Monday, August 16, 2010

Merle is Double Dippin'

Check out Merle Hazard's latest, Double Dippin'.  Merele, once again has the catchiest take on our current economic woes, and he fears a double dip recession.  And, alas, while we are double dippin', our social fabric is rippin'.

Let Them Buy Cake

Mark Zandi, chief economist at Moody's Analytics, writes in an opinion piece in the 15 August New York Times ("The Tax Cut We Can Afford") that since the top 3% of U.S. household income earners account for 25% of consumer spending, we should not spook them now by letting the Bush tax cuts expire.  We need them to keep spending to keep the economy going.

This is a surprising argument.  The traditional case for tax cuts for high income earners is that they will use their money to invest in productive activities-creating more jobs and more wealth to spread around (or trickle down).

But here Zandi asserts that we need the wealthy's spending to keep the consumer economy on the road to recovery.

It would seem that whatever they do with the money saved from taxes (spend it or invest it), we need the wealthy to be wealthy.  This would suggest that the dramatic tend in extreme concentration of wealth and income in the upper 1% and 5% of households (greater than any times since 1928) is healthy.

But is it really economically and socially healthy or sustainable to be so dependent on such a small (and fickle) class of people?  Bob Frank, for example, has written on the positional goods arms race that emerges from such situations of inequality and aspiration.  Making money is well and good--I wouldn't mind making more myself--but extreme inequality tears at the social fabric that gives the good life meaning.

Less Choice, More Happiness

In previous posts and elsewhere, I have made the case that in certain contexts, limiting choices may improve individuals' overall wellbeing.  This is somewhat counter-intuitive-less choice making one happier-but it is in line with a number of recent studies in behavioral economics.  We may in fact want limits on our choices to help us pursue long-term goals that are vulnerable to being thwarted by short-term temptations.

Ron Lieber (writing in the 14 August New York Times) looks at MasterCard's new "inControl" service.  This allows customers to set spending limits on your card or restrict charges from certain sorts of vendors.  Lieber is "convinced that the ability to cut yourself off from certain kinds of spending will become a standard card feature sooner rather than later."

Another case of less choice leader to a more fulfilled ("happier") life.

Thursday, August 12, 2010

Desires, Aspirational Capabilities, and the Missing Dimensions of Poverty

In thinking about the multiple dimensions of poverty and wellbeing, we should not underestimate the role of aspirations and desires.  Often there is an implicit distinction between the "desires" of the developed world (us) and the "needs" of the rest (Them), and this can seduce us into an easy and well-intentioned paternalism that discounts the dreams, hopes, and aspirations that motivate and orient long-term thinking, even among the poor.

This is not to say that material poverty doesn't matter.  It does, and the crushing material conditions of lived poverty shape the options and capabilities open to the poor.  But, as my friend Bart Victor always reminds me, "the poor" are not singular, as much as we may talk about them as such ("what we need to do to help the poor is . . . "); the poor are different not just from you and me but from each other as well, and poverty is always experienced in myriad quotidian and local ways.  And, even those suffering the worst sorts of absolute poverty say that they don't want their children to be poor-they dream of something more, something better for them, however that "better" might be defined.          

This speaks to the aspirations and desires that fuel self-determination.  It is odd, as Arjun Appadurai (2004) points out, that so much of anthropology defines "culture" in terms of the past when the folks we interact with are just as eager to talk about the future.  Appadurai outlines a "capacity to aspire" that provides a sort of dynamic metapreference structure for individual choices; it is a "navigational capacity" that orients horizons of desire and visions of alternative futures.  And the capacity to aspire is diminished, Appadurai argues, in conditions of poverty.

Appadurai characteristically does us a great service, giving us a conceptual language to think about local desires in the context of international development.  In fleshing out that project, we should stress the verdant landscape of desires and aspirations that do exist, even among the poor.  In Broccoli and Desire, Pete Benson and I make the case for taking seriously Maya farmers' desires for the future, even when those are at odds with our own distant moral projects.  Taking a capabilities approach, after all, means giving up some power, opening the possibility that those we seek to help will make choices we may see as counter-productive other otherwise "bad."

Debraj Ray (2006) important work notes that "poverty stifles dreams, or at least the process of attaining dreams."  She introduces the concepts of the "aspirations window" and the "aspirations gap," both explicitly defined socially in terms of relative standing to and relations with those with whom one interacts.

The role of aspirations and desires are seen clearly in times of boom and bust.  James Ferguson (1999), in a powerful account of the aftermath of the copper boom in Zambia, shows how expectations of a particular modernity had become important, internalized motivational forces; the aspirations window of ordinary Zambians opened wide and provided new points of reference for dreams of the future.  After the bust, these dreams became unviable, and new outlooks, disconnected from the modernist aspirations of the global ecumene, emerged: the material conditions shaping the form and limiting the range of aspirational capabilities.

