Book Reviews

Is Growth Moral?

Yes, economic growth is necessary. But does it produce a just society?

By Stuart Whatley

Tagged EconomicsgrowthTyler Cowen

Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals By Tyler Cowen • Stripe Press • 2018 • 160 pages • $17

Thorstein Veblen’s The Theory of the Leisure Class has always been remembered more for the phrase “conspicuous consumption” than for its broader argument. Yet Veblen made a useful contribution to an ongoing debate about the ends and means of economic growth. Challenging a then-dominant economic orthodoxy that regarded material progress as an emergent phenomenon borne of individuals satisfying personal “preferences,” he identified a top-down mechanism by which those desires had come to be rationalized across society. In earlier times, social emulation tended to have an upper limit: The butchers, brewers, and bakers compared themselves to other butchers, brewers, and bakers, not princes and kings. But in a quickly modernizing America, where wealth had become the “conventional basis of esteem,” Veblen saw that it was the rich who determined “what scheme of Life the community shall accept as decent or honorific.”

So begins the rat race. Competition for the ever-evolving trappings of socioeconomic respectability implies an eternal struggle, one that has proven to be a powerful engine of economic growth, lifting many countries out of poverty and far above subsistence levels. It also requires individuals to subscribe to a mode of life and system of values that they might not otherwise have chosen. Even under conditions of affluence, it is simply accepted that the aggregate marginal benefits of rapid economic growth justify the moral and psychic demands placed on individuals by the process. And yet, Veblen, and the broader philosophical tradition to which he belongs, raises questions about such assumptions.

Nonetheless, since the introduction of national accounting in the World War II era, a country’s aggregate output has served as a measure of not just economic development, but even moral progress. In Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals, George Mason University economist Tyler Cowen defends this implicit ethical framework on the grounds of moral philosophy. Because economic growth “alleviates misery, improves happiness and opportunity, and lengthens lives,” he thinks we owe it to ourselves and all future generations to put “production at the center of our moral theory.”

Cowen hastens to add that by “growth” he means the accumulation of “Wealth Plus,” which includes not just “the traditional measures of economic value found in GDP statistics,” but also “measures of leisure time, household production (valuable activities you perform at home for free, be it mending socks or using Facebook), and environmental amenities.” Yet his focus is clearly on material affluence. In an apparent riposte to Adam Smith, who saw “baubles” (luxury goods) as “fitter to be the playthings of children than the serious pursuits of men,” Cowen asserts that the “splendors of the modern world are not just frivolous baubles; they are important sources of human comfort and well-being.” Missing from this moral calculus, of course, is the fact that many of our baubles are made affordable on the backs of sweatshop laborers abroad and an underpaid precariat at home.

Moreover, since the 1970s, inequality, by most measures, has increased substantially, and upward social mobility has declined in the United States. These trends cast doubt on Cowen’s assertion that long-term growth always “confers immense benefits to ordinary citizens, including their ability to educate and entertain themselves and choose one life path over another.” One could easily imagine a scenario in which most of the gains from growth accrue to a narrow cohort that is then empowered to perpetuate those distributional conditions indefinitely through undue influence over public policy. In fact, one need not imagine anything: This describes the United States today. Since 1980, the top 10 percent of U.S. households have not just captured all of the income gains from growth, but have also extracted an additional share of total income from the bottom 90 percent.

No mechanism for reversing these trends exists within the growth process itself. At issue, then, is not whether “growth” is desirable, but whether it unfolds in a context that serves the public good. To be sure, few would wish to return to an era before vaccines, running water, and the Internet; and broadly shared growth is associated with a wide array of social goods, such as increased tolerance of immigrants and generosity toward the poor (and, yes, better baubles). But, as we’ll see, it does not follow that maximizing the pace of growth should always overrule competing social and ethical concerns.

Cowen’s purpose is to make the case for a “tougher, more dedicated, and indeed a more stubborn attachment to prosperity and freedom.” He admits from the outset that he will be advocating a form of “moral absolutism” that values a “strong work ethic,” yet he also claims that his approach prizes “pluralism,” and that “no single value is a trump card which overwhelms all other values in all instances.” He wants to convince us that maximizing the rate of growth is wholly compatible with a commitment to all (or most) conceptions of the good. Yet one does not write moral philosophy without smuggling in one’s own biases, and in Cowen’s case, utility and liberty trump equality. Like so many economists, he is a committed utilitarian (though he describes himself as a “two-thirds utilitarian,” because he makes some allowance for “common sense morality”), arguing that “[I]f one growth path is consistently higher than the other over time, we should prefer that higher growth path.”

