Arthur Demarest, professor of archaeology at Vanderbilt and a student of the collapse of civilizations, says that in looking at our own
society: "we are in trouble."
Arthur
points out that the failure rate for great civilizations is 100%. It is a question not of “if” but when. He says that an "ideology of long-term thinking and lower expectations — a change in
world 'attitude'— seems to me to be the only way out of the 21st century giant and precarious 'bubble' that now is Western civilization."
The end of the year is always a time of reflection of what we have done and what we have left undone. And, of course, it’s time to start thinking about those resolutions for 2015 and what we will do differently.
Our New Year’s resolutions usually target minor vices – eat fewer snacks, drink less, stop smoking, exercise more – whatever your particular self-admonitions may be. But it is too easy to get lost in the particulars – and in the negatives.
In setting out our resolutions, we should first step back and take stock of what it is that we really want, what we consider the good life to be, and then think about how best we might achieve it.
Well-being is more than just being well
Fellow anthropologist Arjun Appadurai encourages us to be driven by an “ethics of possibility” – hope, aspiration, optimism – and not just the “ethics of probability” – costs and benefits, risk management, and systematized rationalities. We can be pragmatic, but let’s not allow that pragmatism to kill our dreams of how things could be better.
I’ve spent the last few years studying what contributes to the good life – the elements of well-being – for folks around the world. I’ve talked to rural Maya coffee farmers in Guatemala and urban supermarket shoppers in Germany, as well as Americans from all walks of life. I’ve looked at notions of well-being in Mozambique, Brazil and China. I found that income is important, but not as important as we might first think. Health and security are also necessary, but insufficient, for living a fulfilled life.
Well-being, it turns out, is about more than just being well. It also requires strong family and social relations, a sense of dignity in our lives and fairness in our opportunities, and commitments to larger purposes.
For example Miguel, a 43-year-old Maya coffee farmer in Huehuetenango, Guatemala, I met during my research has benefited in recent years from the boom in high-end coffee in the US. He says that life is good right now – even if we might characterize his circumstances as extremely impoverished. He finds a dignity in owning his own land, in growing quality coffee that commands a decent price. He is committed to providing his children with more opportunities in life, and that endows his hard labor with a larger purpose.
Such large purposes may take many different forms. German shoppers who buy organic and fair trade products see this as a way of linking consumption to moral projects of ecological stewardship and social solidarity. Mastering a craft, political activism, even religious extremism – all are ways we give larger meaning to life.
Based on this research, there are some lessons to take away for our New Year’s resolutions. First, we need to ask what is really important in our lives – and how we can align what we do with those values. Then we should commit, or recommit, ourselves to larger purposes that go beyond self-interest. These could be grand (changing jobs to something more meaningful) or modest (cooking more meals at home for the family) — the crucial thing is that they are about more than just getting ahead.
Good experiences make good memories.Maxim Zmeyev/Reuters
Lessons for a happy New Year
In fact, sometimes being less productive economically can make us better off in terms of wellbeing. Filipe Campante and David Yanagizawa-Drott found that in Muslim countries the fasting and observances during Ramadan had a negative impact on GDP growth, but that individuals also reported being happier and more satisfied with their lives. Giving something up for a greater good – and just giving more broadly – is deeply rewarding.
Second, we should be generous with the time we invest in family and social relations. Material goods usually bring only fleeting happiness, and yet we often pin our hopes and dreams on the accumulation of things we hope will make us happy. Focusing on relationships and experiences adds much more to our long term long-term life satisfaction. Across cultures, we find that strong social relations and the amount of time spent with family are very good predictors of overall wellbeing.
For many in the US, this means adjusting our work/life balance. In Germany, there is a clear distinction between work and play. Germans are more productive than Americans when at work, but they also work less and guard their time off. At Volkswagen, managers have demanded that Blackberry servers be turned off after working hours so that they will not be expected (or tempted) to respond on their own time. Americans spend much more time at work than in many other industrialized countries – around 1800 hours per year on average, compared to around 1400 hours for Germans. In 1930 John Maynard Keynes famously predicted that by now productivity would be so high, the average work week would be only 15 hours. And yet our material wants have outpaced even our dramatic productivity gains.
