Sunday, February 04, 2007

Prosperity paradox?

Not quite, says Daniel Ben-Ami.  Today's world looks, on average, like an utopian dream from a mere 100 years ago.
There is no 'paradox of prosperity'
So what if material progress doesn't always make us happy? It's still a good thing, and here's why.
Daniel Ben-Ami

Contemporary critics of consumerism and popular prosperity are obsessed with what they see as a paradox. A central theme of their arguments is that economic growth does not make people happier. In their view, the pursuit of mass affluence is at best futile and is probably responsible for making humanity miserable. Often the growth sceptics argue that the pursuit of material goods is akin to a disease: they say the developed world is suffering from 'affluenza' or 'luxury fever' (1). Typically they conclude we should not attempt to become richer and often they argue for the pursuit of alternative social goals such as mental well-being.

But there is reason to question whether breaking the connection between prosperity and happiness is the killer blow that the critics assume. The growth sceptics seem to ignore the possibility that greater affluence could be immensely beneficial even if it does not necessarily make people happier. Nor do they understand that the propensity for human beings to be unhappy with their lot could have a good side. The striving for a better life is an important motor force of progress. The arguments the happiness pundits advance to show that prosperity does not lead to enhanced well-being are also dubious. And the policies they often propose to make people happier tend to be authoritarian.
Fortunately a new book by Indur Goklany, an American economist, examines the data in great detail. Its title clearly sums up the argument: The Improving State of the World: Why we're Living Longer, Healthier More Comfortable Lives on a Cleaner Planet (Cato 2007). Goklany's book takes a similar line to The Skeptical Environmentalist (Cambridge 2001) by Bjørn Lomborg, a Danish statistician, which infuriated environmentalists when it was first published (7).

There is an immense amount of detail in Goklany's book but some of the key statistics are worth reiterating:

  • Life expectancy, which for much of human history was 20-30 years, increased from a worldwide average of 31 in 1900 to 66.8 in 2003. For the high income countries it has reached 78.5 years.
  • Infant mortality (death of infants before the age of one per 1,000 live births) was typically over 200 before industrialisation. That is over a fifth of babies died before reaching their first birthday. The worldwide average has fallen from 156.9 in the early 1950s to 56.8 in 2003. In the developed world the average is 7.1.
  • Improving health. The onset of chronic diseases is typically happening several years later than in the past. For example, white males aged 60-64 in America are two-and-a-half times more likely to be free of chronic disease than their counterparts a century ago.
  • Air quality. Despite the common prejudice that economic development leads to air pollution the evidence in the developed world overwhelmingly suggests that air quality is improving. For example, the traditional pollutants have declined in America for several decades.

The fact that the trend is improving does not mean that everything is perfect. There are many instances, particularly in the developing world, where things could be far better. But to the extent there are still problems they constitute an argument for more development rather than less. If the developing world could reach the current living standards of the developed world, that would be a start. Billions of people would be much better off.

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