On the pressing issue of climate change, this deep time horizon could serve as corrective to the standard economic modeling—such as that of the recent Nobel Prize in Economics recipient William Nordhaus—which discounts the current value of future consumption (and, by extension, future generations of humans) in calculating a carbon price. By potentially underestimating the future costs of climate change, this approach lends itself to a dangerous complacency. Yet framed in such vague terms, Cowen’s own prescription is hardly dispositive, because his argument does not clarify whether it is better to pursue effective but “inefficient” climate policies at the expense of growth in the present, or to grow our way out of the problem in the future. Reasonable people can and do disagree on this very question.

For his part, Cowen would also have us “induce a higher rate of technological innovation” across the board. But his argument for innovation is one-sided. He asks us to consider a scenario in which human civilization is destroyed because it has not undergone enough growth to have developed the means of averting an asteroid. In contrast, he does not suppose that the technologies borne of continuous growth might themselves destroy us. In an era of accelerating nuclear proliferation, unregulated artificial intelligence, Facebook-facilitated genocide, and new advances in the extraction of fossil fuels, this is a glaring omission.

At times, Cowen’s faith in growth verges on fundamentalism, such as when he promises that it will resolve not just political and social dilemmas related to material scarcities, but even moral ones. Once we have reserved a place for basic “human rights” and applied “a rule of ‘maximize the rate of sustainable economic growth,’” he contends, “most of the remaining morality will be practical in nature, prone to exception, dependent on context, and not exercising much of a tyranny over our lives.” But beyond a passing mention of “women’s rights, freedom of choice, the fight against poverty,” Cowen does not offer concrete examples of the moral disputes that he expects growth eventually to resolve. There are some who believe that abortion is “murder,” and there are others who regard bans on abortion as, well, a form of moral “tyranny over our lives.” Economic progress in itself will not resolve this dispute, nor any other that is based around incommensurable ethical values.

Were a government to adopt Cowen’s decree to “worship no other gods [but] Growth and Human Rights,” it is hard to see what role democracy would still have to play in economic affairs. He assures us that his growth maxim simply means pursuing “outcomes with a preponderance of benefits over costs.” Yet in another notable omission, he does not specify who would conduct such cost-benefit analyses. As the “debate” over the 2017 tax cuts made clear, partisan experts cannot be trusted to find a middle ground even on basic macroeconomic questions. That leaves only the technocrats—or perhaps even an algorithm—to determine what level and mode of growth qualifies as “sustainable,” and to administer the necessary macroeconomic policies.

Though Stubborn Attachments is presented as a work of moral and political philosophy, it tends to gloss over issues that have long concerned others within that tradition. Thinkers since the Enlightenment have been debating how best to organize societies in which nominally free individuals hold different conceptions of the good. Few have doubted that there is any arrangement without tradeoffs—between liberty and security or equality; collective and individual ends; work and leisure—or without inherent limitations on what it can deliver.

Cowen wants us to believe that rapid growth is a “free lunch,” comparable to the “Crusonia plants” in Daniel Defoe’s 1719 novel Robinson Crusoe (the reference, in economic terms, comes by way of the twentieth-century economist Frank Knight). “Yield[ing] fruit for nothing,” Cowen observes, the plants require “no labor or effort from Crusoe or anyone else.” But this is a perilous allusion for Cowen to invoke. The only reason that Crusonia fruit are abundant is that Crusoe is alone on the island. That is why earlier thinkers such as Jean-Jacques Rousseau used Defoe’s novel as a template for contemplating “man in nature,” a theoretical prelapsarian state before the emergence of civil society. Justice, morality, virtue, vice, and politics mean nothing to such a person, and are reified only after he or she comes into contact with others—that is, with society. Were Crusoe’s island to be populated by thousands of other castaways, the free lunches would become contested goods; a social contract would be required to establish property rights and manage production and distribution of the fruit.

Nor does Cowen offer a persuasive response to common critiques of utilitarianism: that maximizing the sum total of happiness is not the same thing as maximizing the happiness of individuals and that “happiness” itself is a concept comprising incommensurable and incompatible elements. As with any system built around a single maximizing principle, Cowen’s normative framework behooves each participant to prioritize her own productive efficiency over any other competing value. It is this single-mindedness of the growth prerogative that led the early twentieth-century economist Arthur Pigou to worry that “efforts devoted to the production of people who are good [economic] instruments may involve a failure to produce people who are good men.” An education system geared toward the needs of production, a life spent at the factory or office (or in one’s inbox at home)—these are not the ingredients of engaged citizens, attentive fathers or mothers, and the like.

Going further, Émile Durkheim, a contemporary of Veblen, saw in collective progress the possibility for widespread suffering (anomie) at the level of the individual. Because material and social expectations naturally rise in response to increased resources, Durkheim argued that in the absence of the social and moral restraints once imposed by formal religion, craft guilds, and other institutions, one’s wants would constantly outpace one’s means. With the good jobs, desirable neighborhoods, and best schools eternally in flux, he predicted that most people would start to assume that “it is human nature to be constantly discontented, to keep pressing forward without pause or rest, towards an indeterminate goal.” Unlike Cowen, who is convinced that the moral arc of economic growth bends toward justice, Durkheim thought more attention should be paid to the “moral danger that follows any increase in wealth.”