Finally, we should take time to step back from our culture of busy-ness and getting ahead to appreciate what we already have. It may be human nature to want more, but the good life also rests on gratitude and purpose.
I heard psychologist Dacher Keltner, a founder of the Greater Good Science Center at UC Berkeley, on the radio this morning calling for more gratitude as a counterweight to the materialism of the season.The work of Keltner and others has shown that gratitude is closely associated with health and overall wellbeing.
The value in gratitude for our sense of self is related to the sorts of positional consumption arms races that Bob Frank has written about. (The value of "positional goods" owes more to their scarcity and social identity aspects than to their material properties: the real utility of that $3000 Birkin handbag (to carry stuff around) is about the same as a plastic shopping bag.) We adapt to new material circumstances quickly and then aspire to more. When I started my career, my imagined dream position was where I am now; and yet, in arriving here, my dreams and aspirations have changed and expanded so that I still fell as if I am missing something in my life.
Such aspiration is important, gives meaning and direction and energy to our lives (as I argue in The Good Life). There is a lot of subjective value in anticipation, as an article in the Atlantic highlights. And yet it can also be a source of constant discontent if not combined with gratitude for what we have. This is a propitious time of the year to think not about what we lack but also what we have--and it is a useful exercise to do this while thinking about what we wanted ten or twenty or thirty years ago.
Research also shows that experiences matter more than things in overall wellbeing--we remember them better and they increase of overall sense of life satisfaction. Psychologist
Thomas Gilovich and his colleagues have shown in a number of studies
that money spent on experiences (rather than objects) provides more
enduring happiness among subjects. As with positional goods, experiences are tightly linked to identity--in many ways our identities are built from experiences.
Stuff is certainly important, but as Elizabeth Dunn and Michael Norton note in Happy Money: The Science of Smarter Spending, new-ness wears off quickly and is often followed by disappointment. We need things, but the meaning of things goes beyond their material properties--a thing,
anything, also serves as a vessel for our ideas, a container for our
hopes and dreams. And our aspirations often give more meaning to objects than they can handle, leading to disappointment.
So, while gratitude cannot replace aspiration, it is a necessary counterbalance for wellbeing.
$500 a pound coffee? Yes, the very best coffees these days are selling for astronomical prices. The $500/lb lot (from El Injerto in Guatemala) was a record, but the Wall Street Journal recently reported on the rising auction prices for so-called Third Wave coffees:
Commodity coffee prices are set by the New York C Price (which, today, is around $187 per hundredweight). But market demand is increasing for the highest quality coffees, those scoring in the upper 80s and above 90 on a 100 point cupping chart. And prices for these beans are rising fast.
Yet, The Guardian says of these new craft brews: "it's pricey, but farmers aren't getting rich." Guatemala is ground zero for the Third Wave coffee boom, and while it is true that farmers aren't getting rich, research Bart Victor and I are conducting shows that these mostly Maya small holding farmers have benefited from the market boom--and have high hopes for coffee. In my new book The Good Life, I look at the lives of these coffee farmers
Still the market is imperfect, and small farmers growing quality coffee often have a hard time selling it as such (rather than to middlemen, who mix it with undifferentiated lots). As The Guardian article reports, "those hoping to change these industries are betting on a mix of direct relationships between farmers and manufacturers, and new business models that help to distance specialty products from commodity prices."
The Page 99 Test blog takes its cue from Ford Madox Ford, who remarked "Open the book to page ninety-nine and read, and the quality of the whole will be revealed to you."
I was asked to apply the Page 99 Test to my new book, The Good Life: Aspiration, Dignity, and the Anthropology of Wellbeing: In this era of globalization, of transnational corporations
and ubiquitous internet access, it is easy to forget just how different
national economies sometimes are—and what we might learn from different
ways of organizing markets.
The goal of the economy, politics, and social institutions should be to promote wellbeing among people as broadly as possible. Yet, the questions remain: what exactly is wellbeing? and, How do we measure it for public policy purposes?
