Serious social, political and economic trends are now taking place in what are called the developed countries such as America, Japan and Western Europe. This pamphlet asks whether economic growth as we have known it can continue.
Many opinion surveys in the developed countries of the Western world have shown consistently that social satisfactions have been declining steadily since the 1980-90s period, especially among the prime working and creative groups -- the young adults. Birth rates are plunging in all developed countries. A large underclass associated with social isolation, poverty and crime is growing. Community life has all but disappeared for most. Educational standards are dropping and teachers are no longer held in high regard. The care of old people in the coming years is already being forecast as a serious problem. Generally, there is no longer the sort of social cohesion that used to characterise the nation-state and we are becoming divided into classes, age groups and consumer specialisations as never before. Turnouts at elections are steadily declining from decade to decade, particularly by the young who, by and large, have little interest in politics. Governments of whatever political complexion are increasingly distrusted. Rightly or wrongly, politicians are seen as feathering their own nests and are held in low public esteem.
Economic trends are equally disturbing. Most developed governments' budgets are in deficit and no government has prudent financial plans for the adequate support of old people in 10-15 years' time. Income disparities have grown along with an employment structure which is increasingly dividing between high skills and low skills. General consumer spending is being sustained these days, not by prudent saving, as in the last century, but by taking advantage of inflated house values. Also, the conveyor belt of consumer goods has been accelerating in the last 200 years by the supply of increasingly cheap energy which understraps the production process. This supply of cheap energy is now coming to an end with the decline of oil and natural gas supplies. There are no adequate alternative energy technologies immediately in sight. Remaining fossil fuel resources are facing increasing demand from far more populous countries which are now industrialising -- and fast!
So far, economic theories have not yet explained why economic growth has taken place. All economic textbooks take it for granted without attempting to explain why growth occurs. Accordingly, if economic growth in the developed countries starts failing, as it seems to be doing now, then conventional economists are non-plussed. However, this pamphlet has the audacity -- some might say the
chutzpah -- to explain growth by means of an evolutionary-economics hypothesis. If my hypothesis is wrong, this will be testable in the years immediately ahead. If it proves to be nearer to reality then my hypothesis has clear implications for the future. These involve understanding the reasons for the incessant demands for consumer goods hitherto and, if possible, to restore a more sustainable situation. What I foresee -- the gradual dissolution of our present high-commuting metropolitan-based and a radical re-clustering of workplaces and homes -- would have taken place anyway, but will be increasingly forced upon us by higher fuel costs from year to year from now onwards.
DISCUSSION
1. Status goods -- or, more correctly, stratum goods
Economic growth is fundamentally driven by consumer demand. My hypothesis argues that, during any one historical period, consumer demand importantly comprises some extremely important 'key' goods. These key goods, besides being intrinsically attractive or useful, also happen to be scarce and high-priced, affordable only by the better-off -- that is, those who have high status. These goods are more usually termed 'status goods'. Because such goods are associated with high status, then their acquisition is eagerly sought by other up-and-coming individuals in order to show that he or she has the abilities and finance to join the circle. These days, when some individuals can be lucky and acquire wealth accidentally -- such as winning a lottery -- having the finance to buy high status goods doesn't always automatically admit the lucky to the higher ranks. A certain amount of intelligence, or tact, even humility -- a sort of 'apprenticeship period' -- is required so that the
nouveau riche individual also acquires an acquaintance with the 'rules' of the new culture before he or she is acceptable. But, generally speaking, and particularly for those who have genuinely risen through the ranks by showing ability and sufficient financial viability along the way, acceptance in higher ranks is only a matter of time.
By way of a brief diversion, I will describe just one exception to this general social trend. Not everybody wishes to acquire goods in order to consolidate one's status or to demonstrate that one is aiming for a higher one. Here I am talking of the scholar -- perhaps one person in a thousand or, more likely one person in ten thousand or more -- who has a sense of curiosity beyond the norm and is not primarily interested in playing the normal status game. One important point about these rare individuals is that they usually seek out others of their own kind to spend their time with. As a consequence, they also establish a rank order that is much less based on ownership of material goods and much more on intellectual merit. However, such individuals are not usually totally isolated from the broader social world and, in fact, it is precisely these individuals who usually create the new goods as 'spin-offs' from their ideas. For this reason, intellectuals are usually accorded a sort of honorary membership of the higher ranks of ordinary society because their value is intuitively recognised. Indeed, it is those cultures in which scholarship is valued more than most which also happen to be the most materially prosperous. One can think immediately of the Chinese and Jewish cultures as outstanding examples in human history.
