21. Greed?

Ch 21

Maximising versus satisficing our wants – the problem of greed

Greed is one of the drivers of the situation we are in.  In the movie “Wall Street”, Gordon Gecko famously pronounced “greed is good…[it] captures the essence of the evolutionary spirit”[i].  Greed is perfect social Darwinism.  While Gordon might have gotten his come-uppance (largely because of those Hollywood liberals), he was only rephrasing one of the maxims of neoclassical and neoliberal economist Milton Friedman, who published a seminal paper in 1970 entitled “The social responsibility of business is to increase its profits”.

E.F. Schumacher put it pungently in “Small is Beautiful”:

“If greed were not the master of modern man – ably assisted by envy – how could it be that the frenzy of economism does not abate as higher ‘standards of living’ are attained, and that it is precisely the richest societies which pursue their economic advantage with the greatest ruthlessness?”[ii]

Greed has become “the master of modern man”.  It has been institutionalised and sold as a virtue by the American dream of conspicuous consumption and wealth, supported by the strange belief that “growth is good”, and by corporate salesmanship through advertising.

Growth in GDP is seen in political circles as more important than any other economic indicator.  To the extent that it enables all citizens to reach a state of wealth and income that offers them a life of basic dignity, I cannot argue with it.  But, in the affluent world, GDP growth largely means more unnecessary consumption of luxury goods and/or unreasonable quantities of resources.  It is sold as an “economic necessity” by neoclassical economists, because their market-driven model would collapse under its own inconsistencies if we gave growth up.  In the natural world, growth of this sort is called “cancer”.

Advertising’s job is to sell product.  And it does this by appealing to our instincts and emotions, for example our vanity, our wish to “keep up with the Jones’s”, and our fears.  It doesn’t often appeal directly to our greed.  But my point here is that it helps us to act greedily, without consideration of the real effects of what we are doing.

Here’s the good news.  We’re actually not that greedy as a species.  There have been and always will be greedy people.  But, by and large, most of us are “satisficers” of our wants rather than “maximisers”.  In the absence of other drivers, we would be content with “enough to get by on” – this is what “satisficing” means.

There are numerous useful illustrations of this fact.  For example, a famous 1997 study of New York taxi drivers showed that many of them worked just enough to reach an income target for the day[iii].  And many studies of work motivation show that most of us above subsistence level are more motivated by doing a good and useful job than by wage increases or bonuses.

Many studies have shown that human happiness does not improve much beyond a certain, not very high income (by affluent society standards, that is).  For example, Diener and Seligman reported in 2004 that, beyond national GDP-per-capita of $10,000 (which is about the current world average income), there was virtually no correlation between income and life satisfaction.  They went further and said that indicators of “ill-being” (depression, loss of trust, stress) had increased[iv].  Diener actually said that “Materialism is toxic for happiness”.

Many countries and groupings are now trying to go “Beyond GDP” in their measurement of what constitutes an effective and stable society.  The Kingdom of Bhutan has led the way with its measurement of “Gross National Happiness”, and the OECD now regards “improving well-being” as the core foundation of its work[v].  There are many initiatives now trying to measure social progress rather than economic growth.

A recent initiative shows a “social progress index” flattening at about the current level of world GDP, and likely improvement of only 1.4% by 2030, despite a projected growth of 65% in world GDP[vi].  Yet some countries are well above the average, because they have pursued investment-type goals such as education and the environment rather than consumption-type goals such as economic growth.  Real gains will only be made by changing goals and systems, not by the pursuit of material growth.

My friend Neil Potter told me the story of “the Mexican Fisherman” [vii].  In short, an American investment banker sees a Mexican fisherman docking his boat with a small catch, which turns out to be enough to meet his family’s immediate needs, leaving him much of the day to spend with his family, his friends, and his other leisure activities.  The American says to him that, if he spent more of his time fishing, he could buy a bigger boat, then maybe a fleet, then maybe move to a bigger city, and maybe sell his empire after 15-20 years and make millions.  So that he would then have time to spend with his family, his friends, and his other leisure activities.  It’s much better told in the original, but I’m sure you get the point.

The Mexican fisherman is a “satisficer” of his wants, the American banker a “maximiser”.  And which of them is the better advocate?

So the problem of greed is not that we’re all deeply greedy.  It’s that the pursuit of individual material wealth has been turned into a virtue in modern affluent societies, led by the United States, and driven by the relentless corporate pursuit of profit.  And it has helped many of us lose sight of the possibility of “satisficing” our material needs, rather than maximising our wealth.

Don’t misunderstand me.  I’m not saying that the many people in affluent society who are struggling to make ends meet should be happy with their lot.  I’m saying that those of us who aren’t are mostly overconsuming, and setting a lousy example of affluent consumption.  If we were all struggling together, it would be easier on all of us.

Many cultures and groups (mostly called “indigenous” these days) are, or have been, satisficing cultures.  They live more in balance with nature, and depend on fewer material goods, than our modern affluent societies.

And yes, many of them are rural and dirt poor.  But I am certain that the poverty of many of them has been increased by the thefts of resources, land, people and clean air that I have referred to above, and which were the foundation of our modern affluent societies.  The wealth we have built on their backs needs to be shared with them again, more evenly, in ways which enable them to continue to operate as satisficing cultures.  And they in turn could teach us much about how we might return to a satisficing way of living.

One possible objection raised to all this is that, in a satisficing culture, there would be no incentives to generate additional wealth to share with others.  David Graeber[viii] gives an interesting variation on this idea in describing what I call a “radius of selflessness” – that people’s willingness to provide, and to share, reduces as they move beyond themselves and their immediate family.

My rebuttal is that people are, by and large, intrinsically motivated to contribute.  Having once provided enough for themselves (and their families), their further contributions are most likely to be based on what they themselves value, whether this is craftsmanship, or cultural activity, or just social behaviour.  This would be a far better form of “surplus wealth” than the exploitative, production-line form of surplus material wealth currently being generated and selfishly consumed.

It is clear that our dominant consumption-based, maximising culture could only operate successfully in a world without limits, where resources were infinite.  Which it does not.

The world will always have some greedy people.  And some of them may even bring social benefits through the innovations they pursue.  But a society which emphasised satisficing its wants rather than maximising them would be able, more or less, to have these behaviours in control, or better directed.

If it knew how to handle power effectively.

Read on, about “The problem of power…”>>
Back to the Manifesto>>

[i] In the movie “Wall Street”

[ii] “Small is Beautiful”, page 23, Loc 465

[iii] http://qje.oxfordjournals.org/content/112/2/407.short

[iv] Ed Diener and Martin E.P. Seligman, “Beyond Money: Toward an Economy of Wellbeing”, 2004

[v] See for example OECD report on “Transforming policy, changing lives” forum, Oct 2015, page 3

[vi] See Michael Green’s TED-talk “How we can make the world a better place by 2030”, September 2015

[vii] http://bemorewithless.com/the-story-of-the-mexican-fisherman/

[viii] In “Debt – Updated and Expanded: The First 5,000 Years”, David Graeber, Melvill House, 2012, see for example Kindle edn loc 2333ff