Consumerism, Happiness, and the Economy

David Cain has a great post about the real reason for the 40-hour workweek: Your Lifestyle Has Already Been Designed. Here's the bottom line:

As technologies and methods advanced, workers in all industries became able to produce much more value in a shorter amount of time. You’d think this would lead to shorter workdays.

But the 8-hour workday is too profitable for big business, not because of the amount of work people get done in eight hours (the average office worker gets less than three hours of actual work done in 8 hours) but because it makes for such a purchase-happy public. Keeping free time scarce means people pay a lot more for convenience, gratification, and any other relief they can buy. It keeps them watching television, and its commercials. It keeps them unambitious outside of work.

We’ve been led into a culture that has been engineered to leave us tired, hungry for indulgence, willing to pay a lot for convenience and entertainment, and most importantly, vaguely dissatisfied with our lives so that we continue wanting things we don’t have. We buy so much because it always seems like something is still missing.

Western economies, particularly that of the United States, have been built in a very calculated manner on gratification, addiction, and unnecessary spending. We spend to cheer ourselves up, to reward ourselves, to celebrate, to fix problems, to elevate our status, and to alleviate boredom.

Can you imagine what would happen if all of America stopped buying so much unnecessary fluff that doesn’t add a lot of lasting value to our lives?

The economy would collapse and never recover.

This really puts into sharp focus the problems with the ways we measure economic performance. You've probably seen the critiques of Gross Domestic Product as an index of how we're doing. I suspect most economists would agree with them. GDP is a blunt instrument that treats all economic activity as equally valuable and takes no account whatever of its possible negative consequences like societal breakdown, pollution and resource depletion. By its metrics, a man who runs a toxic "fracking" operation while going through an expensive divorce and receiving cancer treatment is "worth" far more to the economy than a preschool teacher who lives modestly and grows her own vegetables.

As far as I can tell, economists have no answer to this dilemma. They simply lack any tools to account for values like well-being, happiness, sustainability, social resilience, and so on. By definition, a society in which families own an average of 2.6 flat-screen TVs is "wealthier" than one with only 2.5 TVs. And if a country ever has a problem paying for all the things it would like, the obvious answer is "grow the economy".