Age economics’ journalist, Leon Gettler, nicely introduces the topic, below. He explores why “Most people want more income and strive for it. Yet as Western societies have become richer, their people are no happier than they were 50 years ago. In the same period, average incomes have more than doubled, we have more food and cars, bigger houses, central heating, better health, a shorter working week and more people take overseas holidays.”

Putting aside the very real difficulty that happiness is an extremely elusive quality and concept, making measurement, evaluation and comparison almost impossible, the article doesn’t really surprise, as our lived experience tells us that, by and large, the richer people we know aren’t happier than the poorer people we know (excluding, of course, the very grim reality of deep, grinding poverty), and people who have got richer through their lifetime, sometimes markedly so, don’t appear to be any happier; in fact, the opposite seems to be often the case. To use the language of the previous webpage – 3.3 – happiness seems to be largely ‘de-coupled’ from wealth/growth/consumption, so why is this so and why, then, do we pursue this path so relentlessly?

Gettler suggests that the complex psychology of the human being obstructs a nice, neat 1:1 relationship between growth/wealth and happiness through a variety of means, such as inability to focus, recall and clarify what happiness was and is, an inability to block the endless small ‘negatives’ in our lives, and the propensity to project the present onto the future. (Most important, of course, although it is not mentioned directly, is that happiness is made up largely of actions and feelings, like love, that have nothing to do with growth and consumption).

What he does touch on, most importantly, is utility, particularly declining marginal utility: “Each time we have a pleasurable experience, we adapt to it quickly so that experience yields less pleasure every time. ‘Psychologists call this habituation, economists call it declining marginal utility and the rest of us call it marriage’¹ “.

Diminishing (or ‘declining’) marginal (and total) utility can be most clearly demonstrated graphically:

It is a simple idea, or ‘law’, that we all can relate to. The horizontal axis represents units of consumption – it can be anything: water, shoes, drugs, or in this case, tacos – and the vertical axis represents ‘utility’ (unit is ‘utils’). Utility means ‘worth’, ‘happiness’, ‘value’, ‘pleasure’, ‘wants’ of humans. This ‘unit’ was originally developed by the famous and eccentric polymath Jeremy Bentham in the late 18^th and early 19^th centuries and was expounded upon by John Stuart Mill who has already been extensively mentioned in T10. Note: Bentham’s ‘extreme’ utilitarianism led him to decree that upon his death his body should be made useful to science and education by insisting that it be publicly dissected and studied and thereafter preserved as an ‘auto-icon’ (a sort of mannequin) in a glass box that is still on display at University College London. Here he is:

Back to Diminishing Marginal Utility, the graph takes, at random, an item of consumption – a taco – and plots its utility as more and more is consumed. Initially, and especially if hungry, the utility gains are high, but as each subsequent taco is consumed these gains diminish, until by, say, the fourth or fifth taco the gains have flattened out, and by the sixth, they are becoming negative (you are feeling sick). This relationship can be seen at both the individual item level, or the collective level, and I think it is particularly instructive at this latter level where we can think of growth and consumption of whole countries or groups of nations. It is not much of a stretch to position the First World at the top of the utility curve where most or all our basic needs have been met, significant utility has been gained, but now it has flattened out as no matter what we consume it adds little to our utility, and even is reducing our utility as we overcrowd, overwork and degrade our environment. By contrast, the Third or Developing World can be envisaged at the lower levels of the curve where many basic needs have not yet been met and addition of each will bring significant utility gains.

This, at first pass, gives hope that we can ‘see’ and experience limits and negative consequences, and reduce our growth and consumption accordingly. But, as a whole, we don’t – why?

Somehow, we have divorced ourselves, in the First World particularly, from Diminishing Marginal Utility and told ourselves that the graph is 1:1: upwards and linear, ad infinitum. Partly this is due to blinkered self-absorption and narcissism, whereby we separate our individual demands for more from the collective negative impact, asserting all the time: ‘what harm can it do, just a little bit more of this and that…’ We have also displaced a lot of negative collective impacts in time and space, such as climate change, to future generations to deal with, or particulate air pollution – from materials processing – to the Third World to deal with.

Additionally, and most powerfully, we now have the global religion and god telling us, literally thousands of times a day (estimates vary of between 4,000 and 10,000 advertisements/day¹ for the average American!), that growth and consumption is good, vital, necessary, meaningful; the very essence of existence. While part of our brain may tell us that we don’t need more, we really don’t want more and this excessive growth and consumption is some form of addiction ruining our society and environment; advertising, fashion and technology are telling us the precise opposite: buy the new, the shiny, the exciting, the affirming good or experience and you will be happy, successful, love and be loved, accepted, and enter into a kind of grace of consumptive self-actualisation. This has completely over-ridden the off switch of Diminishing Marginal Utility, though it lives on in shadow form in modern consumptive behaviour whereby, just like the addict, the consumer must engage in ever more desperate, excessive and hard-core consumption to gain the same utility ‘hit’. (Think obesity, bathrooms, cars, watches, drugs, phones, etc…etc…).

¹ https://www.redcrowmarketing.com/2015/09/10/many-ads-see-one-day/