Because Cowen’s ends lie perpetually in the future, it is easier for him to dismiss the shorter-term costs of rapid development. Yet even if one accepts those tradeoffs, his argument still does not account for the inherent limitations of market-driven growth itself. As Fred Hirsch shows in his classic 1976 treatise, Social Limits to Growth, ever-increasing output will never satisfy individual wants, because in a post-subsistence economy, such wants are both socially determined and subject to social, rather than material, scarcity.

Hirsch’s point would not be lost on the wealthy parents who decided to bribe prestigious universities to accept their mediocre children. Insofar as a college degree serves as a professional credential with which to secure a “good job,” it is subject to the iron law of supply and demand. Because more college-degree holders makes for more selective employers, Hirsch expected jobs that once required a high-school diploma suddenly to demand a bachelor’s degree; that companies would tighten their qualifications and begin sorting for master’s degrees and candidates from top institutions. That is precisely what has happened.

Like Veblen and Durkheim, Hirsch concluded that most people have no choice but to play this game, because the costs of “positional” competition are externalized. The more people there are purchasing their own car or sending their children to exclusive private schools, the less demand there is on politicians to fund public transportation and education. As public goods erode, still more households are forced to work toward the new private goods, just to retain a baseline standard of living. Cowen’s growth prerogative offers no way out of this dilemma, because it is precisely these insatiable appetites that drive the growth engine in the first place.

Finally, there is the matter of work and leisure. In The Joyless Economy (published the same year as Hirsch’s book), the economist Tibor Scitovsky concludes that households living under such conditions will privilege the acquisition of immediate material “comforts” over the mastery of intrinsically valuable “life skills.” Such comforts, Scitovsky observes, offer only fleeting stimulation, requiring constant wage-earning to maintain. But the alternative—honing a talent for its own sake—generally takes time that one does not have, given the temporal constraints of the modern labor market. The growth imperative thus forecloses on one of the most promising paths to human flourishing: the cultivation of a talent from which one can derive an intrinsic sense of purpose, come what will.

Although Cowen frequently makes a point of mentioning leisure, his normative framework does not actually allow for a maximization of activities engaged in for their own sake. He lists leisure time as a factor of Wealth Plus, but he does not offer any ethical principle for determining how the individual components of that concept should be ordered. As such, one might conclude that Wealth Plus can be maximized by maximizing leisure—by converting all marginal productivity gains from growth into reduced work hours indefinitely.
Would the widespread pursuit of self-selected activity under conditions of abundant leisure benefit future generations? We cannot possibly know. It would certainly offer an opportunity for “cultivating human reason,” which Cowen identifies as the key to growth. But it also would require a revolution in social attitudes regarding work, “free riding,” and one’s “contribution to society,” as well as a significant expansion in the public provision of health care and other services, and a reduction of the power of employers vis-à-vis labor.

Cowen, in any case, would reject the premise. Our moral duty, he would say, is to maximize the rate of economic growth in perpetuity over the long term—and the best way to do that is to keep punching the clock. By asking us to ignore the effects of utilitarian objectives on the integrity of the individual, he has distilled the ethics of the current era perfectly. Just as markets always clear, individual and collective interests are always reconciled. Here, the good life is implicitly defined by endless competition in pursuit of insatiable desires; happiness must be sought outside the self, for many will not have time to develop it within.

Ironically, Cowen acknowledges the psychic costs of the prevailing dispensation, writing, “However psychologically troubled our modern, wealthy societies may seem, poverty is not the solution to these problems, and in fact it makes them worse.” But, of course, poverty is hardly the only alternative to Cowen’s model. Other options include Amartya Sen and Martha Nussbaum’s “capabilities approach,” which subordinates the utilitarian objective of aggregate output to the Kantian one of ensuring “substantive freedoms” for each individual to “lead the kind of life [they have] reason to value.” Similarly, in these pages, the progressive economist Gene Sperling recently outlined a growth model based on “economic dignity,” derived from measures of “health care, college opportunity, second chances, affordable housing, environmental quality, and worker participation.” And, going further, the philosopher Martin Hägglund’s groundbreaking new book, This Life: Secular Faith and Spiritual Freedom, offers a vision of democratic socialism in which free time is the ultimate social and economic maxim.

The prospect of working less—and prizing personal development over consumption—represents a happy compromise in a world that still needs both growth (in green energy, medicine, and other sectors) and better methods for managing the effects of change on the individual in the here and now. Insofar as there is wealth in free time, there is enough to go around. The leisure class awaits.

Read more about EconomicsgrowthTyler Cowen

Stuart Whatley is Deputy Editor at Project Syndicate. You can follow him on Twitter @StuartWhatley.

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