However, the sort of status goods that I am concerned with are those which, more strictly, I will term 'stratum goods'. These are to be distinguished from other sorts of status goods -- luxury goods. These are either rare hand-made consumer goods such as Fabergé eggs or diamond tiaras, or rare property goods such as historic mansions or private secluded beaches -- the latter being what Fred Hirsch, the late economist from Warwick University who died lamentably young, called 'positional goods'. The production of luxury goods or the existence of positional goods is always severely limited. In contrast, however, although stratum goods may be scarce and high-priced when first made, they have the property of being able to be mass-produced. When they first appear, they are of course appropriated by high status people -- the same who buy luxury goods or who live in grand houses -- but then, with wider production, they become affordable by those who are not-quite-so-rich. They are bought, not only because they have intrinsic merits -- such as novelty or usefulness -- but, more importantly, because they signify that a higher status is now available. Examples of such stratum goods in the last century which offered social progress as well as new perceptual experiences or relief from physical drudgery include radios, cars, washing machines, hoovers, cinemas, television and foreign holidays.
As they were increasingly mass-produced, such stratum goods became successively cheaper and were able to be afforded by lower socio-economic levels of society -- thus giving consumers the satisfaction of a higher status than they had before or, in cases where one's friends and neighbours had already bought them, showing that they were still full-blown member of their community. Thus, as far as economic growth is concerned, the distinctive property of stratum goods is that, after their first tranche of sales to the better-off, they are subsequently able to be mass produced at successively lower prices until they sweep through the whole population down to the poorest. However, in what follows I will normally refer to stratum goods as status goods alone and ignore the rare categories of luxury goods and positional goods.
This desire to acquire status or to 'keep up with the Jones' is not to be considered a pecadillo or to be sniggered at. The achievement of a certain status in the community is a powerful social force in human nature. It is not acquired by the purchase of certain consumer goods only, of course. There are many other methods of acquiring status -- such as by reaching formal ranks in organisations or by having special skills which are appreciated or needed by others. But for most people, most of the time -- and increasingly so in the modern world -- the acquisition of key status goods is the easiest and most visible way of signalling one's rank and membership in a particular community.
All goods -- except food -- have been stratum goods when first introduced. Even red oxide pigment or carefully matched sea shells, when traded over long distances at least as long as 75,000 years ago and acquired by the leading males of the tribe or group to be used, probably, for bodily ornamentation, were stratum goods once. Such ornamentation would have been able to signify status in exactly the same way as a general's epaulettes or a sergeant's stripes does today. From then onwards, all sorts of scarce goods would have been signs of status. Silk was the ultimate status good in Roman times (and they were desperate to know how the Chinese made it!) Even pepper and nutmeg were status goods in 16th century Europe, and originally purchased by the rich at very high prices after dangerous sea journeys from Asia.
However, as status goods become increasingly available and more widely purchased, they gradually lose their exclusive cachet and become ordinary household goods. Such, for example has been the history of the radio, car and TV and other items throughout the last century in Europe, America and Japan. There were, of course, many hundreds of other such status goods in the previous century and the centuries before that. High priced and eagerly sought to start with they all became humdrum and, in many cases, quite trivial in due course.
All this is, in reality, a mighty economic machine that sparked into life in earliest days of
homo sapiens. Why should this be so? The answer is that status is deeply instinctive in mankind's genetic make-up.
