Living in the Over-developed World

While reading the collection of essays “Economics, Ecology, Ethics” edited by Herman Daly, in “Humanity at the Crossroads” by Paul and Anne Ehrlich I found a very interesting term – overdeveloped countries. Normally, when we speak about, say, the U.S. or Japan or the member states of the European Union, we call them “developed countries” or, as a whole, the “developed world” – in contrast to the “developing world”, consisting mainly of African, Latin American and Asian countries.

Can any country “overdevelop”, as the Ehrlichs implicitly claim? I would argue that yes: not only is this possible – it is actually the reality in many richer societies of this world. So, instead of calling them “developed”, we maybe should use the term “overdeveloped” instead.

What are the particular characteristics leading me to the conclusion that I am living in an overdeveloped country? The list is long. I would like to name some of them, but I am sure that everyone is able to find further ones, which I have omitted.

As a general starting point of the discussion I would like to quote John Maynard Keynes:

Now it is true that the needs of human being may seem to be insatiable [as mainstream economics assumes – zg]. But they fall into two classes – those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they. But this is not so true of the absolute needs – a point may soon be reached, much sooner perhaps than we are all of us aware of, when those needs are satisfied in the sense that we prefer to devote our further energies to noneconomic purposes.

And indeed, there is striking evidence that in the richer parts of our world – most of Europe, Northern America, parts of Asia – the basic/absolute needs of the average citizen are already fulfilled. At the same time there are indices of satisfaction/happiness (e.g. this one) showing no significant link between well-being (in this subjective sense) and economic welfare in the top countries. The straightforward conclusion is that our affluence doesn’t make us happier any more, since our basic needs are fulfilled, while only the few richest in a society can take advantage of their relative welfare.

Of course, there are poor individuals in the (over)developed countries as well. Most economists claim that the remedy against that is economic growth. But they misunderstand exactly the difference emphasized by Keynes – people won’t feel better when they just have more (at least in those societies that have passed the threshold between absolute and relative needs). Relative wealth matters. We need distribution of wealth, not more wealth in absolute terms. Especially when we consider the costs of ever more growth (for a discussion of that see here).

In the overdeveloped world people already are relatively well fed, healthy, have a shelter – our absolute needs are fulfilled. But instead of holding and enjoying this, instead of deepening our social networks, learning what we value and so on, we keep on working long, producing short-lived consumer products that require further work because they wear out so fast. We seek happiness in consumption – thus consuming and producing ever more things we don’t necessarily need (consider, e.g., the pharma industry that is producing mainly cosmetics, since we seem not to need many more life-saving drugs). At the same time, as I already have discussed elsewhere, we concentrate on “more” instead of “better”. For instance, we eat cheap food and suddenly our health is suffering from diseases that should actually be overcome due to our wealth. Consumption for its own sake not only does not make us happier, it even may make us unhappy (ill).

Most things one objectively (i.e., according to empirical studies) need to be happy cannot be bought: love, life-long partnerships, social networks, a feeling of safety… So maybe we should start thinking about whether the world we are living in is not an over-developed one. Maybe it would be better for us to slow down. This would require a huge change of paradigms – in everyday life as well as in economics and other social sciences. But I believe it would be worthwhile.


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