Turning to another corner of the southern hemisphere, take the case of Maya farmers in Guatemala growing broccoli and snow peas for export to the United States.  Some argue that Maya farmers need to focus on subsistence production, growing corn and beans to ensure their own food security.  And there is good reason for such concerns.  But, talking to Maya farmers we hear a different vision of their future, one unironically modern.  Farming is hard work-something we sometimes forget from our distant studies-and Maya farmers want algo más (something more, something better) for themselves and their children.  They see export agriculture as the risky business that it is (fragile crops, fickle markets), but they also see in it hope for a better future for their kids.

In contrast to the methodological individualism of much of neoclassical economics, a notion of "desires" and "aspirations" should see them as shaped by collective experiences, cultural images, and political economic structures.  As Pete Benson and I have written, desires move individuals to take up stakes in certain activities that are compelling because they embody moral, economic, or symbolic values. As such, desires are specific to local worlds, which are themselves part of larger systems of production and affected by large-scale processes.

In this way, desires and aspirations form a key "capability" in the Senian sense.  Sabina Alkire, James Foster, and others at the Oxford Poverty and Human Development Initiative (OPHI) have developed an innovative framework that incorporates the "missing dimensions" of poverty: employment, physical safety, the ability to go about without shame, agency, and subjective wellbeing.  While agency and wellbeing capture certain aspects of an aspirational capability, there is value in treating aspiration as a capability in its own right, mutually constitutive with agency, for example, rather than subsumed to it. 

Tuesday, August 10, 2010

German Leisure and Missing Dimensions of Poverty (and Affluence)

Thomas Geoghegan, writing in the New York Times blog, writes of the German system that values leisure time (in relation to work) more highly than we find in the U.S.  Here, and in a recent Harper's article and presumably in his new book (which I have only just ordered), Geoghegan makes a case similar to the one I outline in the posts below-rethinking the values of the European system.  (Indeed, reading his work, I have that sinking feeling that comes when one thinks he has a clever, original idea only to find that it has already been done, and more eloquently.)

In the NY Times exchange, Peter Baldwin takes issue with the figures Geoghegan uses.  But, the fact remains that Germans work significantly less than Americans, and they work differently.  There is a clearer division among the professional classes, for example, between work and leisure, and one that is not lightly violated.  And, as the commentator Panicalep noted on the NY Times blog, Germans tend to work the hours that they do more efficiently and productively.

Baldwin is certainly correct when he writes about women in the German workforce: for the most part, Germany is not a women-friendly work environment.  This is not so much because of sexual harassment and old boys networks (if both are surely present, as they are here), but because of structural constraints.  Indeed, Germany companies are working hard to correct executive gender imbalances from a demand side.  But supply still lags due largely to lack of childcare, short school hours, and a cultural notion of proper motherhood.

All in all, I find the German system better promotes overall wellbeing even given all its problems.  This is to some degree subjective, my preference for a certain leisure/work balance.  But we find it in more objective measures as well.  Take life expectancy: the Germans born today are expected to live about 1.5 years more than Americans.  They smoke and drink more, and still live longer.

Speaking of "wellbeing" calls to mind recent innovative approaches in measuring poverty (and affluence) that go beyond GPD per head or absolute income. Inspired by the work of Amartya Sen, Sabina Alkire, James Foster, and the folks at the Oxford Poverty and Human Development Initiative (OPHI) are promoting holistic, integrated measures that take into account what they call the "missing dimensions of poverty."  These include agency, employment, physical safety, the ability of go about without shame, and psychological and subjective wellbeing.  Now, the danger is such holistic approaches is that they can minimize the importance of material conditions ("sure, they are poor, but they are happy, rich in so many other ways).  But the Alkire/Foster OPHI approach recognizes the role of absolute poverty while also accounting for these other elements (which, in fact, often directly impact material conditions).

A recent article in The Economist illustrates some of the OPHI's surprising results (which will form a key part of the UNDP's 2010 Human Development Report).

See also the debate between Sabina Alkire and Martin Ravallion (of the World Bank) at the OXFAM "From Poverty To Power" blog.  And James Foster's intervention at this World Bank blog.

It seems clear that we need to account for multiple dimensions of poverty to fully understand it--and to create policies and programs that can create the greatest good in terms of overall wellbeing.

It also occurs that another missing dimension of poverty has to do with the desires and aspirations of the folks we seek to help.  Pete Benson and I, in our book Broccoli and Desire, argue that we must take Maya farmers' desires (as well as needs) into account.  Maya subsistence farmers have clear aspirations for themselves and their children.  And, for the most part, they don't want their kids to be subsistence farmers--they would like for them have have a better life, algo más, however "better" may be defined.  It is precisely such aspirations for something more or something better that drive the capabilities Sen and Alkire and Foster rightly see as being central to leading a fulfilled life.