2. The importance and ubiquity of rank order
It is, of course, not the case that we have specific 'status genes' in our DNA. It is rather more that the behaviours that have co-evolved with successful gene mutations due to our environmental circumstances for millions of years lead us automatically to position ourselves within any group we find ourselves for the sake of social stability. The first thing that we do when meeting a new person is to ascertain his or her precise social level. Indeed, in Japan, probably the most formal society in the modern world -- but no different in principle from other cultures -- an honorific grammatical form called keigo must be used in polite society according to the particular social level of one's conversationalist. However, in all human societies, there are equivalent forms of status assessment and address by means of subtle behaviours or manner of speaking or the clothes one wears.
And the reason for this goes back to the millions of years in which our species and predecessors lived in quite small groups or tribes. Social stability in the group and instant order for defence in emergencies could only occur in a reasonably rank-ordered group capable of acting to command. In this we are very similar to those of our primate cousins who also live in small groups and have been moulded by very similar circumstances -- the chimpanzee, bonobo, gorilla, baboons and a few more. This is not to say that such rank order is arrived at peacefully or in a rational manner. In the pre-puberty years of boyhood, fighting probably occurs more often than not, even between friends. Vigorous perhaps, but not necessarily vicious or injurious, this helps to prepare the males for adolescence when status starts to become seriously important. And then again, from time to time, when the experienced leadership of the group becomes doubtful through declining powers or old age, young men, either singly or in political association, will attempt to take over the leadership and establish a new rank order. This happens quite as brutally in modern politics. Politicians constantly use terms like 'fighting' and 'struggling' in public speeches in order to enhance their leadership role, while metaphors such as 'back-stabbing' and 'poisoned chalices' are used for what goes on between them behind closed doors.
But there is yet another very important reason why rank order is important. Sexual selection is increasingly being seen by evolutionary scientists as the predominant method by which the fittest of a species have survived and thus able to produce children to carry forward their genes. Assessment of the rank-order and status of the young males is the main method by which young post-puberty females choose unattached males as future partners. Whenever possible, girls will select the highest ranking available male because he is likely to have more-than-average ability to protect her, give her food and provide security for her children. Females will always try to partner or marry upwards in terms of perceived intelligence, abilities and social ranking. They generally succeed, too, leaving the least able males to remain childless.
This leads, by way of parenthesis, to a speculative thought as to how the very first trading ever took place between adjacent hunter-gatherer groups who normally -- from what anthropologists observe -- are usually in a state of mutual tension and frequent warfare. However, in the case of all the primate species, these periods of animosity are broken by periods when adolescent females or males, leave the group to seek partners in other groups. All primate species are either 'patrilocal' (where the adolescent females leave), or 'matrilocal' (where the young males leave). This is necessary to avoid inter-breeding and the danger of fixating dangerous recessive genes. Man is patrilocal, as is observed in all hunter-gatherer groups but also in marriage customs in most traditional societies where, usually, the females are married in the culture of males' group. Another modern example of this in England is the much great migration of females from the north of England to the more prosperous south.
Apart from these migrations of girls, the very earliest hunter-gatherer groups of mankind would have been entirely self-sustaining and autonomous, whether they were territorial or nomadic. They had no need for trade because they had everything already -- or they would not have been viable in the first place. However, if a father in a group saw some highly desirable ornamentation or tool that a male in another group possessed -- in one or other of their frequent tribal confrontations perhaps -- then he could have kept his daughter back from migrating unless the other male agreed to trade his possession for the girl. In my view, this is probably how trade actually first started. Much later, when man started to migrate
en masse into more inhospitable regions where some basic necessities such as salt were absent, then trading in salt would have been necessary. But, given the mutual animosity that soon arises between different groups -- even if had budded from its neighbour -- trade would already have had to have been well and truly instituted. In my view, trading would have started only for reasons of acquiring stratum goods -- and a succession of such goods would have always been important from then onwards -- but trading in some basic goods would also have been necessary when man began seriously migrating into the rest of the world from their originally benign habitats with a full repertoire of resources.
So, by working backwards to our evolutionary beginnings we can see that status -- and the ownership of status goods -- is not a trivial behaviour but quite deep within us and very closely associated with sexual choice on the part of the female and sexual activity on the part of the male. Its central importance cannot be emphasised enough. Aristotle Onassis, the Greek billionaire ship-owner put the point crudely -- but accurately -- when he said (and when he was old and ugly!), "What's the point of being rich if you can't have the most beautiful women you want." Even though sex is scarcely ever mentioned by economists, and although they normally eschew talk of political power and status (with the notable exception of Thorstein Veblen), they are both there, all the time. In short, status drives society and status goods drives economic growth.
