Reviewed by Randy Rosenthal
According to Adam Smith and John Maynard Keynes, the goal of capitalism is that it can enable society to achieve a certain level of material productivity where everybody can have enough, allowing individuals to work fewer hours while increasing their quality of life. Judging by contemporary circumstances, almost the opposite is true; we’re overworked and we always want more. Where did economists and governments go wrong, and how can we get back on the right track? These two questions are the subject of the Skidelsky’s book, How Much is Enough? The book reads as both an economics and philosophical text, in that it aims to define what it means to have “the good life,” and explores why we don’t seem to have it, even though we’re making more money that ever before.
First, the authors make the distinction between leisure and relaxation. If the goal of capitalism is for everyone in society to only have to work four hours a week, this does not mean that everyone should spend the rest of their time watching television, drinking, and laying on the beach. This is not leisure. Neither is watching sports or going on Facebook. Leisure, the Skidelskys say, is performing a creative and productive, regardless of financial compensation. For example, leisure is writing a novel, or doing scientific experiments, or making a painting, or playing chess, or even reading literature. The authors explain that our misunderstanding the true meaning of leisure is partly the cause of our over-worked society, since most people fear boredom; they don’t know how to productively spend their spare time, and don’t think highly of themselves outside their work environment. The result is that most people would rather work even when it is theoretically unnecessary to do so. This is how we end up with a situation where “the poor work less than they want to, and the rich work more than they need to.”
The root cause of where we went wrong is the idea of making money simply for the sake of making money, which is an ideological aberration in history. The error is in measuring the worth of a nation by the growth of the economy; the Skidelskys try to prove that—beyond a certain level of sustenance—there is no correlation between quality of life and per capita income, nor is there a relation between happiness and gross domestic product. In other words, what economists measure has little importance.
Much of How Much is Enough? is unusual for an economics book; one chapter is devoted to explaining the half-forgotten ideologies of pre-modern philosophers whose ideas have shaped both Western and Eastern cultural values. All religious figures and traditions held the pursuit of money as a scornful endeavor not worthy of our time, or they viewed money making ambiguously as merely a means to an end. The authors describe the ideals of the ancient Greek philosophers (the book is packed with quotes from Aristotle), the ethical traditions of ancient India and China, and—in a brilliant analogy for the capitalist system—they explain the Faust legend in detail, where Doctor Faustus bargains with the Devil in order to attain special powers.
Adam Smith himself acknowledged that capitalism was an “overthrow of the classical schemes of virtue and vices,” which released the traditional sins of avarice in order to benefit society. In what Smith described as a “bargain with evil,” the sin of greed was transformed into the rational trait of “self-interest.” Rather than suppressing the baser instincts of human beings, capitalism attempted to sublimate those instincts into serving society. Unfortunately, the result is that people now only serve themselves, and society operates in a way that forces people participate in the perpetual chasing of growth and consumption, without any sense of satisfaction or satiation. This was not the point. Smith, along with all classical economists, never talked of “growth” but rather of “improvement” of societies and nations. They always had an end in mind, a “stationary state” without further improvement, similar to Marx’s final economic state of communism, where everyone would have enough and everyone would be able to live the good life.
After their analysis of classical models of ethics and economic theory, the authors dive into the field of “happiness economics.” The “happiness index” of every developed nation has remained constant over the past thirty years, even though GDPs have tripled, showing that there is no relationship between economic growth and happiness. Sure, poor nations without basic facilities that provide services and sanitation have a lower happiness index, but after a certain level of development, research shows that wealth no longer affects happiness. In this sense, stock traders and investment bankers accumulating massive amounts of wealth can only be seen as neurotic, if not pathological. All the wisdom of the world says that money is a means for the good life, not a goal in itself.
But what is “the good life”? Isn’t “good” a subjective idea that differs between cultures and individuals? Defining the universal “good life” and creating an economic plan to implement it is the main focus of the rest of the book.
Being very cautious to show their economic plan would not be coercive, chauvinistic, or paternalistic—that it respects free choice and individual taste— the authors outline the necessary elements that make up the good life. The first step in understanding the good life is clarifying the difference between need and want. Our wants are endless, but our needs are actually few, and easily achievable at that. It is basic needs that governments are responsible to provide, and for which capitalism is needed; after that, economic growth needs to stop. The Skidelskys determine that health, security, respect, personality, friendship (community), and leisure are the elements that humans require in order to be happy. Without these elements, we can’t be happy and live a good life, no matter how rich we are.
There are some problems with the authors’ analysis, though. First, economic policy seems to be out of the hands of writers like the Skidelskys. It’s lamentable that though we might have the solutions to all our societal problems, these solutions will never be implemented by politicians, who are at the mercy of their largest campaign contributors. The fact is that economic systems do not arise from economic theory; theory merely justifies a system that is already in place. Power is what creates systems; Europe did not transform from a feudal to a capitalist system of production due to theory, but because the bourgeoisie merchants and professionals had accumulated wealth and power. Second, the Skidelskys often talk about the rich countries and the poor countries, a duality that becomes non-existent when one looks at the number of homeless poor in the wealthiest countries, and the number of super wealthy citizens of the poorest countries. No, the problem is deeper, and the authors nail it perfectly when they write that the root of the problem is “the moral decay at the core of our system.”
This moral decay is why we work so much, even though we don’t have to, and why we all aren’t living the good life, even though we can.