The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950 (review)

This book might suggest itself as a successor to John Kenneth Galbraith’s 1958 Affluent Society or as another example of an economist reaching out to a wider audience to challenge that profession’s habitual blindness to the “externalities” of market transactions, as has been attempted by Tibor Scitovsky, Robert Frank, or Juliet Schor. Noted Oxford economic historian Avner Offer offers instead a rigorously economic treatment of his themes, focusing less on a historical argument about the impact of riches on self control and well-being than on identifying economic models, statistical measures, and terminology for addressing a potpourri of issues loosely related to his themes. Those who have forgotten their economics (or never learned) will be frustrated by his references to the substitution effect and prisoner’s dilemma, not to mention income elasticity and hyperbolic discounting, but the persistent reader will find much of value.

Not only is there a treasure trove of information about everything from inequality indexes and obesity rates to comparative costs of advertising and the economic causes of increased divorce, but also a striking indictment of growth for its own sake and the ideology of unrestrained choice. Offer shows (as have others) how personal happiness seems to cease increasing with a high level of affluence because it leads to a bias toward novelty that devalues both the past and social relations. It also satiates, raising the cost of further gratification. Far from being inherently rational—as many of Offer’s fellow economists insist—consumer choice leads to “myopia,” the forgoing of prudence for immediate gratification in a growing and confusing welter of purchases. A market bias toward sensation and novelty reduces commitment to personal and social betterment (and this has been exacerbated by the trend since the 1970s toward deregulation and tax cuts for the rich, a phenomenon partially caused by the individualistic imperative of affluence itself). Of course, an “economics of regard”—Offer’s term for our need for love, respect, and sharing—has survived in the face of the rise of market society. And he also claims that with education and accumulated assets, self-control strategies are more easily obtained, leading to optimized choices. I wonder.

Unlimited growth has increased the tendency to dine out and alone, thereby leading to “aroused” eating patterns. It has also led to greater inequality and weakened social bonds—hence the growing incidence of divorce and the more frequent choice among privileged women to forgo childbearing even as poor women lacking marketable skills choose to bear more children. (Offer seems to neglect fathers.) Others have already said much of what Offer says here (though without his statistical evidence), and some readers may be disappointed with his tentative proscriptions: he is concerned about advertising, for example, mostly because it leads to skepticism and electoral dishonesty. Perhaps too often his themes get lost in a series of interesting and very well-researched but not integrated essays, on the American car industry in the 1950s, on the dissemination of household appliances, on the economics of mating. And his claim is certainly questionable that the “enormous increments of income” that are required to raise the “happiness” levels of executives explains the runaway rise in their income (p. 245). Moreover, the comparison between the United States and Britain—with the lag in British affluence used to explain the impact of abundance, and the continuing difference attributed to “culture”—is at many points vague and unpersuasive.

Still, in the conclusion Offer raises some very powerful points. Affluence may have liberated people from the uncertainties of subsistence, but much more moderate levels of abundance would have led to optimal happiness. Choice is fallible and, in competitive markets, short-term pleasure trumps long-term commitments. With increasing inequality, rising income is purchased with longer working hours and the sacrifice of family life, and the uncertainties of income and...