Status and rank order also drives other human activities besides economic growth and a few words ought to be mentioned here for the sake of completion. For most people, most of the time, rank order and status, important though they are in terms of an individual's feeling of well being and acceptance by the culture immediately around him, they are not obtrusive. It is hardly possible to identify individuals in a particular culture with a precise rank order, as though giving each of them a number. Quite a lot of marginal flexibility is going on constantly, depending on what may be happening to occupy the community at that time. Indeed, this was a serious mistake that many anthropologists, such as Margaret Mead, made when they first began to study earlier forms hunter-gatherers or simple agrarian communities. Many of these were often described as libertarian, easy going and democratic. They usually had a chief person (of course) but, by and large, status and rank order appeared to be absent from these societies. But this was only because such early anthropologists didn't study those societies for long periods and, usually, were not experiencing any undue stress. But anthropologists since the earlier part of the last century have learned that in order to know exactly how a particular society ticks, then they must spend a long time with them. It is then -- and perhaps when an emergency happens -- that rank order and status becomes very clear. No anthropologist has yet discovered a society in which there is no hierarchy.
And it is nearly always a male hierarchy, too. Even in cases where there have been female queens, or prime ministers -- however gifted or able they are -- have always needed the close support of strong, high-ranking males. In some societies which appear to be matriarchal this is only because most of the normal everyday decisions are those which the females normally take. As will be mentioned later, females' brains are better at certain problems and often take decisions in matters in which males are not competent. I am at the present time moving house and am stuck in a chain of four sales which has become very protracted and complicated. What is interesting is that all along the chain, it is the females concerned who are nursing the process along. Had it been left to the males, everyhting would have exploded long before now. A fascinating example occurs in Robert M. Sapolsky's book
A Primate's Memoir, this time concerning baboons. Unlike man, baboons are patrilocal -- that is, it is young males who leave the group after puberty. They spend a few years in bachelor gangs until they acquire sufficient adult skills maturity to enter another group, establish their rank and be selected by a female. In this case, a fairly recent -- but aggressive male -- had quickly become the alpha male. One day he was leading the group on a foraging expedition to a feeding ground. Immediately behind him was the eldest female -- that is, the one person in the group who knew the food potential of the terrain more than anybody else. At one point while the leader was heading in one direction she abruptly headed off in another and the rest of the group followed her! The pack leader, however, unknowingly proceeded by himself and was observed by Sapolsky as not only having poor foraging that day but became increasingly agitated in the course of it that he'd temporarily lost control!
Finally a couple of important points -- not strictly of economic importance -- should be made about rank order as we have inherited it from our and our predecessors' earliest eras. The first is that a group cannot afford to be incessantly squabbling about rank order among themselves. Typically, when an existing leader is overthrown by a younger male, quite a number of other consequential changes in rank order may result -- particularly if the new leader has close associates who gained a higher position simultaneously (and who are often essential in the support of a new leader). It would be necessary then for the group to settle down and to accept the situation for the time being, and not prolong the stressful situation. If one group was permanently at war with itself and thereby stressed and weak, then an another more disciplined group in adjacent territory would certainly have taken advantage. We therefore have this apparently schizophrenic quality of having leadership contests, sometimes quite violently, but then accepting authority in the changed situation. We are capable of switching quickly from violence to deference. And, of course,
vice versa when a leadership becomes overbearing.