Economists privilege revealed preferences (what we actually do) as more true than stated preferences (what we say we want). Yet, as I argue in The Good Life, stated preferences often better reveal our long-term aspirations, desires, and vision of the sort of person we would like to be and the sort of world we would like to live in. Stated preferences often take longer time horizons and are more generous in their pro-social stance.
It turns out that the eudaimonic aspects (being a good person, living according to certain personal values, having a life that is meaningful) rank among the highest.
Merle Hazard's new single, Dual Mandate, entertains and elucidates as he explains the Federal Reserve's core tension: "Rich folks like to see the currency strong / But the average Joe’s not overjoyed if he’s destitute, and unemployed." Check out the PBS report, with cometary from Paul Krugman and Charles Calomiris, and see the full video:
When shopping, we behave differently when we pay in cash versus when we use a card (credit, debit, or gift). This is one of those everyday anomalies that belie our economic rationality, and many theoretical expectations, and yet that make sense. The feel of having cash in hand, the deliberate act of handing over bills, the material loss of paying--the very physicality of the act focuses our attention sharply on price. Using a card is "one step removed from having green cash money leave [your] flesh-and-blood hands," and thus the pain of paying is made more distant, as Ron Lieber argues in the NY Times.
Studies have shown that customers are willing to pay significantly more for the same item when using a card, and that card paying consumers are more concerned with features and quality compared to price. Thus, Dave Ramsey and a host of self-help gurus advise us to use cash as a way of nudging us to be more rational and prudent. Paul Roberts argues in The Impulse Society that credit cards feed into our accelerating desires for instant gratification.
But perhaps there is an upside to being less price sensitive (within reason, of course). In my book The Good Life, I look at German shoppers, who still mostly use cash in their supermarket transactions. They often express a preference for products that carry positive social values (organic, fair trade, etc.) and for quality. Yet, when the cash actually changes hands, they often opt for lower priced alternatives. This suggests that paying in cash curbs our enthusiasm for doing the right thing. Perhaps, then, when one can afford it (a separate issue), we would be doing more for the greater good to be less price sensitive--willing to pay for quality and the job dignity and social values that go with it.
Who are the happiest people in the world? In what countries do we find the highest life satisfaction? These are different questions, with different answers. Cheery contentment (hedonic happiness) is not the same as long-term wellbeing (eudaimonia), as I argue in The Good Life.
Martin Seligman, in his book Flourish, writes that "Colombia, Mexico, Guatemala, and the other Latin American countries are a lot happier than they should be given their low gross domestic product." High GDP might not guarantee happiness or wellbeing--but it also doesn't hurt as a comilations of wellbeing indices assembled by Korn Ferry shows:
World Database of Happiness Top Ten:
1.Costa
Rica
2.Denmark
3.Iceland
4.Switzerland
5.Finland
6.Mexico
7.Norway
8.Canada
9.Panama
10.Sweden
The Legatum Prosperity Index
1.Costa
Rica
2.Denmark
3.Iceland
4.Switzerland
5.Norway
6.Finland
7.Mexico
8.Sweden
9.Canada
10.Panama
The Legatum Prosperity Index
1.Costa
Rica
2.Denmark
3.Iceland
4.Switzerland
5.Norway
6.Finland
7.Mexico
8.Sweden
9.Canada
10.Panama
And Gallup has a new "Positive Experience Index" (measuring the occurrence of certain positive experiences the previous day) that tilts heavily Latin America:
Germans need to flush their toilets more often, says Hans-Jürgen
Leist, a scientist at the Ecolog Institute in Hanover, as quoted in a Wall Street Journal article.
In my new book, The Good Life, I look at how Germans choose their eggs--and it turns out that their preference for organic and free-range are driven by the same values of thrift and social solidarity that stop them from flushing their toilets. Germans rightly pride themselves on their thrift, from tedious and obligatory recycling regimes to crazy ways of saving grey water, and on their sense of social and ecological obligation ("solidarity" is is a value extolled by the political left and right).
