How Much is Enough?

ToC, Preface, And Introduction





By Robert Skidelsky and Edward Skidelsky


Preface


As we were writing the book, friends of ours often asked us, halfjokingly, “Are you going to tell us how much you think is enough?” We found it sensible to riposte by asking, as if in the spirit of scholarly inquiry, “How much do you think is enough?” We often got the answer “Enough for what?” to which we replied, “Enough to live a good life.” This sometimes did elicit a stab at a number, though, as was to be expected, the number varied markedly according to age, circumstances and nationality. The fact is, of course, that one can only hope to get a meaningful and perhaps binding answer to the question from people who accept that there is such a thing as a good life, independent of their own subjective desires. The purpose of this book is to persuade the reader that such a thing—the good life—does exist and can be known, and that we ought to strive to live it. How much money we need to live it comes at the end of the argument, not at the beginning.* Many people have helped us. We are extraordinarily grateful to Armand Clesse, director of the Luxembourg Institute for European and International Studies, for organizing a symposium on the book in Luxembourg on May 27–28, 2011. Armand, who chaired in his usual vivacious style, had assembled an interdisciplinary galaxy: Michael Ambrosi, Christian Arnsperger, Tom Bauler, Mathias Binswinger, Ulrich Brand, Isabelle Cassiers, Aditya Chakrabortty, Andrew Hallam, Mario Hirsch, Sir Anthony Kenny, Charles Kenny, Guy Kirsch, Serge-Christophe Kolm, Axel Leijonhufvud, Felix

* In a previous book, Robert Skidelsky did venture to name a sum that the economist John Maynard Keynes would have considered “enough” to satisfy average needs: £40,000 or $66,000 or €46,000 a year (in today’s money). See Robert Skidelsky, Keynes: The Return of the Master, 2nd edn. (London: Penguin, 2010), p. 142, which also reveals the basis of the calculation. But Keynes was assuming a more settled idea of what the good life was than is now true, and less pressure to lead a bad life than now exists.

Martin, Matt Matravers, John Milbank, Adrian Pabst, Guy Schuller, Larry Siedentop, Alfred Steinherr, Henryk Szlajfer and Paul Zahlen. They read an early draft of the manuscript, and some even braved the volcanic ash then hovering over Europe to come. We received much encouragement and stimulus from their suggestions. Our UK agent Michael Sissons and our UK publisher Stuart Proffitt made notable contributions to the emergence of the proposal, and in nudging the book kindly but firmly towards publication, as did our enthusiastic American publisher Judith Gurewich, whose e-mails we will long remember. They all encouraged us to break academic cover and come out clearly with our own views. Our warmest thanks go to the following for reading the whole or part of drafts of How Much Is Enough? and, by their comments and criticisms, helping to improve its arguments: Perry Anderson, Tony Bicat, Carmen Callil, Meghnad Desai, Robin Douglass, Pavel Erochkine, Richard Fynes, Peter Pagan, Pranay Sanklecha, Richard Seaford, Augusta Skidelsky, Will Skidelsky and Wu Junqing. We thank Pete Mills and Christian Westerlind Wigstrom of Robert’s Centre for Global Studies for their unstinting help with research and criticism. Pete in particular played a big part in assembling the data and shaping the argument of Chapter 1. Donald Poon provided welcome assistance as a summer intern on his way to the LSE. Our thanks go to the Librarian and staff of the House of Lords for meeting our insatiable demand for books and articles. Above all, we enjoyed working together. The two months we spent in Languedoc in April/May 2011, writing and talking about the book, was an enormously happy time, a voyage of discovery, not least about each other: in its setting, a speck of the good life, for both of us. Robert and Edward Skidelsky