The last important point to make in this section is that in former hunter-gatherer times, leadership was always visible and accessible. Despotic leadership is bearable in principle if, at the same time, the circumstances are such that it can be brought down relatively easily when it becomes too oppressive. Unfortunately today, most governments are so centralised and protected that they are far removed from being accessible by ordinary people for purposes of replacement. Totalitarian regimes, such as those of the former Soviet Union under Lenin and then Stalin, and the sort of China that emerged after the 1949 Revolution under Mao Zedong, are almost impossible to change. These dictatorships lasted for decades at great cost to the lives of scores of millions of people in all cases. On a lesser scale, this has been repeated, and is still being repeated, many times in several countries. This doesn't have any direct relevance to my hypothesis, but it is useful to mention that, usually, hard-to-remove dictatorships also wish to control the economy as well as the government and army. They can't contemplate the idea that some individuals might become rich and thus acquire power. Such dictators are usually enemies of the free market. As a consequence, countries suffering from dictators not only suffer from the raw application of political power but almost invariably their populations suffer additional economic hardships.
3. The economy from the consumer angle
The above introduces my case. Status is tremendously powerful and correspondingly important in the whole social and economic scheme of things. In modern society there are many ways in which status expresses itself -- intellectually, artistically and so forth -- but the usual one for most people is the possession of a full-time job with a respectable income with which status goods (and services) of certain sorts and grades may be bought. For most males after the age of puberty, this is the impetus that keeps them learning skills -- legal or illegal, parasitic or constructive -- that will give them the entrance to the adult world and a respectable status within it.
I am making the astonishing claim that all goods, except food, have been status goods at one time in the past when first conceived by an innovator and subsequently desired by a customer. To us today, the status goods of former times, such as red oxide pigment for bodily ornamentation in the earliest days of man, or spices in 16th century Europe affordable only by the rich, seem absurdly trivial to us today. But in their own time when they were first introduced they were equivalent to owning a Porsche or a luxury yacht today. This trick of adding status goods to one's person or possessions in order to enhance status -- preferably visibly -- probably goes back to our very earliest days when man's DNA first broke away decisively from what went before.
Status goods may be desired for their relative rarity, or perceptual novelty or sheer physical usefulness but they only become status goods by virtue of their scarcity and high cost to start with -- thus becoming the exclusive possessions only of the highest ranking males (and family) in his particular group or society. In relatively modern times -- say, from the 16th century -- as an avalanche of status goods started to be produced in Europe, mass distribution and increasingly cheaper prices meant that such goods could successively make their way downwards from the rich through all the socio-economic strata until they become ordinary consumer goods in normal everyday life. Most of them become the young man's essential entrance tickets to the adult community around them. These days such goods have become so cheap that young couples start their married life with a houseful of them, whereas in the last century, when they were new and relatively expensive, such possessions took a lifetime to acquire. Indeed, former status goods have become so common that some of them become inextricably intertwined with the normal process of daily life and our economy -- that is, they become necessities. The motor car is a good example. Modern society and economic life in the developed countries would collapse without wide ownership and daily use of them.
Because status is so important and so pervasive in almost every aspect of human behaviour and certainly in all institutions -- in politics, army, religion, business, civil services, academe, and even in the poorest peasant communities and concentration camps, etc -- then the conveyor belt of status goods will always be necessary according to present assumptions by economists. Usually, status goods are rare and expensive to start with but the status goods that are of importance in an economy are those which can be successively mass-produced and made cheaper from year to year or decade to decade. Those which are not mass-producible -- usually known as luxury goods -- will always remain as rare items and have no significant continuing economic impact as consumer-status goods.
The supply of new status goods, which are then able to be mass produced, is therefore the main impetus driving man's economies since the beginning. Without economic growth -- or constant innovation in the production process -- then modern economies will not only falter but fail because of accumulating inefficiencies and frictional forces (such as bureaucracies and protective practices). I believe that my proposition will be testable in the years immediately ahead because no new status goods seem to be turning up. One rather ominous portent of this is that almost all the new consumer goods of today which might have qualified as high-priced status goods in times past are now produced in such large numbers
ab initio that they reach mass sales almost immediately and soon have the same low profit margins which characterise ordinary consumer goods. Typically, modern consumer items -- such as digital cameras or flat plasma TV screens -- become status goods only fleetingly and soon become quite low-priced and ordinary. Such manufacturers join other mass producers of ordinary goods, such as cars, who now skate on the edge of bankruptcy from year to year and can only save themselves by temporary up-market variations on their usual goods. Without SUVs (sports utility vehicles) General Motors in America, one of the largest businesses in the world, would have been in dire straits in recent years (and may well be so in future years when petrol-guzzling SUVs go into decline).
