How much is enough? Money and the good life

The periodic collapses of the global economy with financial crises and subsequent contractions tend to spur thinking about better ways of life. One such example is the book “How much is enough?” by economist Robert Skidelsky and his philosopher son Edward Skidelsky. “What is money and wealth for?” and “Why do we as individuals and societies go on wanting more and more of it?” are the main question that they attempt to answer.  

 

The Skidelskys see capitalism as a two edged sword that ensures vast improvements to material conditions but also feeds greed, envy and avarice. All too often such economies are obsessed with the growth of gross domestic product, without spending too much time asking the question growth for what, nor considering what is that GDP actually measures? Leisure and pollution for instance are both excluded from GDP, they argue. “There is no subtraction for pollution and no addition for leisure. The extent to which further GDP growth will improve welfare is therefore moot.” 

The authors note an inherent human inclination to insatiability, which in their opinion stands in the way of the good life. Robert Skidelsky, is known as the author of a much-celebrated biography of John Maynard Keynes. To illustrate the “insatiability and psychological disposition that prevents us from saying enough is enough”, he cites “Economic possibilities for our grandchildren”, an essay by John Maynard Keynes written in 1930. 

In the essay Keynes argues that in line with technological progress the output of goods per hour worked increases. As a result people will have to work less and less to satisfy their needs, until in the end they will hardly have to work at all, about 15 hours per week, with the rest of the time free for leisure. 

“For the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well,” Keynes wrote. 

He expected this state to be reached 100 years later by 2030.  

Keynes thought that capitalism is based on a motivation that appeals to the money-loving individuals. This motivation was based on scarcity but with the arrival of plenty, the motivational pull would diminish until capitalism, an economy not build on perpetual growth, would abolish itself. 

Of course we know today that Keynes dream of a workless future has not materialised. We have of course become a lot richer, about six times as much, but work has not declined nearly as much as Keynes thought it would.  

“The paradox is also that the rich are among the hardest working. The idea of the idle rich has been replaced by the idea of the workaholic rich,” Robert Skidelsky says. 

So why are these productivity gains not converted into leisure?  

Skidelsky sees several reasons for this. One is improvements in the quality of goods coupled with effective advertising, which means people cannot stop consuming and never have enough. 

Another reason, Skidelsky believes, is that Keynes thought about wealth too much in quantitative terms, where owning several items for the same purpose such as owning several houses, cars etc will result in a diminishing marginal utility of those items. 

Most importantly, however, Keynes underestimated human insatiability as a key factor. Our wants are relative and not absolute. We want more than others and more than we had in the past. Conspicuous consumption, as the economist Thorstein Veblen termed the accumulation of goods to show off one’s wealth and status are certainly important.  

Boredom and restlessness or the need for constant stimulation, as described by Tibor Scitovsky in the 1976 book “The joyless society” are another source of dissatisfaction that feeds into insatiability, says Skidelsky. 

Critics of “How much is enough?” such as Richard Posner have claimed that to enjoy additional leisure we need more and more gadgets. He also noted the “high brow attitude” of the authors with regard to leisure and in turn maintained the somewhat antiquated view that work is the only thing that keeps people on the straight and narrow, while too much leisure would lead to some form of anti-social behaviour. 

The utilitarian view, in turn, believes that individuals are simply maximising their utility by gaining maximum satisfaction from life through the use of goods. 

Skitkovsky rejects this, because maximising the individual’s utility does not necessarily mean maximising the utility of a society, nor does the maximisation have to be based on goods alone. What remains are the questions the book addresses: What is wealth for? And how much money do we need to lead a good life? 

“Making money cannot be an end in itself – at least for anyone not suffering from acute mental disorder,” Skidelsky says and applies the same thinking to societies as a whole. We cannot just keep on spending, he says. “There will come a point when we will be satiated or disgusted or both. Or will we?” 

Why do we work hard for 30 to 40 years and then almost do nothing for 10 to 20 years during retirement. Why not spread leisure more evenly? 

In the book the Skidelskys present their own alternatives which, although provocative and debatable, represent a valiant attempt to find alternatives to what is becoming an increasing policy obsession with economic growth. 

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Robert Skidelsky

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