How Much Is Enough? By Robert and Edward Skidelsky

How Much Is Enough? By Robert and Edward Skidelsky

“How much is enough?”  is a deceptively simple question and one which appears easy to answer. It is also a perennial and vital question as many of our actions, as individuals or as societies, have as their intention either the reduction of want (when there is not enough) or the control of waste and excess (when there is more than enough). However, as this book reveals, it is quite clear that currently we really have little idea of “How much is enough?”

The book is written by father and son academics how-much-is-enough-skidelsky(in Economics and Philosophy respectively) and, in part takes as its starting point the 1930 essay by John Maynard Keynes “Economic Possibilities for our Grandchildren”. In this essay Keynes believed that by 2030 capitalism would be hugely successful at generating wealth (which has been the case) and much more productive, requiring less labour, so we would all have much more leisure (which has not been the case). Indeed, as our wealth has increased so has our workload; it appears now that as we have more we also want more. We seem to have become an insatiable society and our wants no longer have limits.

“The question is: why do people who ‘have everything’ always seem to want more?”

Skidelsky, Edward. How Much is Enough? (p. 34). Penguin Books Ltd.

Some of this is due to the modern functioning of capitalism which valorises growth over all things. Growth and increasing consumption are the motors which drive our development. We assess our needs and wants ‘relatively’, that is, we determine our needs and desires on the basis of comparison with others. Our happiness and status arise from our position in relation to others, meaning that we will never feel we have enough and also meaning we will never feel truly happy.

 

“It is not just that we want more but that we want more than others, who at the same time want more than us; this fuels an endless race.”

Skidelsky, Edward. How Much is Enough? (p. viii). Penguin Books Ltd.

“The American combination of social equality and income inequality has since become the capitalist norm, leading to a situation in which every member of society is in a sense competing against every other.”

Skidelsky, Edward. How Much is Enough? (p. 40). Penguin Books Ltd.

In an interesting chapter they discuss the types of good which will often keep this spiral of increasing consumption moving. They discuss “bandwagon goods“, these are goods that people want as everybody has them (e.g. Mobile phones, microwaves). Envy and social conformity drive the desire for them. Then there are “snob goods“, these are goods that most people do not have (e.g. exotic holidays, cult films). Here the desire is to stand out from the crowd. Often successful snob goods will change to become bandwagon goods. Then there are “Velben goods“, these are goods which are expensive and known to be expensive (e.g. Rolex watches, Apple watches). These goods act as advertisements of the owner’s wealth.

These trends to the constant amassing of wealth might not be a concern if we knew what to do with our wealth. If our wealth allowed us to live a “good life“, then it would clearly be a boon. If we knew what was a “good life”, then we would know when we had what we required to live it. In essence, we would know “how much is enough ?” We seem unable to agree on what constitutes “the good life” therefore we continue to want and seek more wealth without thinking ‘what is this for?” It leads into the danger of loving money and wealth rather than what they provide.

All the ancient civilizations and all the main religions warned against the “love of money”. It was felt to corrupt the individual and also all of their actions; from Aristotle to Adam Smith greed and the love of money were major problems which endangered society. In prior times, until our present increasingly secular society, religion could act as a counterbalance to capitalism’s drives – the fears of being thought a sinner through avarice or gluttony, coupled with the need to display charity, may have tempered some of the excess.

 

“Money is the one thing of which there is never enough, for the simple reason that the concept ‘enough’ has no logical application to it. There is perfect health and happiness, but there is no perfect wealth.”

Skidelsky, Edward. How Much is Enough? (p. 75). Penguin Books Ltd.

The old civilizations of Europe, India and China all shared a basically Aristotelian outlook, even if it was not drawn from Aristotle. All viewed commerce as properly subordinate to politics and contemplation, while at the same time recognizing and fearing its capacity to subdue these other activities to its own end. All regarded the love of money for its own sake as an aberration. Such agreement between three great and largely independent cultures ought to give us pause.”

Skidelsky, Edward. How Much is Enough? (p. 86). Penguin Books Ltd.

Unfortunately the brakes, that these older views may have given, are now off. Our consumption and growth continue ever upward. There is no doubt that this has pulled millions out of poverty and destitution and that there are areas of the world that still need development. However, developed countries are witnessing increased personal harm from this continued greed – alcohol deaths, drug death, obesity deaths all have increased as have prescriptions for antidepressants and anxiolytics – our affluence is not continuing to buy happiness. Further, our continued consumption and production of waste now threatens the very existence of our habitat and our species. If this book prompts more people to consider “How much is enough?” it will have served a very valuable purpose.

