare themselves with other people. We’re all trying to at least keep up with Mr.Jones next door. If our yardstick of comparison is income, a higher income makes us happier only if it goes up relative Jones’s income. But because Jones is working as hard as we are, nobody gets ahead, and no one feels any happier. We are, essentially, in an unwinnable income race with other people.
These theories may explain why most of work so hard to get ahead economically, and why all this effort doesn’t make us happier, but they don’t really address the deeper conundrum that’s our central concern here: why do our politicians, policy makers, economists, and public commentators remain so fixed on maintaining economic growth even when higher incomes don’t make us happier?“
Thank you Mr. Dixon. The next paragraphs in his book, (which I recommend you read) deal with answers to this problem given withing the contextual frame of capitalism. As THD is very thorough with his prescriptions let me offer my insights in addition to his.
If we need a rather modest amount of goods/income to be happy should we not support a system that focuses on building and developing society in ways that will make us more creative, productive and happy. Let’s look again -
Once our basic material needs are satisfied, it turns out, we don’t need more money to be happy, but we do need loving families, supportive social relationships, absorption in a satisfying activity, a sense of purpose in our lives, novelty and security from catastrophic threats to our income and health.
So, once the bases our covered we need things that don’t revolve around acquiring wealth. Here is where I would propose that economic systems that promote and focus on the welfare of society really shine. More egalitarian societies realize what THD has pointed out and consciously distribute their resources to make society a better place to live because they pay attention to all the factors that contribute to making our lives a happier worthwhile experience.
So things like Universal Health Care, Guaranteed Income, Old Age Security, welfare, social programs are necessary and vital parts of resilient, functional society.
Makes sense, no?
The lack of reflection in North American society reflects in our policies and economic choices. Countries that have experienced the ripsaw of neo-liberal capitalism (essentially the unbalanced “free-market” reforms that we impose on other countries to savage their people and exploit their resources) are contemplating life after the free marketers have been kicked out and those countries must once again reform a nation from the hollow shell left by ‘free-market’ plundering. In this piece from Al-Jazeera we gain an inside look at what happened at the forum and some of the topics discussed.
“I just returned from the sixth International Forum of Philosophy in Maracaibo, Venezuela, where philosophers from four continents were invited to discuss “State, Revolution and the Construction of Hegemony”.The event was inaugurated by the vice-presidents of Venezuela and Bolivia, televised by several channels, and on the last day, a prize of $150,000 was awarded to the best book presented within the Libertador Award for Critical Thinking of 2011.”
It is nice to see that somewhere in the world people can speak of the world as it is as opposed to the geo-political bias imposed by living in North America.
“Similar to the World Social Forum of Brazil, both the prize and forum aim to reflect not only upon the social progress that characterises these nations, but also the progress taking place in rest of the world; this is why only thinkers whose position is essentially leftist are invited, that is, those in the service of the weak, marginalised, and oppressed sectors of society.”
Before we jump on the ‘fair and balanced’ objection, let me remind you fair readers that the opposing point of view can be found by simply accessing any major newspaper of record, or any corporate media source.
“Regardless of how effective the conference’s statement is on the governors that read it, what is interesting for us – European academics – is the institutional significance that is given to philosophy in the region. Is there a philosophy conference or forum in the United States or EU where vice-presidents take time to inaugurate a similar event?
Before exploring this relation [between governance and philosophy], it is necessary to remember that most Latin American countries today are governed by socialist governments whose main objective is to elevate from poverty those citizens that were discarded by the neoliberal (and in some cases dictatorial) states that ruled the region in the past. This is why for more than a decade now, such renowned progressive intellectuals as Noam Chomsky, Naomi Klein, and many others have been endorsing Chavez, Morales, and other democratically elected presidents for their social programmes and economic independence from the IMF.
It might be nice to learn some of the lessons from these failed neoliberal experiments as the doctrines are still playing in Canada, US and Europe.
