What Growth Fetish?

Clive_Hamilton.jpg

Do governments put too much emphasis on economic growth? Winton Bates pumps his own moral intuitions and satisfies himself that the answer is no

In the latest edition of Policy, economic consultant Winton Bates takes on Clive Hamilton’s anti-growth arguments (pdf). After agreeing that GDP is a flawed measure of well-being he dismisses the idea that governments should pursue either economic growth or well-being as ends in themselves. Bates argues that what really matters is consumer sovereignty. People should be allowed to make their own decisions and encouraged to take responsibility for the consequences.

Despite all the graphs and statistics, the dispute between Hamilton and Bates is about philosophy rather than social science. Hamilton says the most important things in life are inner freedom and personal development while Bates says they are negative liberty and personal responsibility.

Hamilton believes that many people want the wrong things. Instead of pursuing the things which will enable them to flourish as human beings, they want what the advertisers manipulate them into wanting. In his 2003 book Growth Fetish he argues:

Consumers’ preferences do not develop ‘outside the system’: they are created and reinforced by the system, so that consumer sovereignty is a myth. The question is not one of personal consumer choice versus elitist social engineering; it is one of corporate manipulation of consumer behaviour versus individuals in society understanding what is in their real interests (p 65).

When Hamilton writes about people pursuing their ‘real interests,’ or ‘happiness’ he doesn’t mean some Brave New World of philistine comfort and pleasure. He’s not a Benthamite. Instead he follows Aristotle in arguing that happiness or well-being is about "the full realisation of human potential." Ideally, citizens would be able to choose how they lived their lives. But to be able to choose freely they would have to be released from the coercive influences of advertisers and their "unreasonable attempts to influence people to act in ways that are contrary to their considered interests" (pdf).

Hamilton’s idea of a free society is one where the distractions of marketing and consumerism are replaced by a clearer sense of what’s important in life. He hopes that when the market is cut down to size people will learn to want things that enable them to grow as human beings – things that are truly in their interest. People will decide to spend more time with their families and in education and less time in paid work. They will learn to care more about their communities and the natural environment and less about status and competition. Not all of these things would make life more pleasurable but all, according to Hamilton, they would make it more worthwhile.

Winton Bates has a different ideal. In his Policy article he writes that:

When people have the mental competence to accept responsibility for their actions, it seems to me that it is good that they should get what they want, in so far as this is possible within the constraints imposed by other people being free to get what they want.

Bates draws on Robert Sugden‘s reformulation of the concept of consumer sovereignty. In his paper ‘The Responsibility Criterion‘ Sugden assumes that taking responsibility for one’s life as a whole is a virtue. A morally integrated person "treats her past actions as her own, whether or not they were what she now desires them to have been. Similarly, she treats her future actions as her own, even if she does not yet know what they will be, and whether or not she expects them to be what she now desires them to be." Such a person would not blame the government for allowing them to get what they wanted in the past. Nor would they want to a government to restrict their choices now so they wouldn’t regret them in the future (for example, by forcing them to save for retirement).

For Sugden and Bates a good society is one which fosters both personal responsibility and opportunity. But as Sugden admits:

Not everyone believes that more opportunity (for himself, or for anyone else) is better than less. Not everyone believes that taking responsibility for one’s life as a whole is a virtue. These are moral positions that belong to the tradition of classical liberalism.

This is as much argument as you’ll get in Sugden’s paper while Bates’ argument for consumer sovereignty is to say "it seems to me" before writing down his personal moral intuitions. Most people think that choice and personal responsibility are important but few would stop there. For example, many people are willing to sacrifice economic freedom if it means that people are more likely to get what they deserve. Part of the reason for the unpopularity of Milton Friedman’s negative income tax (NIT) proposal was that it would take money from people who worked for it and give it to other people who had no intention of working. Even if the NIT was cheaper than the current system of mutual obligation and would allow taxpayers to keep more of their earnings, it would still be unpopular.

Bates supports economic growth because it goes hand in hand with free markets, and free markets are the best way to promote freedom and personal responsibility. But if greater growth could be achieved through government interventions which limited freedom and responsibility then Bates would opt for less growth. He makes this clear in his discussion of compulsory superannuation (p 15). Even if a compulsory super scheme promoted economic growth he says this would not justify interference with individual freedom. Less growth and more old-age poverty would be preferable.

It seems likely that Hamilton might take a similar position on subjective well-being. While he argues that stagnant levels of subjective well-being are a sign that economic growth has failed to deliver, he would not favor policies which limited ‘inner freedom’ or personal development just because they increased subjective well-being.

This dispute can’t be settled by appealing to survey data or other statistics. Hamilton and Bates have very different ideas about human nature and about what makes life worthwhile. Both writers spend most of their time preaching to other people who share their moral intuitions.

Elsewhere:

Andrew Norton reviewed Growth Fetish in the Spring 2003 edition of Policy: "Ironically, one of the first Australian books to draw heavily on the burgeoning international research into subjective well-being ends up with policy proposals that would undermine it… Far from being a handbook for happiness, Growth Fetish is a manifesto for misery."

Winton Bates sets out his case for smaller government in his 2001 paper ‘How Much Government’ (pdf). He considers the effects of economic growth on social cohesion in his 1996 paper ‘The Links Between Economic Growth And Social Cohesion.’

