Monday, April 23, 2007

Conspicuous Wealth

So, there I am, 80 degrees, beer in hand, swaying palm trees, sitting beside the pool at the lovely Palm Springs Tennis Club. The very picture of conspicuous consumption. Except:

Believe me, the irony of all this was not lost on me.

In the article, Reversal of Fortune, in the latest Mother Jones, what we value and what we work for are explored.

Is our sin in getting away and living a little or in the exact opposite (not taking the time to enjoy life)? We work harder to get more things that we enjoy less and less.

"...according to new research emerging from many quarters, that our continued devotion to growth above all is, on balance, making our lives worse, both collectively and individually. Growth no longer makes most people wealthier, but instead generates inequality and insecurity. Growth is bumping up against physical limits so profound—like climate change and peak oil—that trying to keep expanding the economy may be not just impossible but also dangerous. And perhaps most surprisingly, growth no longer makes us happier..."

Every day is a battle to determine exactly what our role should be. Should we feel guilty for occasionally letting our hair down? I don't think so, but as we walked around Palm Springs and watching people and cars and house, I couldn't help feeling that something was just off-kilter. Most people didn't seem to be there to enjoy themselves or to relax. They were there to prove that they could be ... to show off. Young trophy wives. Rolls Royces. Maybe I'm just being cynical. We were there to enjoy ourselves ... and we did. We weren't trying to impress anyone.

We try and make a trip to San Diego or Manhattan Beach every year. Nothing fancy. Sometimes stay with relatives. Sometimes get a simple condo. Are we trying to impress someone or are we making these trips because we have fun? Would our money be better spent by saving or giving to charity? Sure. But we do both of those things also. I don't know what the right balance is. I just know that we're constantly re-evaluating exactly what that balance should be. That's all that anyone can do, I guess.

Classic economics would say that if we are spending money, then we should be happy. Our economy has been built on the model that if we are producing and buying and selling, all is good. But is that model still valid?
"...An orthodox economist has a simple happiness formula: If you buy a Ford Expedition, then ipso facto a Ford Expedition is what makes you happy. That's all we need to know. The economist would call this idea "utility maximization," and in the words of the economic historian Gordon Bigelow, "the theory holds that every time a person buys something, sells something, quits a job, or invests, he is making a rational decision about what will...provide him 'maximum utility.' If you bought a Ginsu knife at 3 a.m. a neoclassical economist will tell you that, at that time, you calculated that this purchase would optimize your resources." The beauty of this principle lies in its simplicity. It is perhaps the central assumption of the world we live in: You can tell who I really am by what I buy.

Yet economists have long known that people's brains don't work quite the way the model suggests. When Bob Costanza, one of the fathers of ecological economics and now head of the Gund Institute at the University of Vermont, was first edging into economics in the early 1980s, he had a fellowship to study "social traps"—the nuclear arms race, say—in which "short-term behavior can get out of kilter with longer broad-term goals.""

"...We all know in our own lives how irrationally we are capable of acting, and how unconnected those actions are to any real sense of joy ... "

"... Since happiness had increased with income in the past, we assumed it would inevitably do so in the future. We make these kinds of mistakes regularly: Two beers made me feel good, so ten will make me feel five times better ... "

So, that's what it comes down to. More is not always better. Spending does not equate to happiness. Taking it easy and spending time with family and friends does equate to happiness. It's about doing things for the right reasons and not living beyond your means (or the planet's means).

"Wealth is the ability to fully experience life." -- Henry David Thoreau


Sadie Lou said...

What a timely post, dback. Dan and I have two houses and we can't sell one of them. We're in trouble but we haven't lost hope: The hope is--we don't need to be house rich to be happy and home ownership does not define our success.
We just learned this.
I'll keep everyone updated but we're probably going to have to get out of dodge other words--we played the real estate game and we lost our butts.

dbackdad said...

I am so sorry that you guys are having trouble with the houses. They always talk about the joy of home ownership but they forget to mention the headaches. Having a healthy attitude and great family (like you do), you will survive anything. If you ever need anything (and I really mean that), let us know.

One of these days, I would really like for us to meet you guys. Maybe one of these trips to Cali will take us to the northern part sometime. It looks like you guys really live in an awesome area. Being the tree hugger that I am, there would be no shortage of things to do up there.

Sadie Lou said...

That would be swell. Let me know when you guys are planning a trip and we'll arrange a dinner! Thanks for the offer of support. Thankfully, we know that Cali is the most expensive state to live in and so if we ever do want to buy again, we can just go to another state. How's the market where you're at?

dbackdad said...

It used to be fairly inexpensive but we had a huge housing boom in the last couple of years. We were the fastest growing county in the country last year. So, prices went up pretty good. We were lucky to have bought into our current house a few months before it started going up. Now, the market's pretty tight and has corrected itself quite a bit. Right now, it's hard to sell a house just about anywhere in the country.