“But despite the social progress (since 2003, extreme poverty has been reduced by 72 per cent in Venezuela), ecological initiatives (Morales has been declared the “World Hero of Mother Earth” by the president of the United Nations General Assembly), and economic efficiency (unlike the EU, Latin American economies will grow by 4.7 per cent in 2012) of these governments, a campaign of hatred and disinformation has been taking place throughout our Western media in order to discredit these achievements.
Perhaps, as Oliver Stone pointed out in his brilliant documentary South of the Border, this campaign is a symptom of fear that citizens in the West might also begin to demand similar policies. After all, while in Europe we are cutting social services following the European Central Bank demands, Latin American states are increasing them, just as so many western protesters (“indignados”, Occupy Wall Street, and other courageous movements) demand.”
Ah, the threat of a good example. To the embattled North American Economies a threat worse than Iran, Iraq and the Taliban all rolled into one. The idea that a model focused on people rather than profit can and is working in the world. Fortunately for these Southern Cone countries they are now too big and well organized to be brought down, as Nicaragua was in the 90’s by the US.
“These Latin American countries are not calling philosophers to obtain from them rational justifications or hoping that some of us write propaganda articles for their policies. Rather, they are showing their awareness that history has not ended. I’m referring here to Francis Fukuyama’s famous theory of “the end of history” (“liberal democracy is the only legitimate form of government broadly accepted”), which has now been assimilated, if not completely incorporated, by our capitalist culture.
But history in Latin America has neither ended nor started anew. It’s simply proceeding as an alternate to our capitalist logic of economic enrichment, technological progress and cultural superiority. The Latin American countries do not aim to dominate others, but simply to evoke those whom Walter Benjamin called the “losers of history”, that is, the ones who have not succeeded within our neoliberal democratic system. These unsuccessful “shareholders” are represented not only by underprivileged citizens, but also by underdeveloped nations and continents. In this condition, philosophy is called upon to think historically – that is, to maintain living history. But how?”
How refreshing to see another point of view being expressed and some of the tenets of neoliberalism thoughtfully challenged. And how do we see our “free press” respond to such a conference? Observe. The silence is deafening. Such an unscrupulous avoidance news is a regular feature of our corporate news media, that exists mostly to feed and reinforce the system that it profits from, and most certainly not to educate its populace.
Let’s hope that people can find out more about alternative points of view and learn about competing narratives so they can more effectively judge the systems that they currently inhabit. The OWS movement is a step in the right direction but need to ground themselves in the historical struggle for citizens rights and power within the state capitalist system. Looking toward Latin America and what people have and are achieving there would be a good start.
Grabbed from Sociological Images - Again, more evidence that egalitarian policies are good not only for people, but for business.
“George W. Bush did not really say, “The problem with the French is that they have no word for entrepreneur.” But that statement does fit with the American tendency to view our country as the land of entrepreneurship (literally “enterprise”). America is, after all, the land of opportunity, where anyone can become rich. And the way to get rich is to be an independent, risk-taking entrepreneur and start your own business. That’s what we do here in the US, and we do it better than most. At least that’s what we think.
But look at this chart showing the rate of start-ups per working-age population:
The US ranks 23rd. That doesn’t quite square with all those photo-ops where the president (Obama, Bush, Clinton – they all do it) goes to some small successful company out in the heartland. What is it about these other countries that makes for more risk-takikng?
James Wimberly has an answer: the safety net. He makes the point with an analogy – his own photos of kids on a rope-walk – a single rope hung between two platforms in what looks like the Brazilian rain forest. (It’s really just a replanted hillside, formerly the site of a favela). The kids have safety devices – hard hats, a safety harness, guide-ropes to hold on to. Without these, only a few of the most f oolhardy would try a Philippe Petit walk. But the safety devices allow lots of kids to take a risk they would otherwise avoid.
The same logic applies to small business.
How many Americans are locked into jobs they hate by the fear of losing health benefits? No Dane ever has to worry about losing her right to medical care by quitting her job to go it alone
Safety devices cost money, but they pay off. On the rope-walk, you can see the reward in the expression on the kids’ faces when they reach the other platform. In the national data, you see it in the those start-ups.