Introduction

This book is an argument against insatiability, against that psychological disposition that prevents us, as individuals and as societies, from saying “enough is enough.” It is directed at economic insatiability, the desire for more and more money. It is chiefly directed at the rich parts of the world, which may be reasonably thought to have enough wealth for a decent collective life. For the poor parts of the world, where the mass of the people still live in great poverty, insatiability is a problem for the future. But in rich and poor societies alike, insatiability can be seen wherever the opulence of the very rich runs wildly ahead of the means of existence of the many. Marxists contend that economic insatiability is a creation of capitalism, which will disappear with its abolition. Christians argue that it is the product of original sin. Our own view is that it is rooted in human nature—in the disposition to compare our fortune with that of our fellows and find it wanting—but has been greatly intensified by capitalism, which has made it the psychological basis of an entire civilization. What was once an aberration of the rich is now a commonplace of everyday life. Capitalism is a two-edged sword. On the one hand, it has made possible vast improvements in material conditions. On the other, it has exalted some of the most reviled human characteristics, such as greed, envy and avarice. Our call is to chain up the monster again by recalling what the greatest thinkers of all times and all civilizations have meant by the “good life” and suggesting changes in current policy to help us achieve it. In doing this, we will be challenging the current obsession with the growth of Gross Domestic Product (GDP) as the chief goal of economic policy. We are not against economic growth as such, but we may reasonably ask not just growth for what, but growth of what. We want leisure to grow and pollution to decline. Both are part of any sane idea of human welfare. But both are excluded from GDP, which measures only that portion of domestic production that is traded in markets. There is no subtraction for pollution, and no addition for leisure. The extent to which further GDP growth will improve welfare is therefore moot. It surely does so for very poor countries, but it may be the case that rich societies already have too much GDP. Our view is that, for the wealthy nations of the world, GDP should be treated as a by-product of policies aimed at realizing the good life. Only experience will show whether the GDP outcome is positive, negative or stationary. This book is not about the principles of justice, but about the constituents of the good life. Most modern political theory starts from the consideration of what is just, or fair, in the abstract, and proceeds to derive from this “just” social arrangements. Our approach is different. We start with the individual and his needs, from which we try to build up a picture of the common good. Questions of distribution, which lie at the center of modern discussions of justice, while vitally important, are only so to us in the context of the requirements of the good life. Imagine a world in which most people worked only fifteen hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that the economist John Maynard Keynes conjured up in a little essay published in 1930 called “Economic Possibilities for our Grandchildren.” Its thesis was very simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all. Then, Keynes wrote, “for the first time since his creation man will be faced with his real, his permanent problem— how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” He thought this condition might be reached in about a hundred years’ time—that is, by 2030. Given when it was written, it is hardly surprising that Keynes’s futuristic essay was ignored. The world had much more urgent problems to attend to, including getting out of the Great Depression. And Keynes himself never explicitly reverted to his vision, though the dream of a workless future was always there in the background of his thinking. Indeed, it was as a theorist of short-term unemployment, not of long-run economic progress, that Keynes achieved world fame, with his great book The General Theory of Employment, Interest and Money. Nevertheless, there are good reasons for returning to the questions Keynes raised, then dropped. First, he asked something hardly discussed today: what is wealth for? How much money do we need to lead a good life? This might seem an impossible question. But it is not a trivial one. Making money cannot be an end in itself—at least for anyone not suffering from acute mental disorder. To say that my purpose in life is to make more and more money is like saying that my aim in eating is to get fatter and fatter. And what is true of individuals is also true of societies. Making money cannot be the permanent business of humanity, for the simple reason that there is nothing to do with money except spend it. And we cannot just go on spending. There will come a point when we will be satiated or disgusted or both. Or will we? Second, we in the West are once more in the midst of a “Great Contraction,” the worst since the Great Depression