But too much thrift is a bad thing for a water system. With energy efficient washing machines and quest for personal thrift has led per person water consumption to drop by more than 15% over the last 20 years (to 32 gallons/person). At the same time, and based on the same values of thrift and long-term investment, German cities have built up infrastructure capacity. And, as the WSJ reports, with low flow volumes, sewage systems develop all sorts of problems, from smells to corrosion.
Not so long ago Germany served as a cautionary example for the
Anglo-American economies. After the success of the post-war
economic miracle (the Wirtschaftswunder), by the 1980s Germany was best known for its generous
welfare state, chronically high unemployment rates, and slow growth. Donald Rumsfeld's dismissive quip about "Old Europe" was meant
to invoke all these ills and an accompanying political malaise.
But
following the 2008 financial crisis, Germany emerged as a
political-economic role model for the world. Policies to cushion workers
from layoffs kept unemployment low and consumer demand steady, and the
country's long-standing fiscal austerity allowed it to keep its southern
neighbors afloat during the debt crisis. The 12 July Schumpeter column in The Economist
reports that businesspeople and government officials from around the
world are making the pilgrimage to Germany to learn from its Mittelstand
(midsized manufacturers) sector.
It also reflects a change in global political and economic relations (as discussed here in more detail)--the rise of Brazil as a foreign aid donor, middle class consumer, and politically self-confident country.No longer just a supplier of the raw materials we need for our consumer goods, but a competitor driving up prices of consumer goods (coffee as well as Miami real estate), an emerging world power whose positions we need to engage and not assume we can dictate.
Almost half of Guatemalan children under five are malnourished, the vast majority rural Maya kids. This is a hidden human tragedy of epic proportions, each of these lives stunted - corporeally and figuratively - just as they are getting started. While we should not reduce this to just economic impact, it is nonetheless significant that the World Bank estimates that chronic malnutrition costs Guatemala hundred of millions of dollars a year in lost GDP. (See this recent PBS Newshour report that features Roger Thurow.)
Yet Guatemala is not a poor country. The GDP per capita of about $4000 may seem low, but worldwide it puts the country at the lower end of "middle income countries." Guatemala does have a very high gini index of inequality, and by any measure rural Maya peoples are the most disadvantaged. Such structural conditions directly affect health and nutrition, what Paul Farmer calls structural violence. Jonathan Metzl advocates for what he terms structural competency in clinical interventions, which calls on an ethnographic sensibility to understand root causes and larger contexts.
In Guatemala, efforts led by Dr. Peter Rohloff through Wuqu' Kawoq have taken a holistic approach to understanding malnutrition. In a new paper in Maternal and Child Nutrition, Rohloff and colleagues find that mothers often lack autonomy in making food decisions and that stunting is not recognized as such when it is the norm for the community. Most surprisingly, they find that land ownership, even among upwardly mobile farmers growing broccoli and other crops for export, is not correlated with a drop in childhood chronic malnutrition. In the vein of Farmer and Metzl, understanding the full context here certainly includes the political economic structures but also, crucially, the dynamic trajectories of cultural change, including the appeal of junk food.
Milton Friedman, the free-market economist whose perspective defined the Chicago School, famously held that managers' absolute ethical obligation is to maximize returns for stockholders. To do otherwise would be tantamount to stealing from them, he argued in an influential 1970 NY Times Magazine piece ("The Social Responsibility of Business is to Increase Its Profits").
Fast forward to 2014. Professor Friedman's ideas have taken hold in boardrooms and policy circles to an extend most academics could never dream of, and they lead to a troubling argument for the current wave of "inversion deals," merging with a smaller foreign firm and moving headquarters abroad to shelter profits from U.S. corporate taxes (among the highest in the world, although with so many loopholes effective rates are often low). Indeed, I heard one analyst remark that it is boards' fiduciary obligation to move a company abroad if it increases shareholder value.
This is an issue not just of business or economics, but of identity, corporate and individual. If a company's future is linked (conceptually and materially) to the collective prosperity of a city, region, or country, then moving operations to avoid taxes would be unwise. But if a company's peer community are other large transnational corporations (and not the people who inhabit a particular place), then share values trump local loyalties.
