The Onslaught of Economic Materialism
November 15th 2007 11:24
When we were cavemen, if in the morning we felt a need to eat something we would probably go out and pick up some cherries or hunt a gazelle. Then we would take it into our cave, make a nice fire, roast and eat it. Life was pretty simple these days and if you had an artist’s soul you could then do some painting in the walls of the cave.
In discarded economic ways our primitive people were enjoying the utility of their economic means. This utility could be the protection provided by the cave, the abundance of the nearby hunting territory, the availability of dry wood to be used for fire, the spirituality of the cave paintings, etc.
When economics was born in the nineteen century, the use of the concept of utility was current. Then someone came up with a problem: what was utility for someone could not be utility for someone else. From this moment on economics stopped trying to measure personal satisfaction as embodied in utility to, instead, measure value: incomes, prices, rates, choice ranges and so on.
The wellbeing of today’s economies is measured by the price and number of rooms of people’s houses, by the price and engine cubic centimetres of their cars, by the level of interest rates and inflation, the range of choice when making any of the prior purchases, etc. A question I ask is whether all this represents any utility.
Ross Guittins made it perfectly clear in his last book titled Guittinomics that this kind of thinking can make you go crazy or, at least this is my interpretation of it. With an economics that measures, not satisfaction but amount, what everyone then wants is the biggest car possible, the largest home possible, the furthest away and most exotic holydays, the most exciting weekend, who knows what else. We are measuring quantities, not utility and then countries compare themselves this way. I see this as madness.
Certain things cannot be measured this way: for example, what is the money value of a peaceful and harmonious society? What is the money value of a preserved natural ecosystem? What is the money value of the infinitely blue hue of the Australian sky that I never tire of looking at? You know what I mean.
On the other hand, one of the heralded benefits of modern economies, choice, can also make you go crazy: just think of buying a new mobile phone and you will be confronted with an incredible complication of multiple plans of all kinds. Do they make your life easier?
Interestingly, Guittins also declares that one of the reasons for this economic madness of our day is the instinct of almost everyone for the acquisition of social status. We want all the great things we can buy and we want it better than the Joneses.
I wonder where we will end up, value-economically speaking.
In discarded economic ways our primitive people were enjoying the utility of their economic means. This utility could be the protection provided by the cave, the abundance of the nearby hunting territory, the availability of dry wood to be used for fire, the spirituality of the cave paintings, etc.
When economics was born in the nineteen century, the use of the concept of utility was current. Then someone came up with a problem: what was utility for someone could not be utility for someone else. From this moment on economics stopped trying to measure personal satisfaction as embodied in utility to, instead, measure value: incomes, prices, rates, choice ranges and so on.
The wellbeing of today’s economies is measured by the price and number of rooms of people’s houses, by the price and engine cubic centimetres of their cars, by the level of interest rates and inflation, the range of choice when making any of the prior purchases, etc. A question I ask is whether all this represents any utility.
Ross Guittins made it perfectly clear in his last book titled Guittinomics that this kind of thinking can make you go crazy or, at least this is my interpretation of it. With an economics that measures, not satisfaction but amount, what everyone then wants is the biggest car possible, the largest home possible, the furthest away and most exotic holydays, the most exciting weekend, who knows what else. We are measuring quantities, not utility and then countries compare themselves this way. I see this as madness.
Certain things cannot be measured this way: for example, what is the money value of a peaceful and harmonious society? What is the money value of a preserved natural ecosystem? What is the money value of the infinitely blue hue of the Australian sky that I never tire of looking at? You know what I mean.
On the other hand, one of the heralded benefits of modern economies, choice, can also make you go crazy: just think of buying a new mobile phone and you will be confronted with an incredible complication of multiple plans of all kinds. Do they make your life easier?
Interestingly, Guittins also declares that one of the reasons for this economic madness of our day is the instinct of almost everyone for the acquisition of social status. We want all the great things we can buy and we want it better than the Joneses.
I wonder where we will end up, value-economically speaking.
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