4. The economy from the producer angle
The above section summarises our economic system from the consumer angle. The motivation for status described above is very similar to those of our near-DNA relatives -- the chimpanzeee, bonobo, gorilla, baboon, etc. But what about the production side? It is here where we are distinctly different from our primate cousins because they certainly don't go about finding and using goods to show their status level. They use physical force, or guile or diplomacy (as of course, our politicians do -- even fisticuffs! -- on occasions). The only recorded instance of a physical item being used to promote status was that of a low-ranking chimpanzee described by Jane Goodall in her book
In the Shadow of Man. This chimp found an empty jerry-can and, on thumping it, produced such a frightening sound that all the other chimps in his group kow-towed to him and he instantly became the alpha-male. But then he lost the jerry-can and soon resumed his previous modest place!
On the other hand,
homo sapiens has been constantly inventing new status goods and there is obviously something about our brains which enable us to be so creative. Although our brains are incredibly similar to those of the other primates, it is certain that there are some key differences even though none have yet been discovered -- until perhaps very recently. The advent of new and improved brain scanners has launched what a neuroscientist has recently described as an "immense wave" of research into the workings of the brain in only the last two or three years. Of particular interest is the cerebral cortex -- the thinking part of the brain -- and, even more importantly perhaps, the frontal lobes of the cortex -- the future planning and creative part of the brain. It is already suspected that there are some new types of neurons in the frontal lobes, unique to man and not found in the other primates, but these have not been conclusively elucidated yet nor their functional pathways mapped out.
Be that as it may, our species has been inventing new items from the word go. They may have been useful hunting tools which only the most skilful males of a group could manage to make originally but which would have given additional status. Or the earliest items might have been items which gave status only -- such as red oxide markings or feathered head-dresses (both of which are remarkably widespread in many different hunter-gatherer groups).
Understrapping the production of status goods, particularly when they began to be demanded more widely, was the need for energy that could be added to mere muscle power, or indeed of forms of energy which no amount of muscle power could provide. One good example was the making of pottery which required a plentiful supply of wood for firing. At first a very valuable and scarce item, pottery in the form of simple vessels spread widely throughout Eurasia once the method of making it was perfected. Thus the manufacture of pottery on a large scale would have made commensurate inroads into the forests. Although the destruction of forests would have been minimal in comparison to later hidstorical periods, the use of wood to make pottery was probably the first example of a natural product being used as an additional source of energy (that is, additional to sunlight used for growing food). Since then, tar, coal, oil and natural gas has been exploited on an ever increasing scale.
Although such energy sources are not a fundamental motivation for the production of goods they have become absolutely necessary. Their availabilities are now importantly involved when we try to make forecasts as to the nature of industrial (or 'post-industrial') society in the coming decades. Energy supplies, which are still mainly from fossil fuels at the present time, might become a severe restraint on continued economic growth in future decades, particularly as they become increasingly expensive. But in the immediate future there are other constraints which, in my judgement, have already intervened, causing the conveyor belt of status goods to slow down significantly in the most advanced economies such as America, Japan and Europe. I now turn to these constraints.
5. Testing the evolutionary-economics hypothesis
I am making the claim that my evolutionary-economics hypothesis is the first scientific hypothesis in economics because it has the potential to be clearly testable by events. (In this sense, my hypothesis is similar to Marx's in that he also made predictions -- about the overthrow of capitalism in his case -- which failed in the light of actual events.) Hitherto, the fundamental ideas of economics such as those of J. B. Say (that people have infinite desires for more goods and are able to create their own demand), Adam Smith (supply and demand fall into balance automatically in a free market, specialisation of skills makes for greater efficiency of production) and David Ricardo (trade benefits both parties when each concentrates on its own most efficient methods) appear to be correct and are widely accepted by economists but have never been testable because the necessary large-scale controlled experiments couldn't possibly be arranged.