Clive Hamilton expands on the idea of ‘inner freedom’ in his 2004 paper ‘The Disappointment of Liberalism and the Quest or Inner Freedom (pdf).

You can read some of my criticisms of Hamilton’s work in my old blog Wealth for Toil. In ‘The Other Growth Fetish‘ I explain why Hamilton isn’t really all that interested in subjective well-being. See also ‘Freedom and Pornocracy‘ and ‘I’m From a Think Tank and I’m Here to Help‘.

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Jason Soon
Jason Soon
2022 years ago

the problem with clive h is his arbitrary distinctions. what makes the speech of advertisers so transcendent of normal human discourse? argument is a form of persuasion, so is advertising. argument can convince you to take up bad ideas and advertising can convince you to buy products you later regret buying. if there’s a case for regulating advertising, why not a Federal Commission to regulate bad ideas and their exponents?

Mark Bahnisch
2022 years ago

Must admit I’m a bit conflicted on all this. I support people’s right to choose and also think they need to take responsibility for their choices. I suspect that a different sort of society would inspire different needs and desires but on the other hand I enjoy consumption a lot (as my credit cards will testify). There is something deeply unappealing about Hamilton’s arguments, though – they always remind me of what I think is the worst part of Marxism – the assertion that there are real and false interests and that theorists know best.

Incidentally, Mr Hamilton looks a bit like John Major!

Nabakov
Nabakov
2022 years ago

“Mr Hamilton looks a bit like John Major!”

“Hamilton”‘s the giveaway. Don’s visual for the post is quoting/nicking distinct elements and the overall look and feel of Richard Hamilton’s “In Every Dream Home A Heartache” – which was also the inspiration for an epynomous ditty by one of his students.

“I blew up your body..but you blew my market desires.”

Hah! and folks thought my time at art college was wasted!

Mark Bahnisch
2022 years ago

“Both writers spend most of their time preaching to other people who share their moral intuitions.”

It’s possible to offer reasoned arguments in defence of one’s moral intuitions. I agree this debate is not really a social-scientific but a philosophic one, and a good philosophic argument would be productive, instead of sermons to the converted.

Andrew Norton
Andrew Norton
2022 years ago

Amazing! I think I am agreeing with Don and Mark here, that this is essentially a debate about philosophy. But one of the reasons I think Hamilton is one of the most sinister figures in Australian intellectual life is that he wraps what are essentially authoritarian ideas in the rhetoric of freedom (albeit inner, the only type you’ll have left if Clive had his way) and social-scientific reasonableness. For that reason, it is worth showing why the social science does not support his case, which is what I was trying to do in that review. He has another book on ‘Affluenza’ coming out later this year, and I will do another critique of the no-doubt dubious social science in that.

Joel Parsons
2022 years ago

From what I’ve heard of it, Hamilton’s argument seems to come down to two ideas, one I like, the other I don’t.

The first idea is that more wealth and income don’t necessarily make you better off. I totally agree with that.

The second idea is that the government needs to “free” people from materialism by limiting their freedoms. This Orwellian “Freedom is slavery” notion betrays Hamilton’s elitist belief that big brother knows best.

Chris Rolliston
Chris Rolliston
2022 years ago

On the other hand, perhaps the case against Hamilton is not the ‘open-and-shut’ one some of the commentators here believe. Do mandatory seat-belts, traffic lights, well-established licensing hours, and so forth – all things that restrict negative liberty simply put – impinge upon a citizen’s freedom or enable it? Or what about the laws in many Western democracies against incitement to racial hatred? For these could be construed as holding a presupposition that to ‘choose’ to instigate specifically racial violence is not to be truly ‘free’ in a fundamental way. Thus, a law prohibiting such an action could be construed as being as much for the would-be perpetrator’s benefit as the potential victims’.

Also, regarding Jason’s specific claim of arbitrariness on Hamilton’s part: consider Adam Smith’s (as distinct from the Adam Smith Institute’s) ideal society. There, the butcher, baker and candlestick-maker are (a) individual persons and (b) will probably live in the same place all their lives. Thus, they will have some sort of personal relationship with most of their customers, their customers generally being others in the local community. So when shop owners sell their wares, they will be employing and seeking to enhance their personal reputations as individuals. Hence, such a market situation, in contrast to one of mass consumer capitalism, is structurally not one of mutual indifference between participants.

To illustrate: if a customer of the individual baker, upon going to buy a loaf of bread, sees the baker slumped across the counter, it is reasonable to suggest that the customer has a duty to do something in a way that will put herself or himself out – say, call for medical assistance and stay with the baker until that assistance arrives. But think of the same situation transposed to a customer going to a to buy a loaf of bread in a modern large supermarket. Of course, if first onto the scene, it’s reasonable to think of the customer having a duty to take a second or two to inform another shop assistant of the situation. Yet with all the other people in the shop, it is far more likely that this particular customer will not even have a duty to do that, and instead will just be a cursory spectator. Thus, here it is not individuals who have an implied duty of care, but an anonymous ‘system’. Of course, one’s first response to that may be, ‘Great! Another burden off of the individual!’ But, or so it could be argued, the transposing of implied duties of care from individuals to anonymous ‘systems’ merely devalues what it means to be an individual agent in the first place…