Regular readers of the Kruse Kronicle will remember that I did my annual series on American Social Indicators in February. In the concluding post, I noted how the great majority of quality-of-life indicators have improved significantly over the past quarter century. Yet more than almost any other time in recent history, people seem pessimistic and anxious. I titled the concluding post "Getting Better But Feeling Worse."
Recently, I've been reading Gregg Easterbrook's The Progress Paradox: How Life Gets Better While People Feel Worse. I've only hit the first couple of chapters, but he notes the same phenomenon I did early in the book. He offers a couple of good insights.
First, he attributes this problem to "The Revolution of Satisfied Expectations." He notes that:
I suspect that we also have been transitioning from focusing on material goods to what economists call positional goods. Most goods have material and positional qualities. My house is a material good. It gives me a place to live. However, the same house is worth far less almost anywhere in the Midwest than the identical one on a Malibu beach property. You and I may have cars that do equally well getting us to places, but yours is a Lexus, and mine is a Geo Metro. Thus, while discussing two similar material items, one has qualities that make it rarer and more exclusive, therefore of status position.
A study in the New York Times shows that there is now little difference in the material goods consumed by the bottom and middle quintiles. The middle quintile only consumes about 30% more. The significant differences tend to be in housing, transportation, and food, where the middle quintile buys goods with greater positional value. The top quintile only consumes about double what the bottom quintile does, with the biggest variance seeming to be positional, not material. Competition for material goods is not a zero-sum game, while positional goods have more of that quality. With Easterbrook's "Revolution of Satisfied Expectations," I wonder if the only way many can see possible improvement is in positional goods, thus giving them dissatisfaction with their material affluence.
Easterbrook's second insight is "Collapse Anxiety." There is fear of economic collapse because people are anxious that the present economic prosperity can't be sustained or that personal freedoms in a democratic society can't endure. The relatively rapid move into higher levels of prosperity seems precarious and disorienting. Many secretly fear that it is all an aberration.
I think Easterbrook is on to something with these insights.
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