This post is an expansion of comments that I’ve made in response to posts made in De Minimis. In a way, it seems odd that I would need to make this post at all. After all, everyone instinctively feels that becoming wealthier is a good thing, right? So what possible arguments might one advance to claim the opposite? There are many levels to the critique made in De Minimis, and in his defense, he appears to acknowledge that this is a train of thought that is still in the making. Still, as I understand it, the argument against economic growth falls largely into the following two groups:

1. Economic growth is bad for the environment and depletes the Earth’s finite resources in an unsustainable manner.
2. Striving for material wealth may not necessarily bring about the desired happiness and the stress and conflict this cause may actually turn out not to be worth the struggle.

The first point is valid in some ways but they are the obvious ones. Many economists have already argued that the costs of all human produced goods and services should include all externalities. Carbon taxes, which almost all economists support, for example, serve to internalize the extra costs that are incurred by releasing greenhouse gases into the atmosphere. It is after all only common sense that we correctly assign a value to the services that the environment provides so that it can properly be accounted for in our rational decision making. I’ve already written about my views on the environment in a previous post so I won’t repeat those statements.

However, I do note that the idea that the Earth has finite resources or that the human population will grow ever greater as material wealth increases to be laughable. Thomas Malthus has been the prophet of doom on this matter since the early 19th century and the end of the world has yet to arrive. Of course, the Earth has finite amounts of specific physical resources, but human ingenuity has proved time and again that it is usually possible to substitute some new resource for a previous one or else adapt society so as to make do without it. In the long run, in the face of the Sun going nova and the eventual heat death of the universe, there is an end to everything, but then to borrow a phrase often used to deride laissez-faire economists, in the long run we are all dead.

The second point is a more philosophically interesting one and De Minimis cites a short essay, Buddhist Economics by E.F. Schumacher, to provide an alternative worldview. The consumerist lifestyle with its emphasis on material goods as the basis of happiness, it is argued, is derived from the West and essentially does not work. Instead of trying to achieve greater happiness through more consumption, we are advised to instead to strive to achieve optimal consumption, to gain the maximum amount of satisfaction from the least amount of consumption. Since this results in lesser use of resources by each person, it should also lead to less strife and conflict between people. There are other points of interest raised which I do have the time to address at the moment, the Luddite idea that mechanization is sometimes undesirable for example, but I’ll have to settle for dealing with this one first.

There are at least two blatant problems here. First, the accusation that consumerism is based on cultural norms and behaviors that originated from the West and is alien to Asia is wrong. Take for example the case of the Tang Dynasty of China, as cited by my wife. Its capital Chang’an was at one point the most populous city and the greatest trading centre of the world. The sumptuous luxury enjoyed by the elite of that time is legendary and if the products of its artisans is now held up as fantastic works of art, it is only because the society was so fabulously wealthy that it could devote so much time and resources to perfect that work. They certainly did not need to learn how to live the good life and aspire to material plenty and wealth from anyone.

If anything, what the industrial revolution and capitalism really brought to the world is the democratization of this universal aspiration to wealth. Where once only a relatively narrow slice of the population had a realistic chance of enjoying any sort of luxury, now just about anybody with a decent education and a reasonable work ethic can aspire to the sort of comfortable and cosmopolitan life that would have once been unimaginable.

Two, the call for optimal consumption ignores how free markets work and doesn’t stand up to scrutiny. By shopping around for the best deals, getting the best possible products and services for the least amount of money, people are already optimizing their consumption. Obviously, the “optimum” meant here is based on some metric other than cost, perhaps derived from what the proponents of the idea think that people ought to value rather than what they actually do value. Therein lies the rub of the problem between De Minimis and myself.

As a proponent of the free market, I trust people to make purchasing decision for themselves based on their individual, subjective judgment of what is or isn’t valuable to them. I don’t feel that it is my place to tell anyone else where and how to get their happiness. De Minimis’ proposals on the other hand smack of the Marxists’ ideas that people generally don’t know what is best for themselves and can’t be trusted to act in their own best interests. Therefore, they must be educated and “guided” to act according to what is best, as determined perhaps a ruling coterie of scholars and wisemen. As I posted in his blog, utopian plans of this sort that seek to overthrow the existing world order never work. We should know better by now about the follies of taking a road paved with good intentions.

Finally, it is one thing to argue against economic growth in the abstract, and another to argue against the tangible benefits of economic growth. Wealth isn’t just about numbers on paper or in a computer system, it’s about actual products and services. Material wealth means that I can have McDonald’s for breakfast, sushi for lunch and pasta for dinner if I wanted to. It means that I can afford to go on a short leisure trip to Penang during the coming Chinese New Year and perhaps to Korea or Japan for holidays in May. It means that I’m able to buy a cutting edge PC and the games to play on it, games that the result of the collaborative effort of many talented people working hard for a year or more.

De Minimis seems to believe that that I would be happier if I gave all that up and lived a simple agrarian existence, content to live and die in the same village without knowing any of the wonders and creations of the world beyond. I think I prefer to choose for myself.