The dilemma of Anglo-American affluence

Contemporary Review, Spring, 2007 by Albert Hobson

The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950. Avner Offer. Oxford University Press. [pounds sterling]30.00. xviii 454 pages. ISBN 0-19-820853-7.

Thinkers and writers have been interested in the penumbra of economics--sociology and psychology, mainly--for a very long time. Beyond David Hume and Adam Smith, one finds Locke, Mandeville and Hobbes, all concerned with the question 'that agreed, what is it all for?' Does affluence make for happiness, or does the fact that most people only eat one dinner, wear one set of clothes, or only sleep in one bed at a time mean that there is a point at which the accumulation of things loses its point? The well-named Professor Offer is the latest in the group of scholars, beginning with Durkheim, who have been trying to measure what economic growth does and to put quantities to its impact on people. The author's very first sentence hits one large nail on the head: 'Affluence breeds impatience, and impatience undermines well-being'. Impatience as a mass condition is very much a modern thing: historically, it has been confined to kings and such-like. The placard reading 'When do we want it? We want it now!' wasn't seen, even as late as 1968.

Avner Offer's statistical analysis of quality is thoroughly well-researched and refers to pretty well every serious piece of work that has been done, from the United Nations in 1954 onwards. His own intellectual apparatus combines careful and not very critical reporting with a refreshingly sardonic attitude to a lot of received wisdom: he thinks history is not very useful because historians proceed from one intractable dilemma to the next, without any general theory to speak of. (One wonders if, perhaps, his reading in history has not been as wide as all that.) But he is magnificently dismissive of the fundamental underpinning of economic theory, from Adam Smith onwards, the 'hidden hand' showing itself in the behaviour of markets. 'In reality, the invisible hand remains what it was to begin with, an article of faith'. The 'hidden hand' depends on rational, consistent consumers, and lots of them. In fact, the winds of fad and fashion blow where they list.

After a thorough, exhaustive survey of the statistical basis, the author turns to some case studies. The most interesting and illuminating of these is the American automobile industry, its fashions and the interplay between it and its customers; this reviewer has never read a better, two-page summary of the tragicomedy that was the Edsel, or, indeed, a better account of the styling frenzy of the 1950s which was meant to make cars look as though they were going at eighty while they were parked.

In his conclusions, Professor Offer moves with the times. He realistically observes that in affluent societies (and probably in others) the accepted economic doctrines are those which suit the powerful, i.e. belief in competition suits a world in which the educated and rich are well placed to win. One wonders, nonetheless, if there is the start of a general trend away from excessive consumption, in such contributions as David Cameron's call for an index, not of Gross National Product, but of General Well-Being. This is in line with Avner Offer's own feeling, that we have chosen 'choice' when we might have kept that nineteenth-century value, 'moderation'. For every Mr Micawber, living on the edge, there was a business or professional man who as a matter of course saved half his income. Of course, it was easier then, with virtually no inflation (except when a new gold field was discovered): a pound put aside in 1850 would buy much the same in 1890 if not slightly more. There is no entry for 'inflation' in Professor Offer's index, and this is, one feels, a weakness. He is, however, very relevant when he points to longevity and the need to think about inter-generational transfers of funds over a period, and on a scale, about which classical economics has nothing to say.

On the whole, this is a useful, serious and thorough book which postgraduates and third years should know about, though they will probably have to have several goes at it.