of 1929–1932. A great crisis is like an inspection: it exposes the faults of a social system, and prompts the search for alternatives. The system under inspection is capitalism, and Keynes’s essay offers a vantage point from which to consider the future of capitalism. The crisis has brought to light two defects in the system, usually obscured by the near unanimous commitment to growth at almost any cost. The first is its moral defects. The banking crisis has shown yet again that the present system relies on motives of greed and acquisitiveness, which are morally repugnant. It also divides societies into rich and poor, latterly very rich and very poor, justified by some version of the “trickle down” idea. The coexistence of great wealth and great poverty, especially in societies in which there is enough for everyone, offends our sense of justice. Second, the crisis has exposed capitalism’s palpable economic defects. Our financial system is inherently unstable. When it goes wrong, as it did in 2008, we realize how inefficient, wasteful and painful it can be. Heavily indebted countries are told that the bond markets will not be satisfied till they have liquidated a large fraction of their national incomes. Such periodic collapses of the moneymaking machine are a great spur to thinking about better ways of life. Finally, Keynes’s essay challenges us to imagine what life after capitalism might look like (for an economic system in which capital no longer accumulates is not capitalism, whatever one might call it). Keynes thought that the motivational basis of capitalism was “an intense appeal to the moneymaking and money-loving instincts of individuals.”1 He thought that with the coming of plenty, this motivational drive would lose its social approbation; that is, that capitalism would abolish itself when its work was done. But so accustomed have we become to regard scarcity as the norm that few of us think about what motives and principles of conduct would, or should, prevail in a world of plenty. So let us imagine that everyone has enough to lead a good life. What is the good life? What is it not? And what changes in our moral and economic system would be needed to realize it? Such questions are seldom asked, because they do not fall neatly into any of the disciplinary boxes that make up modern intellectual life. Philosophers construct systems of perfect justice, unmindful of the messiness of empirical reality. Economists ask how best to satisfy subjective wants, whatever these may be. Our book brings together the perspectives of philosophy and economics in the conviction that the two disciplines need each other, the one for the sake of its practical influence, the other for the sake of its ethical imagination. It aims to revive the old idea of economics as a moral science; a science of human beings in communities, not of interacting robots. How Much Is Enough? opens by pondering the reasons for the failure of Keynes’s prophecy. Why, despite the surprising accuracy of his growth forecasts, are most of us, almost a hundred years on, still working almost as hard as we were when he wrote his futuristic essay? The answer, we suggest, is that a free-market economy both gives employers the power to dictate hours and terms of work and inflames our innate tendency to competitive, status-driven consumption. Keynes was well aware of the evils of capitalism, but assumed that they would wither away once their work of wealth creation was done. He did not foresee that they might become permanently entrenched, obscuring the very ideal they were initially intended to serve. Keynes, we add in Chapter 2, was not alone in thinking that motives bad in themselves might nonetheless be useful. John Stuart Mill, Karl Marx, Herbert Marcuse—even Adam Smith in bolder moments—all granted such motives a positive role as an agent of historical progress. In the language of myth, Western civilization has made its peace with the Devil, in return for which it has been granted hitherto unimaginable resources of knowledge, power and pleasure. This is, of course, the grand theme of the Faust legend, immortalized by Goethe. The irony is, however, that now that we have at last achieved abundance, the habits bred into us by capitalism have left us incapable of enjoying it properly. The Devil, it seems, has claimed his reward. Can we evade this fate? Perhaps, but only if we can retrieve from centuries of neglect and distortion the idea of a good life, a life sufficient unto itself. Here we must draw on the rich storehouse of pre-modern wisdom, occidental and oriental, which we outline in Chapter 3. Opposition to the growth juggernaut has gathered pace in recent years. Growth, say critics, is not only failing to make us happier; it is also environmentally disastrous. Both claims may well be true, but they fail to capture our deeper objection to endless growth, which is that it is senseless. To found our case against growth on the fact that it is damaging to happiness or the environment is to invite our opponents to show that it is not in fact damaging in these ways—an invitation they have been quick to take up.* The whole argument then disappears down an academic cul-de-sac. The point to keep in

