The current recession may turn into a small depression, and may push global living standards down by five percent for one or two or (we hope not) five years, but that does not erase the gulf between those of us in the globe's middle and upper classes and all human existence prior to the Industrial Revolution. We have reached the frontier of mass material comfort--where we have enough food that we are not painfully hungry, enough clothing that we are not shiveringly cold, enough shelter that we are not distressingly wet, even enough entertainment that we are not bored. We--at least those lucky enough to be in the global middle and upper classes who still cluster around the North Atlantic--have lots and lots of stuff. Our machines and factories have given us the power to get more and more stuff by getting more and more stuff--a self-perpetuating cycle of consumption.
Our goods are not only plentiful but cheap. I am a book addict. Yet even I am fighting hard to spend as great a share of my income on books as Adam Smith did in his day. Back on March 9, 1776 Adam Smith's Inquiry into the Nature and Causes of the Wealth of Nations went on sale for the price of 1.8 pounds sterling at a time when the median family made perhaps 30 pounds a year. That one book (admittedly a big book and an expensive one) cost six percent of the median family's annual income. In the United States today, median family income is $50,000 a year and Smith's Wealth of Nations costs $7.95 at Amazon (in the Bantam Classics edition). The 18th Century British family could buy 17 copies of the Wealth of Nations out of its annual income. The American family in 2009 can buy 6,000 copies: a multiplication factor of 350.
Books are not an exceptional category. Today, buttermilk-fried petrale sole with pickled vegetables and parsley mayonnaise, served at Chez Panisse Café, costs the same share of a day-laborer's earnings as the raw ingredients for two big bowls of oatmeal did in the 18th Century. Then there are all the commodities we consume that were essentially priceless in the past. If in 1786 you had wanted to listen to Mozart's The Marriage of Figaro in your house, you probably had to be the Holy Roman Emperor, Archduke of Austria, with a theater in your house--the Palace of Laxenberg. Today, the DVD costs $17.99 at amazon.com. (The multiplication factor for enjoying The Marriage of Figaro in your home is effectively infinite for those not named Josef von Habsburg.)
All true. But the kicker matters, too:
Keynes thought that by today we would have reached a realm of plenty where "We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin."That we'll never be satisfied with what we have probably goes without saying. But the most pressing issue, it seems to me, is whether we've reached - or will reach - a point at which all our abundance cushions us against the political consequences of suddenly-diminished expectations. In 1932 or so, the West's porridge-eating past wasn't nearly as far in the rearview mirror as it is today, but a Brad DeLong of the Great Depression could still have marshaled all sorts of statistics to prove that even amid economic crisis, your average Westerner was in vastly better shape than his pre-industrial forefathers. Yet that underlying reality didn't save Europe from a decade in which democratic capitalism was thought to be discredited, and the whole edifice of modern civilization was very nearly torn apart.
But no dice. I look around, and all I can say is: not yet, not for a long time to come, and perhaps never ... There is a point at which we say "enough!" to more oat porridge. But all evidence suggests Keynes was wrong: We are simply not built to ever say "enough!" to stuff in general.
Hopefully the world - not only DeLong's North Atlantic cluster, but the developing powers as well - has grown rich enough and stable enough that something like that simply couldn't happen again, no matter how hard the fall and how deep the depression. Hopefully.