4-out-of-5-stars


“Better is a dinner of herbs where love is, than a stalled ox and hatred therewith”
Proverbs 15:17

 

‘The Undoing Project’ by Michael Lewis

Ask people to name those who have helped us understand the human mind, or helped us to understand why we act in the way we do, and it likely that only a handful of names will be found in the replies. Freud and Jung will be the most common answers by far. This is rather sad as, important as their insights were, the work of these luminaries is now rather aged, much of the work is outdated, or has been surpassed by better explanations, or has been shown to be simply mistaken. Much of it was understandable when viewed though the lens of the Viennese culture at the time, but under the scrutiny of a modern lens it is found seriously lacking. However, they were giants of their day and were lofty shoulders on which others have stood and seen further.

These more recent giants are much less well known. Though their work is far reaching and has much better explanatory power their names remain less likely to be known. Despite their work altering the practice of medicine, causing economists to rethink their premises, changing how sportsmen play and are chosen, and even altering how the military and legal systems operate, they are still far from being household names. Daniel Kahneman and Amos Tversky are the names of two of the most important psychologists of the last century and “The Undoing Project” is the story of their friendship and their work.

This book is essentially a dual biography220px-TheUndoingProjectFrontCover it follows their lives and the lives of some who were affected by their work. As they were Israeli academic psychologists  their lives were also bound up in the history of the birth of Israel and the wars that accompanied this. As a consequence the book is lively and exciting as we see the development of their friendship, the discovery of their psychological insights, the application of these insights in medicine and industry and the unfolding of the situation in the Middle East. There are no slow sections in this book, it is densely packed but very readable.

Despite being readable and often like a thriller, ‘what will happen next”, it does not shy away from discussing the psychological research in reasonable detail. It explains their research on heuristics in judgement, explains why our view of ourselves as simply rational beings is difficult to hold, and shows some of the surprising factors that can influence our decision making. It could act as a introduction or summary of their theories but for a fuller review Daniel Kahneman’s own book “Thinking, fast and slow” is recommended.

Hopefully this book will bring more the  modern psychological work into the public eye and allow us to  view ourselves with more useful scientific insights. Knowing the limitations of our rationality, the factors which influence our decision making, and the common sources of our errors might make us less likely to fall into to error and perhaps be less easy prey to those who know these factors and use them to manipulate our choices.

4-out-of-5-stars


PS : the only caveat I might add is that there is a fair bit explained through the medium of American sports. This is awkward for a European reader. If female sexuality was a “dark continent” to Freud , then my ‘dark continent’ is the mystery that is  baseball and basketball.

The Mandibles: A Family, 2029-2047. Lionel Shriver

The Mandibles: A Family, 2029-2047. Lionel Shriver

It is difficult to categorise this novel as it crosses many genres. It a post-apocalyptic, dystopian future, science fiction story wrapped up in a family saga and present day morality tale, it contains a fair bit of humour, and  there is a fair bit of economic theory and history thrown in for leavening. Surprisingly it is all the better because of this, it is engrossing. The story follows a number of members of the Mandibles clan as they cope with the changes that follow the economic collapse in America.

The discussion about the problems with fiat money, inflation, central banking and the nature of money itself is well written and manages to explain many things, by using the form of a novel, that many economics textbooks fail to clarify. The impact of these problems is made real by the realistic descriptions of life post-collapse. Time will tell if Shriver is going to prove to be prescient, or rather, in which areas her predictions were accurate.

The characters are well drawn, some likeable, others despicable, but all believable. Shriver’s ability to reveal the darker side of our nature is well known. In this story, as the characters try to survive, many facets of human nature are turned over for assessment. We will sometimes see features we recognise in ourselves and sometimes this will not flatter, but shame, us. It is always better to be self aware and to know our faults and, if it has to be done, it is better to do it to the accompaniment of some dark comic humour.

Leaving the last word to Shriver herself :-

Plots set in the future are about what people fear in the present. They’re not about the future at all. The future is just the ultimate monster in the closet, the great unknown.

‘I, Pencil.’ L.E. Read

This is an excellent short read. More a pamphlet27831931 than a novel, it is  the autobiography of an HB pencil. By looking at the birth and ancestry of the pencil  a complicated topic of economics and knowledge theory is made easily understandable. As individuals we have only a tiny fraction of the sum of human knowledge and planning, not one of us is able to make a pencil by ourselves. But by our cooperative endeavours every one of us can own and use a pencil.

We are, in part, successful because  we don’t need to know everything about everything. We can specisalise in what brings us most pleasure, and that which plays to our strengths,  in the knowledge that others will be doing liklewise in different areas. By this, knowledge is distributed between all of us and is much more than the sum of its parts. When we act cooperatively, in a dispersed and decentralised manner we achieve much more than we ever could when we work under central guidance.

As the pencil decribes it :-

“This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.”

and

“None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies.”

Volunteering : Why do we do it ?