* Nigel Lawson and Bjørn Lomborg (among others) have argued that global warming is best dealt with by pressing ahead with technological progress so as to mitigate any adverse consequences. And some economists have argued that wealthier nations are indeed happier than poor ones. For details, see Chapters 4 and 5.mind is that we know, prior to anything scientists or statisticians can tell us, that the unending pursuit of wealth is madness. This is the gist of our argument in Chapters 4 and 5. We come finally, in Chapter 6, to the positive part of our proposal: the outline of the good life. Drawing on insights from all times and places, we identify seven “basic goods,” possession of which constitutes living well. The first duty of government, we argue, is to realize, as much as lies within its power, these basic goods for all citizens. How this might in fact be achieved is the theme of Chapter 7, in which we suggest a number of policies for bringing the limitless desire for wealth under the control of an objective concept of the good. Unless that control is achieved we are a doomed civilization—on a hiding to nothing, or worse. In discussing our ideas with friends and acquaintances, five objections have cropped up regularly. The first concerns timing. “Now of all moments,” we are told, “is not the time to be talking about an end to growth. Wouldn’t Keynes himself, were he alive, urge us to resume growth as rapidly as possible in order to bring down unemployment and pay off government debt?” We do not dispute this. But we need to distinguish between short-term policies for recovery after the worst depression since the 1930s and long-term policies for realizing the good life. In the two years after 2008, world output shrunk by 6 percent, and has only partly regained its previous level. We must at the very least retrieve the output we have lost because, as the economy is now organized, there is no other way to reduce unemployment and indebtedness, private and public. But we should not let the exigencies of the hour cloud our view of ultimate ends. Keynes’s own utopia was penned at the bottom of the Great Depression. “My purpose in this essay,” he wrote, “is not to examine the present . . . but to disembarrass myself of short views and take wings into the future.” This is the spirit in which our book is offered. The second query concerns the geographical scope of our proposals. Are we suggesting that nations in which millions remain ill-housed and ill-fed should be content with what they have? Of course not. Our arguments are addressed to that part of the world in which the material conditions of wellbeing have already been met. In places where they have not been met, growth remains, rightly, a priority. That said, if the developing world carries on developing, it will eventually face our predicament, so it may as well prepare for it in advance. It should not repeat our mistake of becoming so absorbed in the means that it forgets the end. The next three objections cut deeper. “Your proposals,” runs the first, “will have the effect of undermining all initiative, creativity, vision. They are a blueprint for universal idleness.” It is sometimes added that our ideas reflect a decadent, “old-European” mind-set. This observation comes, unsurprisingly, mostly from Americans. To lay these misapprehensions to rest, let us state firmly that our book is not an argument for idleness. What we wish to see more of is leisure, a category that, properly understood, is so far from coinciding with idleness that it is almost its polar opposite. Leisure, in the true, now almost forgotten sense of the word, is activity without extrinsic end, “purposiveness without purpose,” as Kant put it. The sculptor engrossed in cutting marble, the teacher intent on imparting a difficult idea, the musician struggling with a score, a scientist exploring the mysteries of space and time—such people have no other aim than to do what they are doing well. They may receive an income for their efforts, but that income is not what motivates them. In our terms, they are engaged in leisure, not toil. This is an idealization, of course. In the real world, extrinsic rewards, including financial rewards, are never entirely out of mind. Still, insofar as action proceeds not from necessity but from inclination, insofar as it is spontaneous, not servile and mechanical, toil is at an end and leisure has begun. This—not idleness—is our ideal. It is only our culture’s poverty of imagination that leads it to believe that all creativity and innovation—as opposed to that specific kind directed to improving economic processes—needs to be stimulated by money. “That is all very splendid,” our critic might retort, “but it is hardly likely that a reduction of externally motivated activity will lead to an increase of leisure, in your high-flown sense of the term. Slackers like us need the stimulus of money to move us to anything. Without it, our natural laziness comes to the fore, leading not to the good life but to boredom, neurosis and the bottle. Read a few Russian novels and you will see what I mean.” Such an objection can only be met with a declaration of faith. A universal reduction of work has never been attempted, so we do not know for sure what its consequences would be. But we cannot think them as dire as our critic suggests, or the central project of modern European civilization, to improve the wellbeing of the people, is empty and vain. If the ultimate end of industry is idleness, if we labor and create merely so that our descendants can snuggle down to an eternity of daytime television, then all progress is, as Orwell put it, “a frantic struggle towards an objective which [we] hope and pray will never be reached.”2 We are in the paradoxical situation of goading ourselves to ever new feats of enterprise, not because we think them worthwhile, but because any activity, however pointless, is better than none. We must believe in the possibility of genuine leisure—otherwise our state is desperate indeed. Another reflection gives us hope. The image of man as a congenital idler, stirred to action only by the prospect of gain, is unique to the modern age. Economists, in particular, see human beings as beasts of burden who need the stimulus of a carrot or stick to do anything at all. “To satisfy our wants to the utmost with the least effort” is how William Stanley Jevons, a pioneer of modern economic theory, defined the human problem.3 That was not the ancient view of things. Athens and Rome had citizens who, though economically unproductive, were active to the highest degree—in politics, war, philosophy and literature. Why not take them, and not the donkey, as our guide? Of course, Athenian and Roman citizens were schooled from an early age in the wise use of leisure. Our project implies a similar educational effort. We cannot expect a society trained in the servile and mechanical uses of time to become one of free men overnight. But we should not doubt that the task is in principle possible. Bertrand Russell, in an essay written just two years after Keynes’s effort—a further illustration of the stimulating effects of economic crisis—put the point with his usual clarity:

