The toll of American materialism

On The Bay

Book: An economist says the secret to a content life doesn't lie in acquiring luxury items.

January 11, 2002|By Tom Horton | Tom Horton,SUN STAFF

WE'VE ALL heard the old saw, "If you're so smart, why ain't you rich?"

But the salient question is just the opposite - if we're such a rich society, why aren't we smarter about allocating our wealth?

That's the premise of Cornell economist Robert Frank's Luxury Fever, a good book I almost didn't read -because I didn't need another screed about what hideous over-consumers we have become.

For the record, Americans are 5 percent of Earth's population, consuming about 30 percent of the Earth's nonrenewable natural resources.

If global trade actually enabled the other 95 percent of the world to live the American dream, we'd need another five or so Earths to support it.

Frank dutifully covers this ground, chronicling the upsurge in $20,000 wristwatches, $10,000 barbecue grills, cosmetic surgeries, McMansions sprawling over the countryside and behemoth, polluting SUVs for trips to the supermarket.

Spending on luxury items, he reports, has been rising four times as fast as overall spending. Meantime, debt and bankruptcy are up, savings are down, and there is at least the perception that we're more overworked, more stressed and have less time for friends and family than ever.

So why do we do it?

Is it as libertarian author Robert Twitchell writes in The Triumph of American Materialism?

"Consumerism is not against our better judgment. It is our better judgment. We have not just asked to go this way, we have demanded. Woe to the government or religion that says no."

Analyzing such facile and widely accepted assertions is where Frank shines. He might concede Twitchell's conclusions are hard to deny, based on current individual lifestyles.

But Luxury Fever's author builds a compelling case that consumption that "is smart for one may be dumb for all," that "the choices of rational, well-informed people do not always add up to a whole that meets their approval."

It's reminiscent of biologist Garrett Hardin's "Tragedy of the Commons" essay, wherein sheepherders grazing their flocks on a common pasture individually find it makes sense to each add a few more sheep, a move that collectively ends up ruining the commons.(Or think of watermen and sportfishermen pursuing crabs and oysters and striped bass in the Chesapeake Bay, absent any fishing regulations.)

Frank marshals a host of studies going back a half-century that all point to the same conclusion. Past a certain point, one most Americans reached decades ago, "more material increases produce virtually no measurable gains in our psychological or physical well being."

As national income has soared, about the same percentage of us say we're as happy now as 50 years ago.

But we could be happier, or at least have a better society, with no loss of happiness. Frank points to other studies that show we would all like less traffic congestion, cleaner air, more affordable health care, more time with families, better schools, more preservation of open space.

It's all eminently affordable if we scaled back on luxury spending that scarcely relates to our happiness. Indeed, it is the endless pursuit of bigger, more and better that exacerbates so many of our natural resource problems.

So why do we do it? Why, if we're so rich, do we seem to keep moving, dumbly, even further from a balanced society?

Frank's answer reminded me of older women I once interviewed; they grew up in an isolated watermen's community in the bay. Their lives to me seemed hard and sparse, but the most common assessment the women gave was, "I was content."

They did not say they were happy. They said they were content - life had gone according to the limited expectations they grew up with, similar to the lives of their peers.

It is all relative - wealth and luxury have little to do with absolute possessions, Frank demonstrates. Drawing on everything from evolutionary biology to psychological research, he shows how our satisfaction has everything to do with how we perceive ourselves relative to others in our society.

Thus the title, Luxury Fever. Today's conspicuous consumption is, he argues, literally "catching."

"Consumption spending has much in common with a contagious illness ... and economists who insist otherwise will someday be categorized with physicians who failed to acknowledge the germ theory of disease," he writes.

If material satisfaction is mostly a relative concept, then it follows that scaling consumption down would be perceived as no great sacrifice as long as the reduction was societal, and not individual.

That leads Frank to his solution, which would start with a one-line change in the federal tax code to exempt all savings (including stocks, 401(k)s and the like) from income taxation.

The income tax would then tax only consumption, across the board (Frank thinks specific "luxury taxes" are too hard to define and implement). A steeply progressive tax rate would curtail high-end spenders and not overburden poorer ones.

The "trillions" of dollars diverted from conspicuous consumption could go to improve human welfare.

I'm not qualified to analyze Frank's consumption tax, but he's got the right idea.

Anyone who wonders at so much discontent in the world today need look no further than the growing disparities in consumption between its richest and poorest citizens.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.