Volunteering : Why do we do it ?

via Daily Prompt: Volunteer

When I moved to my present home, and shifted from an urban to a rural community, I became more aware of the role that volunteering played in my and my neighbours’ lives. It is not that there is any more or less volunteering in either site but rather that the structures of community organisations, and the role these play in day to day life, are much more visible in the rural setting. It is easier to see what is going on among a few people than it is amongst very large groups.

It is clear that many people volunteer regularly to provide services to our own community and for those further afield who are in need. Obviously, as this is volunteering, it is done with no thought of payment or recompense. Indeed, the cost to volunteers in terms of  time, money, and energy is often quite considerable.  For example, one neighbour drives daily to the old peoples’ home at her own expense and spends an hour talking to elderly people who might otherwise be lonely.

So why do we do this ? Some, of a religious bent, may do it as it is part of their way of practising their faith. Other may do it in recognition or thanks of previous help given. However, looking at my friends I’d suggest that most do it because they gain pleasure from helping others. In addition to pleasure it is also part of living, being a part of a community rather than a simple consumer of the benefits of society.

Every second week in our village hall committee we meet and spend hours organising events for the community and seeing to the logistics of running various societies which have their base in our society. When we meet and talk, when we interact and exchange ideas, when we choose form options for our society, we are in fact living. While we do this we are more than individual consumers, we are not solitary agents but social beings, and while we take part like this our lives become richer and fuller.

Possibly the most quoted sentence by Adam Smith  is this below :-

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

and many people think that this suggests that selfishness was the sole key to the organisation of capitalist societies. Many portray capitalism as incompatible with altruistic actions and see the  phrase “greed is good” as one which summarises a trading society.  Many libertarians do little to counter this image.

While it is true that self-interest guides the many voluntary trades that people make everyday which allow our society to develop and grow. It is these multiple interactions  which allow us to concentrate on what we are good at, to specialise and divide labour, and to create things that would otherwise be impossible. It is through all these voluntary transactions that the spontaneous order arises which makes up our society. Billions of individuals freely interacting with billions of others give rise to the order which is the society in which we live. While this requires that the individuals look after their own interests it works because we are human and there is another side to our nature.

Unfortunately the following quote, which is the first sentence of Adam Smith’s “The Theory of Moral Sentiments” is much less frequently quoted :-

“No matter how selfish we suppose man to be, there is obviously something in his nature that makes him interested in the fortunes of others and makes their happiness necessary to him, even if he derives nothing from it other than the pleasure of seeing it”

Adam Smith believed that innately we wish to help our fellow man. Indeed he believed that the pinnacle of moral development would be “To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature”. He correctly recognised it was the combination of voluntary transactions, guided by self-interest, in association with an innate tendency to care for the welfare of others which allowed capitalism to thrive and develop.

It is this innate desire to help others alongside the gaining of pleasure by doing so that I see in my community here. I am aware that this is a universal aspect of human nature seen in people from all walks of life and in all areas of the globe. It doesn’t detract from the wealth creation of trading but rather augments it as it is the glue that creates the society in which we can pursue our dreams. I am sitting using a computer and social media to create this blog, this is just one example of the multitude of sites (Flickr, Youtube, Facebook,  Freecycle, Twitter, etc) where people create things (images, stories, songs, news, goods) simply to share with our fellows with no expectation of profit. It seems further evidence of our need to share and to give.

However, I do have some concerns that the last century has seen a change in how we view such activities as volunteering and charity. Alongside the growth of the welfare state it is possible that we have started to feel that we no longer need to undertake these activities.  Certainly the amount we give to charity has dropped from an average 10% of a middle class family’s income in  1895 to around 1% today. Friendly societies which used to provide much of the welfare that people received prior to the war when it was estimated that over three-quarters of the working population were registered with such a society were destroyed by the introduction of National Insurance. A model which was based on local planning, voluntary choice and democratic decisions when local people got together to form groups to look after themselves was swept away by Lloyd George’s changes. In their place, an unaccountable, impersonal and inefficient centrally organised state system took over.

The change to state organisation funded by taxation has had a further change which has an impact on charitable activities. As James Bartholomew said “People have changed from being team members in mutual support groups to being state dependants who feel no particular responsibility to act decently. “. It is important to feel that one is helping others, as said before it is an innate desire and part of what lifts us above other species of animal. When we organise our welfare services by taxation it removes us as individuals from the care of our neighbours. It becomes anonymous and faceless, it breaks the link between the two individuals helping each other. It removes our option to be compassionate and good as we can’t really think of ourselves as good when we have no choice over our actions.

