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December 21, 2011

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 Luis Enrique

this is (almost) all very true - I'll happily defend mainstream utility maximising theory has the right tool for the job in many cases, but it is (obviously!) nowhere near a good description of much of our lives, and I know I am quite a long way beneath maximizing my happiness conditional on my budget constraint, in great part because I don't do enough stuff like sport or playing guitar or joining social groups, for the reasons you describe.

the bit I'm not sure about is that capitalism requires this ... I don't see why if everybody liked to spend time on hobbies, capitalism would fail - labour supply would change but so would demand for goods, afaics you could still have a functional market economy (with private ownership of the means of production) providing people with what they want in that alternative world.

 Luis Enrique

I've droned on about this in previous comments here and elsewhere, but it's not just leisure, it's work. I believe that the capitalist economy doesn't make work enjoyable enough.

What I mean is suppose I get paid £30,000 but don't enjoy my job, and would be happier with a job paying £20,000 but which brings me more happiness that I value over £10,000, I would choose that job if available, but such jobs are hard (but not impossible) to find. In theory the market ought to offer different combinations of monetary and non-monetary reward, and wages could adjust (i.e. so that furniture made by badly paid happy workers could be competitive against furniture made by better paid unhappy workers) but it does't seem to work like that in the main.

Perhaps its partly our fault for similar psychological reasons, we find it hard to accept lower pay when it would in fact make us happier.

[I recognize that some people are so badly paid that trading down to a worse paid more enjoyable job isn't really feasible.]

this book might be relevant here

http://www.amazon.co.uk/Case-Working-Your-Hands-Office/dp/0670918741

Tom Addison

So is reading a comfort or a leisure good? Depends on why you're reading I suppose

Anyway I'm off to the pub. I tell myself that this is merely practicing my social skills and therefore an investment in myself, rather than an equivalent of watching TV.

Mat

Yeah, I'm with Luis Enrique here. Totally with you on the analysis, and this being an important addition to utility maximisation. But, the last paragraph is just your priors showing through.

Even granting the assumption that total consumption would fall, if people switched too more creative activities (which isn't clear; the guy on the allotment needs supplies. Although, probably a fair assumption on balance), and that this would more than offset the benefit from increased savings/reduced rates/increased investment. There's no actual NEED for consumption expenditure to be maximized over time for capitalism to function.

Andrew

@Mat - I agree completely.

I never understand why the interests capitalism/the interests of capitalists are always conflated with consumption.

Investment in creative activities has theoretically unlimited potential for demand creation (grand pianos and tuition don't come cheap). And since when is watching tv expensive?

Additionally, investment in creative skills may in turn make the labour force more valuable.

And the idea that consumption activities per se make someone desperate for money rather than leisure time is not obviously true.

Tim Newman

"I believe that the capitalist economy doesn't make work enjoyable enough."

Compared to work in non-capitalist economies?

MrWH

With you most of the way, but I'm not so sure about the capitalism angle. Slumping in front of the TV doesn't do much for the economy, and is the easiest way to fritter time away. But becoming an expert in something -- cake making, music, wine, whatever -- almost always means that the next thing you buy will be a more expensive version of the previous thing. Every hobby has limitless amounts of paraphernalia, after all.

And since every hobby and interest has an industry to support it, so you could even argue the opposite point, and say that capitalism should make it easier for people to live fulfilling lives.

Kimberly

I thank you humbly for sharing your wisdom

Luis Enrique

Tim N

Good point. I mean I just have the sense there's something we could expect to exist - a greater emphasis on job satisfaction "paid for" by lower wages - that doesn't.

Tim Newman

Luis,

I think it does, after a certain point, and that point is different for each individual. Once you get past the point at which you are "comfortable" earning what you do, then earning more does not always become priority. My sister was en route to earning bucketloads as a laywer at Allen & Overy but decided she hated it and quit to become a freelance journalist, which she loves but it pays a pittance. And in my own case, I could earn between 30% and 50% more if I quit my staff job and became a day-rate contractor, but there are several reasons why I don't, some of which are related to job satisfaction.

But yeah, those who are not earning enough to be comfortable are not likely to quit for a lesser paying job they enjoy more. Which is hardly surprising, because there are few badly paid jobs which are enjoyable.

BeatSchindler

Agree with you 100%. The capitalist society needs consumers as slave owners used to need slaves. It's the breast sucking the child all over again. Remember, the people who used to sell us cigarettes now own and sell us food. In case you wonder why we're now so fat. Anyhoo, once you awaken you're part of a minority. The road less traveled, the price to pay. On the bright side, once you're awake you realize "Comfort" isn't all it's cracked up to be: http://bit.ly/vddl3Q
With best wishes for a Happy New Year Of Conscious Living :-] Real people need consumerism like fish need bicycles.

Farmer Jack

Douglas Coupland said sardonically that America was what he called an 'affluence-obesity equilibrium': if people got any fatter, there would be a flood of claims on health insurance and a subsequent loss of value for share- and stakeholders, while if people consumed any less, there would be a comparable loss of value in the economy's shrinking.

It makes sense to me to say that there has been an under-investment in the capacity for pleasure of the person who watches 'too much' gut TV. One can imagine the bones of a hedonic economics based not on the cash utility generated by a person's economic activities, but on stated reports of happiness. Government contributions to persons' capacity for pleasure would become the subject of an enlarged field of welfare economics. In fact, I am sure that this is how both economics and public policy will go in the West in the new century.

Btw, I am not convinced that the paper Chris Dillow cites establishes causality (just as he hints by describing how people with unstimulating but arduous jobs come home exhausted, unable to do anything but stare transfixed). Dissatisfied people are rather chained to the box.

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