It will be said that, while a little leisure is pleasant, men would not know how to fill their days if they had only four hours of work out of the twenty-four. In so far as this is true in the modern world, it is a condemnation of our civilization; it would not have been true at any earlier period. There was formerly a capacity for light-heartedness and play which has been to some extent inhibited by the cult of efficiency . . . The pleasures of urban populations have become mainly passive: seeing cinemas, watching football matches, listening to the radio, and so on. This results from the fact that their active energies are fully taken up with work; if they had more leisure, they would again enjoy pleasures in which they took an active part.

We might add that it is largely because leisure has lost its true meaning of spontaneous activity and degenerated into passive consumption that we throw ourselves, as the lesser of two evils, into work. “One must work,” wrote Baudelaire in his Intimate Journals, “if not from taste then at least from despair. For to reduce everything to a single truth, work is less boring than pleasure.”5 A fourth objection takes the form of a qualified defense of moneymaking: true, say our critics, it is not the noblest of human activities, but of the main goals of human striving it is the least harmful. Keynes put it well: “dangerous human proclivities can be canalized into comparatively harmless channels by the existence of opportunities for moneymaking and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement.” But he added that “it is not necessary for the stimulation of these activities and the satisfaction of these proclivities that the game should be played for such high stakes as at present. Much lower stakes will serve the purpose equally well, as soon as the players are accustomed to them.”6 This perfectly captures our defense. We are not proposing that moneymaking should be banned, as it was in the Soviet Union, but that “the game” should be subject to rules and limitations that do not move society away from the good life. The last, and deepest, objection to our project concerns its supposedly illiberal character. A liberal state, John Rawls and others have taught us to believe, embodies no positive vision but only such principles as are necessary for people of different tastes and ideals to live together in harmony. To promote, as a matter of public policy, a positive idea of the good life is by definition illiberal, perhaps even totalitarian. We return to this objection in due course; let us just say here that it rests on a thorough misconception of liberalism. Through most of its long history, the liberal tradition was imbued with classical and Christian ideals of dignity, civility and tolerance. (“Liberal,” we should remember, originally designated what was appropriate to a free man, a usage surviving in phrases such as “liberal arts.”) In the twentieth century, such prototypical liberals as Keynes, Isaiah Berlin and Lionel Trilling took it for granted that upholding civilization was among the functions of the state. It is a superficial conception of liberalism that sees it as implying neutrality between different visions of the good. In any case, neutrality is a fiction. A “neutral” state simply hands power to the guardians of capital to manipulate public taste in their own interests. Perhaps the chief intellectual barrier to realizing the good life for all is the discipline of economics, or rather the deathly orthodoxy that sails under that name in most universities across the world. Economics, says a recent text, studies “how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.”7 The italicized adjectives are strictly redundant: if wants are unlimited, then resources are by definition limited relative to them, however rich we may be in the absolute sense. We are condemned to dearth, not through want of resources, but by the extravagance of our appetites. As the economist Harry Johnson put it in 1960, “we live in a rich society, which nevertheless in many respects insists on thinking and acting as if it were a poor society.”8 The perspective of poverty, and with it an emphasis on efficiency