We will always need to provide welfare for our societies and will always want to do so. We need to encourage voluntary arrangements which allow this to be done in a human, individual and engaged manner and we need to wrest welfare back from the state. We need to bring it back from the central state and back to local societies and the individuals amongst them

I think Dominic Frisby summarised this well in his “Life after the State” :-

“The giver goes unconsidered in the process of state care. Taxes are taken and that is it. But the giver too has needs. Sometimes the giver needs to be anonymous – sometimes he needs recognition. Sometimes he or she likes to be involved with the recipient in some way, sometimes not. The forced giving that is taxation destroys the satisfaction that altruistic people get from giving voluntarily. To share with others is part of humanity. In a world in which the government takes care of the poor and needy, compassion is removed from life. As a result, the state now has a monopoly on compassion! In fact it is even more bizarrely specific than that: the pro-welfare left wing has a monopoly on compassion. Anyone who doesn’t agree with the concept of a large, generous welfare state is deemed heartless and selfish.”


Volunteer


Wealth of Nations
Theory of Moral Sentiments
The Welfare State we are In
Life after the State
David Green, Working-class Patients and the Medical Establishment (Gower, 1985).

The Gilded Cage

The Gilded Cage

I do not feel that I have been so engaged in the politics of the country as I have over the last few months. During the referendum campaign I found myself torn between two options both of which carried risks and potential benefits. I started the process as someone who would be likely to vote to “remain” because of my economic cautiousness and someone who felt themselves to be an internationalist. I ended the campaign putting an “X” in the box against “leave”.

During the campaign it was clear that the push to remain was based on arguments of prosperity, that we would all have more money and more security of wealth, if we remained in the EU. Strong though these arguments were they did not settle my growing unease as I read of the anti-democratic nature of the EU and the clear evidence that the EU works to foster ‘crony capitalism’ rather then free trade and internationalism. There was good evidence that the EU is one of the drivers for the increasing unfairness of capitalism when success arises from rent-seeking by corporations in close cooperation with government agencies.

For me, immigration was never a major factor in my decision on how to vote. I support free movement of people and think that, in economic terms, immigration is usually a net benefit to an economy. However, we have to be careful that free movement is not an excuse for companies to undercut wages of local workforces by importing cheaper labour, nor an excuse to allow companies to force labour to move across the continent, often breaking up families, in the search for a decent wage. The differences in various nations’ welfare state provisions mean that taxpayers, via the government, can end up paying to allow the luxury of companies to drive down their labour costs – the companies do not pay the costs of the “social wage” that is often a large part of the differential that makes the migration attractive for workers.

I did find the paradoxical accusations of “racism” annoying. All my life I have fought against racism wherever I have encountered it. To find the term bandied about, simply as a term of abuse, to scare people in a campaign was distasteful and  probably put the first cracks in my decision to vote “remain”. The EU has done dreadful damage to farmers in non-european countries and caused many problems for potential migrants from non-european countries. It would be easier, and more accurate, to level the charge of racism against the EU with its “free movement” so long as you are Caucasian and were born in Europe.

But my worries about the financial aspects remained even when I was clear that for fairness, free trade and democracy I’s have to vote for “leave”. Though I did start to More of the house and garden 007recognise I was being offered a gilded cage – stay here, it is rich and safe, don’t worry about those abstract things they matter less than material security. But I also knew that gilt fades and gilded cages usually end up as plain prisons as time goes on. In the early days Greece would have found the EU money a wonderful incentive to participate and who would not want to be in this pretty organisation with its largesse. Most Greeks now find their cage pretty oppressive, as do increasing numbers of others (for example the large numbers of unemployed youth in southern Europe).

It felt increasing like going through a divorce. There were all the fears, stoked up by an annoyed spouse – that “how will I cope” fear, that “perhaps he’ll change” glimmer of hope, that “things are not all that bad after all” grasping at straws. This has been even more apparent in the first week apart with the erratic behaviour of the EU staff at times threatening retribution and revenge then trying a more conciliatory approach. When couples find themselves at this point in a relationship they nearly always part and almost never remarry. The gilded cage often keeps one partner there for longer then they should but eventually they recognise that some things are more important than money.

Tony Benn once said “Better a bad democracy than a good King” and he was right. To have democratic power over those who rule us is more important than short-term wealth. To have the ability to contest the rules which are made is also the best way to secure long-term prosperity. We will fare better out of the EU and may also help other countries to recognise that they can also.

The first week after the vote has strengthened my resolve and reassured me that my decision was correct. To read the response of the “remain” group has confirmed how anti-democratic they were with their calls to ignore or re-run the referendum, with their hostility to the elderly, with  their distaste for the poor of the country, and with their arrogant self-assuredness that they were correct when the majority was in error.

Whatever happens we have taken the correct first step.

 

Will Venezuela vote for change ?

Will Venezuela vote for change ?

Whatever happens, Scots working for independence would be well advised to look at the recent history of Venezuela to avoid the mistake of believing an oil rich economy can by itself avoid the disaster of socialist planned economics.Whatever happens, Scots working for independence would be well advised to look at the recent history of Venezuela to avoid the mistake of believing an oil rich economy can by itself avoid the disaster of socialist planned economics.