Pearls and Irritations

The continuing debate in Pearls and Irritations about economic growth and sustainability has largely ignored a critical dimension: the role of human subjectivity.

The debate has focused on the interactions between economic growth and environmental impacts. There has been some mention of living standards, wellbeing and quality of life, but little consideration of how what we think and feel about our lives can affect the relationship between the economy and the environment and help us to reconcile competing priorities and interests.

This has been a focus of my work for almost 30 years. When I was last able to poll people – in 2015 – about quality of life in Australia, taking into account social, economic and environmental conditions and trends, only 16% thought life was getting better; 35% thought it was staying about the same; and 49% thought it was getting worse.

GDP measures material wealth, but says nothing about our relationship with wealth. Economic growth does not simply and straightforwardly make us richer, so giving us the freedom to live as we wish, as economists tend to assume. Rather, it comes with an array of cultural and moral prerequisites and consequences that affects profoundly how we think of the world and ourselves, and so the choices we make. I have termed these influences the ‘psychosocial dynamics’ of progress and development.

These values include giving priority to money and what it buys, which can come at the expense of strong social, spiritual and personal relationships which lie at the heart of health and wellbeing. The economist Paul Krugman has ascribed the soaring incomes of the super-rich, which are driving rising inequality in many nations at a growing cost to wellbeing, more to an erosion of social norms than to economic forces.

Materialism, together with individualism, is a defining quality of modern Western culture. I have argued that the research literature suggests that, when taken together and too far, materialism and individualism reduce social integration, self-worth, moral clarity, and existential confidence and certainty. There is a shift from intrinsic to extrinsic values and goals; from self-transcendence to self-enhancement; from doing things for their own sake to doing things in the hope or expectation of other rewards, such as status, money and recognition. The result is an increasing focus on our own lives and an unrelenting need to make the most of life. Frustration, disappointment and failure become more likely; loneliness, anger, depression and anxiety are a greater risk.

Consumer culture has shifted its unceasing messaging beyond what we have to who we are and what we do; from the acquisition of things to the enhancement of the self. It both fosters and exploits the restless, insatiable expectation that there must be more to life. It has created a self that is socially and historically disconnected, discontented, and insecure; pursuing constant gratification and external affirmation; a self at risk of addiction, obsession and excess.

As sociologist Zygmunt Bauman has observed, today’s social ills have their source in an ‘individualised society of consumers’, with consuming more being the ‘sole road to inclusion’, and ‘existential uncertainty’ now a universal human condition. Single-issue solutions might bring temporary and partial relief, he says, but short of reforming the individualistic way of life, they will not remove the cause.

This situation not only erodes social capital and diminishes our wellbeing, contributing to people’s dismay about life and politics; the overconsumption it promotes is also a major driver of climate change and other environmental crises that confront the world. Everything is linked.

The problem with a story that defines progress in largely economic and material terms – life is getting better because we are getting richer – is that it lacks coherence. Ordinary people recognise this better than their leaders; they view their lives as a whole, they weigh up the totality of their circumstances and experiences.

Leaders evaluate performance according to a set of highly selective and imperfect measures of national wellbeing. These indicators are treated in isolation; they only make sense if there is no attempt to link and integrate measures of economic performance with those of population health and wellbeing, social cohesion and equity, and environmental health and sustainability.

We need to acknowledge better that economic growth measures progress very imperfectly, that the content of growth is more important than its rate (a point made by others in this debate), and that we need to direct economic activity away from consumption for short-term personal gratification towards long-term investment in the social transformation necessary to address all the challenges of our century and ensure our future.

These challenges are already upon us, as recent natural disasters emphatically demonstrate, but we can better prepare for them, and minimise and mitigate the costs. Confronted with the magnitude of twenty-first century crises, it is lunacy to continue to regard them as something that can be dealt with by fiddling at the margins of the economy, the main purpose of which remains to serve, and promote, our increasingly extravagant consumer lifestyle.

The apparent harm caused by materialism and individualism raises the question of why these qualities persist and even intensify. Both have conferred benefits to health and wellbeing in the past, but appear now to have passed a threshold where rising costs exceed diminishing benefits. Various forms of institutional practice encourage this cultural ‘overshoot’. Government policy gives priority to sustained economic growth but leaves the content of growth largely to individuals, whose personal consumption makes the largest contribution to economic growth.

This ever-increasing consumption is not natural or inevitable, but culturally ‘manufactured’ by a massive and growing media-marketing complex. I have cited in my work a figure from a 2003 book, The Consumer Trap: Big business marketing in American life, by Michael Dawson: big business in the United States spent over US$1 trillion a year on marketing – about twice what Americans spent annually on education, private and public, from kindergarten through graduate school. This spending included ‘macromarketing’, the management of the social environment, particularly public policy, to suit the interests of business.

While national governments have been slow to accept this truth about the relationship between economic growth and wellbeing, powerful international bodies have come a long way towards embracing it. A 2000 report by the World Bank, Quality of Growth, stresses the importance of ‘the sources and patterns of growth to development outcomes’. It questions why policy-makers continue ‘to rely so heavily, and often solely, on the pace of GDP growth as the measure of progress’. The report emphasises four crucial areas that complement and shape growth: improving access to education, protecting the environment, managing global risks and improving the quality of governance.

At the news conference to launch the report, a journalist from The Economist observed that if the report was saying that GDP did not cover all aspects of human welfare, this was obvious and nothing new; if it was saying that there were circumstances where growth in GDP should be sacrificed for other things, then this was radical. Both the World Bank’s chief economist Nick Stern and vice president and lead author of the report, Vinod Thomas, said that, in short, the latter was what the report was arguing. Thomas said: ‘Just as the quality of people’s diet, and not just the quantity of food they eat, influences their health and life expectancy, the way in which growth is generated and distributed has profound implications for people and their quality of life’.

The new century has produced a spate of such reports, and more national governments, Australia included, are beginning to take notice, increasingly framing policies and budgets on the basis of wellbeing, not just growth. As I argued in an article in Pearls and Irritations in 2018, Australia has played an important role in this development.

Nevertheless, as the debate on this site shows, the process has a long way to go.

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