at all costs, is built into modern economics. It was not ever thus. Adam Smith, the founder of modern economics, assumed that our inborn desire for improvement would eventually run up against natural and institutional limits, resulting in the achievement of a “stationary state.” For Alfred Marshall, Keynes’s teacher, economics was the study of the “material pre-requisites of wellbeing,” a definition that preserved the Aristotelian and Christian concept of wealth as a means to an end. After Marshall, however, economics shifted gear. In a classic definition, Lionel Robbins wrote of economics as “the science that studies human behaviour as a relationship between ends and scarce means which have alternative uses.”9 Robbins’s definition both puts scarcity at the center of economics and brackets out judgments of value. The domain of economics is the study of efficient means to ends, but the economist, qua economist, has nothing to say about those “ends.” He assumes only that they will always outstrip the means at our disposal for attaining them, meaning that scarcity is a permanent feature of the human condition. If scarcity is always with us, then efficiency, the optimal use of scarce resources, and economics, the science that teaches us efficiency, will always be necessary. Yet on any commonsensical view of the matter, scarcity waxes and wanes. We know that famines are periods of extreme scarcity and good harvests produce relative plenty. Thomas Malthus understood that when population grows faster than food supplies, scarcity grows; and in the reverse case, it declines. Moreover, scarcity, as most people understand it, has diminished greatly in most societies over the last two hundred years. People in rich and even medium-rich countries no longer starve to death. All this implies that the social importance of efficiency has declined, and with it the utility of economics. The beginning of sanity in this matter is to think of scarcity in relation to needs, not wants. And this is how we do normally think of it. The man with three houses is not thought to be in dire straits, however urgent his desire for a fourth. “He has enough,” we say, meaning “enough to meet his needs.” Flagrant manifestations of insatiability— such as an uncontrollable desire to collect cats or dolls’ houses—are widely viewed as pathological, not normal. (Economists, like psychoanalysts, tend to treat neurosis as the norm.) We are all, in principle, capable of limiting our wants to our needs; the problem is that a competitive, monetized economy puts us under continual pressure to want more and more. The “scarcity” discerned by economists is increasingly an artifact of this pressure. Considered in relation to our vital needs, our state is one not of scarcity but rather of extreme abundance. The premise of what follows is that the material conditions of the good life already exist, at least in the affluent parts of the world, but that the blind pursuit of growth puts it continually out of reach. Under such circumstances, the aim of policy and other forms of collective action should be to secure an economic organization that places the good things of life—health, respect, friendship, leisure and so on—within reach of all. Economic growth should be accepted as a residual, not something to be aimed at. Over time, such a shift is bound to affect our attitude to economics. To maximize the efficient use of our time will become less and less important; and therefore “scientific” economics, as it has developed since Robbins, will be demoted from its position as the queen of the social sciences. It can bring us to the threshold of plenty, but must then retire from its oversight of our lives. This is what Keynes had in mind when he looked forward to the day when economists would become as useful as dentists.10 He always chose his words carefully: it was as dentists, not doctors, that humanity would come to need economists; at the margins of life, not as a continuous, much less controlling, presence.

What constitutes the good life? What is the true value of money? Why do we work such long hours merely to acquire greater wealth? These are some of the questions that many asked... (More)