The trend of inversion deals converges with recent, seemingly serious, debates over the value of public infrastructure in private gain. Here too, short term thinking comes at the expense of long term planning, to all our detriment.
Customers hate Spirit airlines. Passengers routinely swear they will never fly it again; it ranks dead last in airline consumer satisfaction. Everything costs extra--the seats don't even recline. Planet Money's Zoe Chase and Jacob Goldstein took a trip recently and discovered a new category of customer, what that call hate fliers: "the guy who knows what he's getting into, doesn't like it, but flies Spirit anyway because it's so cheap." And business is booming.
What gives? People say they hate the airline, that they won't use it again, and then they do, over and over. Of course, what we say is not always what we do. We have a whole range of aphorisms and admonitions privileging the later over the former, and economists distinguish between stated preferences (the things we say we want) and revealed preferences (what we actually do, taken to be our true preferences).
A conventional economic analysis would say that folks really do want what Spirit Airlines offers; their protestations to the contrary are cheap talk. This is true, but only to an extent. I argue in my forthcoming book that in some contexts we need to value what people say they want as well as what they do. When our stated preferences are in conflict with our revealed preferences, the stated preferences often contribute more to a common good. But we we head to the checkout lane or click the mouse to buy an airline ticket, the lure of saving a few dollars is too much to resist--even if we think we would all be better off with the alternative in the long run.
Along these lines, the NY Times reports that while the French say they love their local shops and are leery of behemoths like Amazon, they flock to the large online retailers when the discounts are compelling ("Principles are no match for Europe's love of American web titans"). Indeed, France just passed what is called the "Anti-Amazon Law" that promotes small bookstores by limiting discounts, nudging (or forcing) folks to do what they say they prefer.
In the Sunday NY Times, Amy Wrzensniewski and Barry Schwartz argue that the secret of success is internal versus instrumental
motivation.They find that being driven
by intrinsic values (say, studying in order to learn) rather than instrumental
ones (studying to get a good grade to get a degree to get a good job) is highly
correlated with success among entering West Point cadets. Intrinsic motivation
would appear to best achieve the unrequited ends sought by instrumental values. Schwartz has a keen eye for such paradoxes--his earlier work on the Paradox of Choice
shows why more is not necessarily better.
Aristotle intuited the importance
of intrinsic motivation in his understanding of virtue, and philosopher Alasdair MacIntyre relates this to internal mastery of a practice. In The Craftsman, Richard Sennett shows the satisfaction that comes from doing a job well for its own sake. Lynn Stout, in her book Cultivating Conscience, argues that focusing on instrumental values in compensation schemes (i.e., pay based on meeting predetermined performance metrics) undermines the moral basis of intrinsic motivation (and inhibits true excellence): teachers and doctors, for example, should be working to improve people's lives, not just to meet a metric to make more money.
In my forthcoming book The Good Life, I look at the lives and aspirations of German consumers and Guatemalan farmers, and find that in both (radically different) circumstances, dignity and commitment to larger purpose are both fundamental elements of wellbeing. As I argue, understanding the elements of what makes us better off can provide the basis of a positive anthropology as well as practical policy suggestions.
Capitalism qua capitalism is a topic of serious discussion for the first time in the U.S. in a very long time, at least among the NY Times/Atlantic/New Yorker reading demographic. It has been spurred by post-2008 real world conditions and channeled through Thomas Piketty's new book Capital in the Twenty-First Century. A surprisingly weighty tome to top the Amazon non-fiction list, Piketty's book marshals a massive amount of data to show the recent rise in
inequality to new gilded age heights. In itself that is not a revelation,
but Piketty observes that it is not driven by high incomes (the
executive salaries that routinely make headlines) but rather by returns
on capital. He illustrates the growth of the economy versus returns on capital (figure taken from Kruger review of Piketty):
The first amazing fact captured in this diagram is the dramatic drop in the rate of return from capital during the 19th century--the shift away from feudalistic rent-taking to competitive capitalist production. And now the troublesome divergence that emerged in the 1990s and 2000s.