However, if it can be shown that there are no more significant status goods in the market place -- and thus that there is no sufficiently motivated consumer demand -- then my hypothesis says that the whole economy will go into recession. This applies even if governments inflate their currencies in order to try and create a demand. This was certainly be successful in stoking up an economy in previous times when there were still new status goods available and working their passage downwards through all the socio-economic strata, but government-engendered inflation will not work in what may be already upon us in the already developed countries of the world. Of course, what will tend to obscure and delay widespread economic recession in the already-developed countries (though unemployment among the less skilled will undoubtedly spread) is that in Asia, particularly China, the people there are still catching up -- motivated by much the same status goods that we produced in the last century -- and trade with the developed world will sustain some sectors of the latter.
There is no reason in principle why the invention and supply of new status goods should not continue as it has always done throughout the whole of man's pre-history and history. For example, the prospect of a small family airplane or helicopter is not in itself ridiculous. Many rich people already have them and enjoy them. If they were mass produced -- that is, become stratum goods more specifically -- either of them would be unlikely to cost relatively more than, say the early motor cars of the 1920s and 30s. The ridiculous aspect, of course, is that the middle class and ordinary families simply don't have enough airports accessible to them and, in any case, if everybody used their airplanes then the sky would be a very dangerous place, especially when commuting!
But that example gives us a clue as to why there may be no more status goods in the immediate future. We certainly don't have enough space for many that could be theoretically considered. But, probably even more importantly, we don't have the time to enjoy many -- or even any -- more. Certainly the better-off managerial middle-class which initiate the purchase of status goods, and thus help to start mass production, don't have much time these days with steadily longer working weeks -- 50 or 60 or even 70 hours in America and Japan. In the most advanced countries in the world, America and Japan, the working weeks of ordinary people also have been steadily getting longer from year to year, and even Europeans, who long prided themselves on short working weeks and long summer holidays are now having to reverse recent legislative attempts to restrict working weeks to 35 hours. Astonishingly -- given the strength of German trade unions -- many German firms have already reached agreement for longer hours (that is, with the same final weekly pay) and the French Finance Minister is actively campaigning for the French 35-hour week legislation to be repealed.
If there isn't enough time in the week for Americans and Japanese to enjoy new status goods, what about those goods which relieve physical drudgery and save time? In the last century, there were many labour-saving status goods such as hoovers, washing machines, lawn-mowers and the like. But there is scarcely any arduous physical labour left to the ordinary worker these days -- even the factory worker. Hence the now widespread epidemic of obesity.
In short, it is very difficult to imagine many further opportunities for consumer goods which either relieve physical labour or can offer totally new experiences in the short periods of leisure time that are left to the average managerial and middle-class worker with sufficient incomes to buy them. As far as experiential goods are concerned, it must be remembered that we have only two senses which lend themselves to being entertained. Television takes care of one of them and that can only be watched in our spare time. Radio, music recordings and mobile phones take care of our auditory sense. There are several variants of these but none of these can serve as a status good because, from their very inception, they are modestly priced and have mass sales. Much the same applies to a whole repertoire of innovations, mainly electronic (there is even a direct mail catalogue called
Innovation), but all of these are cheap and have narrow uses -- none of these can come anywhere near the stimulatory power of the major innovations of the last century which offered something uniquely new by way of experience or labour-saving.
The only possible candidate that I foresee might be a powerful consumer good in the future -- although it answers to an instinct even stronger than status -- is the unrejectable organ transplant grown from one's own stem cells. This will give many extra years of personal survival. This consumer good would certainly be an expensive status good to start with and would no doubt become cheaper over time as production methods become perfected. But the technology is probably the most complex of any that man has hitherto contemplated and is still only at the very earliest research stages. It might be 20 or 30 or more likely 40 or more years, before a standard technique is perfected and can safely be offered to the public.
Besides shortage of time, space and limited sensory satisfaction, there is one remaining serious constraint against the sort of successive waves of initially expensive status goods that were so characteristic of the last century. This is that the skill structure has changed radically since then -- and is still changing. Roughly speaking, the skill -- and thus income structure -- of last century's workforce was diamond-shaped. There was a relatively small number of jobs of a highly-skilled nature at the top, which then broadened out to a wide middle-band of medium-skilled jobs and finally more or less tapering to low skill jobs at the bottom. This largely corresponded with the normal distribution of intelligence within a population.
