a continually larger pie: In a society such as ours, in which for a substantial majority basic material needs are rather fully met,* the additional things that economic growth provides are inherently scarce; that is, their enjoyment depends on others not having the same thing. This is more than just a matter of status-seeking or conspicuous consumption. Hirsch was at pains to demonstrate that there is as well an “objective, nonpsychological” basis for the limited capacity of economic growth to make us happy.
Hirsch’s argument rests on a distinction between what he called the “material” and the “positional” economy. Goods of the first sort can increase with productivity and be of value to a wider and wider range of individuals. We needn’t take telephones away from the rich; we can make them available to everyone. But with increasing affluence, more and more of what we strive for is of the second sort, either because of physical scarcity or because of the social nature of what is sought. The automobile is to some extent a positional good. Autos bring more pleasure to the few who drive them when they are a luxury than to the vast numbers who clog the roads when “growth” has made them accessible to all. Wider availability makes possession of an auto lose some of its value for everyone; even Rollses and Mercedes get stuck in traffic jams. Ownership of a beachfront home is even more clearly positional. The number of miles of ocean front set absolute limits to the number who can own such property. Building high-rises along the beach clearly changes the nature of what one can have. If a less urban, more serene or “natural” setting is desired, then redistribution-taking exclusive ownership away from those who now possess such houses—is the only alternative. Beyond a certain point, the pie can’t get larger.
Increase in “productivity”—the standard answer to Malthusian and neo-Malthusian warnings about limits—is relevant, even if feasible, only for the material economy and for increasing production. But in the realm of consumption, Hirsch suggested, limits are “more” absolute than for production:
An acre of land used for the satiation of hunger can, in principle, be expanded two-, ten-, or a thousand-fold by technological advances.… By contrast, an acre of land used as a pleasure garden for the enjoyment of a single family can never rise above its initial productivity in that use. The family may be induced or forced to take its pleasures in another way—substitution in consumption—but to get an acre of private seclusion, an acre will always be needed.23
“Growth” solutions to the desire of all for more are limited by other constraints that are more clearly social, rather than physical, in nature. Take, for example, the role of education in providing access to better jobs. When relatively few have high school educations, attainment of one provides many opportunities. When we have managed to provide a high school education to almost everyone, the “value” of such an education in this respect goes down precisely because everyone now has one. By making it available to all we have made it of value to none.
Now, of course the value of an education resides in more than just the leg up it provides in competing for a job, and in this (extremely important) sense, the economic growth that has enabled us to afford to provide everyone with more education has indeed provided greater benefits for all. Hirsch weakened his argument by seeming at times to ignore this aspect of such “goods” as education. (Clearly he recognized the value of education, and the apparent imbalance in his argument is partly a function of his trying to argue strictly as an economist and partly of his having his tongue at least lightly touching his cheek—and perhaps of his recognition that the two may not always be entirely different.) But—especially as the “standard” credentials for competing for a good job have increasingly become not just a high school but a college diploma as well—it must be acknowledged as a sad truth that for many people education is more of a cost than a benefit. And for this rather substantial group, the effect of making education more widely available by a process of growth has been to increase the effort required to get ahead, to place greater rather than less obstacles in the path of economic advancement.
Each individual’s decision to get more education is still a rational one: He must do so to keep up with all the others who are doing so. But the total social costs (viewing education here as a cost rather than a benefit) have increased for all. Everyone must exert more effort to get to the same place. Because education (as preparation for a job, rather than as a valued end in its own right) is a “positional” good, the increased benefits of “growth” here are illusory.
Hirsch likened the effects of many of our seeming gains to those of standing on tiptoe to obtain a better view in a crowd. It works for any given individual considered separately (either giving him an advantage if he is the first, or at least helping him to equalize things if others have already done so). Clearly, his individual failure to act in this way would leave him with less benefits, and it would be irrational for him to choose not to stand on tiptoes. But, as Hirsch pointed out, if one calculates the aggregate benefit of all these individual acts, “the sum of benefits of all the actions taken together is nonetheless zero.”24 By assuming that what people are willing to spend to obtain something is a measure of its “value” to them, economists assign a value to the aggregate of all products and services by adding up these individual values. As Hirsch suggested, this sum produces quite flawed estimates of total value.*
Much of what we spend our money on doesn’t really get us ahead; it merely keeps us from falling behind. We move to the suburbs to try to escape the problems we have created in the cities, and—by the time the presumed benefits of economic growth have enabled large numbers to partake of this solution—the suburbs become transformed and take on many of the same problems. It is then time for those who can afford it to move on to a “better” suburb—until growth enables many to afford that solution too—and again to nullify it.
We are, Hirsch suggested, subject to “the tyranny of small decisions.” Given the particular choices open to us, each of us chooses in a way that we think will maximize our welfare. Yet the interacting effects of all our individual choices result in a situation that most people do not want. Our highly individualistic way of thinking about both personal and social choices does not let us pose our alternatives in a more communal way, to consider whether a joint response might result in greater welfare than the individualistic scrambling we now engage in.
Growth and the Poor
It is frequently argued—by an odd consortium of representatives of the poor and of corporate power—that calls by middle-class intellectuals to limit growth are selfish or short-sighted. Only with a growing pie, it is said, can those who have traditionally had smaller portions have their lot bettered. When uttered by those who have worked so hard to assure that some people’s slice was larger than the rest, this touching concern for the poor is somewhat suspect. When put forth by representatives of the poor themselves, this concern for growth is still, I think, misguided.
This view of growth is based on several questionable premises. The first concerns the matter of redistribution. Proponents of growth usually assume that redistribution of wealth is an unrealistic expectation. As a consequence, it appears to them that only if the total is larger can those at the bottom have more. It is interesting to note in this regard that social unrest does not seem to be quelled by growth. The 1960s were a time of high growth and great unrest—including calls not just for more but for a fairer share for those at the bottom. Simply dividing a larger pie did not yield contentment or social harmony.
It is certainly true that redistribution presents formidable political problems. But there are also grave problems in trying to improve the lot of the poor through the strategy of growth. “A rising tide lifts all vessels,” said John F. Kennedy, and in certain ways this is true. On an international scale, for the poor of the Third World, many of whom are literally starving and others of whom have little more than a full belly to distinguish them from the first group, simply having “more”—in almost any sense—would indeed be a real gain. These people live at the margins of subsistence, and anything that can be done to better their material state is to be applauded. Since their numbers are so