The countries with significantly higher startup rates than the USA are those with stronger, more comprehensive, and more centralised social safety nets, along with correspondingly higher taxation.
See Wimberly’s entire post – with the photos, footnotes, and comments – for a fuller explanation.
Having been pointed to a neat new site called Remapping Debate by Intransigentia, I’m please to share the treasure trove of fact laden articles with my fair readership here. Denmark is a social-democratic state, it believes in protecting its people and prioritizing the needs of a healthy society ahead of the corporate greed and unsustainable money cycling that so is so typical of the US and sadly, Canada.
“While liberal and conservative pundits alike in the United States have long been issuing fatalist warnings about the “unsustainability” of the European welfare state, business leaders and economists in Denmark — a country with one of the most generous welfare states in the world — insist that, in fact, it is the U.S. model that may prove to be a dead end.
“If you come back five years from now, I guarantee that the welfare state is going to be even larger,” Ove Kaj Pedersen, an economist at the Copenhagen Business School, said in an interview in Copenhagen last month. “Why? Because for Denmark, the welfare state is our main competitive advantage.”
“Business Interest Organizations” in Denmark — whose analogues in the United States have long pushed for deregulation, lower taxes, less government spending, and less generous social benefits — agree with Pedersen: “There is a general consensus about the welfare state in Denmark,” said Steen Muntzberg, director of the Confederation of Danish Employers, which advocates on behalf of over 28,000 businesses in Denmark. “We have come to see it as a crucial part of what makes us competitive in the global economy. There is some debate around the margins, but it would be hard to find companies who don’t support the bulk of government programs.”
Stine Bosse, who until recently served as the group chief executive officer of TrygVesta, Denmark’s largest insurance company, and now serves on the board of several Danish companies, described a “symbiotic relationship” between the private and public sector in Denmark: “It’s obvious that in Denmark, both the public and business leaders regard the state as a partner,” she said. “A strong state is not just something you have to live with…it’s something we reckon is pretty important, a positive thing for business.”
Denmark and its Nordic neighbors have developed a distinctive response to the pressures caused by globalization[aka profiteering by transnational corporations] by combining relative flexibility in the labor market with strong social security provided by the state into a system they call “flexicurity.”
According to the Organization for Economic Co-operation and Development (OECD), Denmark has some of the loosest requirements in the world when it comes to an employer’s ability to hire and fire workers, (though on the OECD’s scale, it still provides eight times as much security as the U.S. does)…. “
You see, society can be structure to work for the benefits of all the people in a country. It is not some vague theoretical concept but a successful, working venture. The state, public and private industry working together to make a strong, healthy and competitive society. It can be done, and is being done. Is it perfect? Of course not, but it is a viable alternative to the the rapine corporate oligarchic system in the US and the one we are lurching toward in Canada.
Find and read the rest of this article here.
Strip away all the muddle, all the hoopla, all the baggage and then you can begin to understand what Socialism is actually about. Noam Chomsky explains how the term has been, in essence, denatured and is quite meaningless except as a dog-whistle for the normative defenders of the the capitalist status-quo.
First published in 1949 in the Monthly Review.
I republish the second half of the article as it deals more directly with socialism and why it should be implemented.
“I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning in life, short and perilous as it is, only through devoting himself to society.
The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor—not by force, but on the whole in faithful compliance with legally established rules. In this respect, it is important to realize that the means of production—that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods—may legally be, and for the most part are, the private property of individuals.
For the sake of simplicity, in the discussion that follows I shall call “workers” all those who do not share in the ownership of the means of production—although this does not quite correspond to the customary use of the term. The owner of the means of production is in a position to purchase the labor power of the worker. By using the means of production, the worker produces new goods which become the property of the capitalist. The essential point about this process is the relation between what the worker produces and what he is paid, both measured in terms of real value. Insofar as the labor contract is “free,” what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists’ requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product.