There is good evidence to suggest that a certain degree of inequality is correlated with economic growth. Too much inequality, however, disarticulates the production and consumption sides of the economy, constricts the opportunities open to the majority of people, a poses serious ethical dilemmas over what is acceptable. Where to draw the line is a technical and moral question, one that we tend to avoid.
Still, there is hope and even some practical solutions. Piketty calls for a 15% tax on capital and an 80% tax on incomes over $500,000.
Piketty's work reminds me of Jon Shayne's interview of Andrew Smithers (previously blogged here) in which Smithers shows the divergence of earning shares going to labor and going to profit:
Smithers
argues that executive compensation has introduced a number
of incentives that encourage managers to maximize short term profits at
the expense of long-term investment in labor and productivity. This is
troubling, and unhealthy for the economy in the long haul, as future
collective prosperity is foregone for immediate rewards.
In terms of speculation that produces little social benefit, Jon points out that one alternative would
be for the capital gains tax rate to become progressively lower over
time (i.e. rewarding holding and long-term investment). Economist Bob Frank promotes a steeply progressive consumption tax that would discourage the arms race of conspicuous consumption of positional goods.
From nudges to smart regulation, there now exists a policy toolkit to fix our economic, political, and social woes. If only we would use it.
Let us accept, if just for argument's sake, that the goal of politics and economic systems is the provisioning of the good life, as variously conceived, as broadly and fairly as possible. How then to achieve that aim? On the one hand, it would seem to require a commitment to individual freedom, old school Enlightenment style liberalism: people should be empowered to choose their own good life. At the same time, it also requires a commitment to common goods, the collective basis for individual flourishing and the source of much of our social wellbeing. In Sunday's NY Times, Tony Schwartz
makes the case that our lasting successes and and life satisfaction are
based on doing something that really matters, having the sense "that
we're truly adding value in the world" (also the argument in my forthcoming book on The Good Life).
Economist Deirdre McCloskey has been wrestling with this contradiction throughout her career (which began as Donald McCloskey). In a chapter in Cash on the Table, she observes that economists overvalue self-interest and anthropologists overvalue social goods--and that both miss the complicated interplay. As she explains to Paul Solman in a recent PBS NewsHour interview, this isn't just theoretical. She generally supports market approaches, but she also advocates a guaranteed minimum income on the grounds of moral values: I was on a subway in Paris a long time ago, and this guy came into
the car, and the first thing he said was: I’m 24 years old. Because he
couldn’t beg if he was 27 years old — that’s when the minimum income
came in. That is, if you were 27 in France, you got a minimum income. So
he couldn’t persuasively beg. I’d like people who can’t make enough
income to be helped out this way.
In the context of the developing world, guaranteed minimum incomes are a variant of conditional cash transfers (paying folks to keep their kids in school and healthy) and unconditional cash transfers. Give Directly gives $1000 to selected households in Kenya and Uganda; families do not apply, they are identified as needy and given the windfall. Overhead costs for such programs are minimal compared to traditional aid, and supporters argue that folks themselves know best what they need to get ahead.
Supporters of a minimum income argue that it both prevents extreme poverty and can encourage entrepreneurial behavior (by reducing the costs of failure). And more than just entrepreneurial ventures it can allow a greater range of life projects and wellbeing.
Commodity coffee prices are set by the New York C Price (which, today, is around $187 per hundredweight). But market demand is increasing for the highest quality coffees, those scoring in the upper 80s and above 90 on a 100 point cupping chart. And prices for these beans are rising fast.
But perhaps there is an upside to being less price sensitive (within reason, of course). In my book The Good Life, I look at German shoppers, who still mostly use cash in their supermarket transactions. They often express a preference for products that carry positive social values (organic, fair trade, etc.) and for quality. Yet, when the cash actually changes hands, they often opt for lower priced alternatives. This suggests that paying in cash curbs our enthusiasm for doing the right thing. Perhaps, then, when one can afford it (a separate issue), we would be doing more for the greater good to be less price sensitive--willing to pay for quality and the job dignity and social values that go with it.
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