Today, automation and computerisation are pushing larger numbers of people of middle ability downwards into low-skill jobs. Instead of a broad middle band of moderately prosperous consumers, able to aspire to the high status goods of the rich and the professional classes, a gap is now arising. Status goods -- even if any new powerful ones were to be invented -- would not be as able to proceed downwards in a stepwise manner as before. They would have to jump from being high-priced goods with low sales volumes straight down to mass-produced low-priced goods. And this is roughly what is happening today. There is still -- as always -- a great variety of luxury goods for the rich and the upper income classes (and they are given undue publicity in our colour supplements) but these cannot spread downwards. At the same time, the mass of new consumer goods that are now becoming increasingly available are very cheap, usually quite trivial in what they offer, and -- if successful -- have mass sales immediately and confer no status whatsoever except perhaps a fleeting satisfaction that you are now equal to your neighbour in that you have the latest fashion of lawnmover or vacuum cleaner.
6. Is the economy slowing down?
If my evolutionary-economics hypothesis is correct then developed economies are due to slow down -- even before additional stresses are thrown on them by higher energy prices. According to orthodox economists, productivity and economic growth figures are positive in all developed countries. But also, according to these measures, the average consumer of today ought to be enjoying a standard of living at least twice that which he had in the 1980s. Yet average consumers in America are worse off now than then despite the latest PCs or gewgaws that they have now. Even though there have been no new status goods since 1980 to compare with the relatively costly ones of the last century that had to be saved for in a disciplined manner, the average American family now cannot afford the time, expense and stress of raising more than two children. (In Europe, the average family size is nearer to one child now -- and dropping.) More bachelors than ever are living cheaply at home. More women -- especially professionals -- are delaying marriage and when they do marry they delay having their children (increasingly only one) until their late 30s.
The structure of the developed economy started changing radically since about the 1980-90s in ways that no-one can quite understand. Until then, most of the last century was a fairly straight-line procedure of aspirations and a sense of progress. Today, people are more stressed, less happy and increasingly bewildered about the future. The apparently reliable figures that are quoted for productivity and economic growth are, in fact, extremely elusive concepts these days. The figures of economists simply don't match with personal experience, the changing nature of jobs and the actual stresses involved in holding those jobs down and living from day to day. In reality, productivity figures of output per person-hour cannot be allocated unambiguously these days between the different economic sectors within a country. National economic growth figures of added value in these days of international outsourcing and massive cross-sourcing of goods between multinational corporations (mainly between developed nations) includes double-counting. Besides, increasing aliquots of economic outputs --such as expenditure on regulation, bureaucracy, pollution prevention, crime prevention, etc -- while expressed as 'positive' components, are not adding value at all but symptoms of serious deficiencies in modern civilisation.
CONCLUSION
I return to my opening paragraphs. Despite the gloss that many economists place on apparently positive figures from quarter-year to quarter year, a great deal is patently going badly wrong in developed countries. 'Recoveries' in employment are nowhere near what normal growth in employment used to be. Official figures for unemployment disguise many more who are not registered for various reasons. Somehow the whole forward momentum of the last 200 years has been lost. I suggest that what now appears to be an artificial assumption of status by means of consumer goods is now bumping up against real constraints in their supply and adoption in the present type of modern world. The way that modern societies have evolved -- particularly in the form of super-metropolises, highly centralised governments, almost total separation of home and workplace and an increasing divide in the employment structure -- means now that fully developed countries are now highly vulnerable. For an increasing number of people in the developed world, a life of physical drudgery in former times has now become a life of psychological stress and, frequently, social isolation. But we will not be able to change our present system in a rational way. Given our over-large institutional systems with so much protective practice built into them, we can never do this. We can only be forced into it by dire circumstances. What will finally put the tin lid on all this and bring about a change will be the continuing rise in energy prices. This will finally force us out of our present systems and built environment into entirely different forms of dispersed, more self-reliant patterns of living, working and governing ourselves in which in which status can have a more natural place in a community.
Keith Hudson
Keith Hudson
