Citizen Action Monitor

Jackson weighs suitability of ‘opulence’ and ‘utility’ as measures of societal prosperity

He finds both problematic.

No 2047 Posted by fw, September 8, 2017

To access all other synopses from Prosperity without Growth, click on the Tab titled “Prosperity without Growth” — Links to All Posts in the top left margin. 

In today’s post, a synopsis of Section 2, Chapter 3 of Tim Jackson’s book Prosperity without Growth, Jackson sets out to equate the concept of prosperity at the societal level with a valid, reliable, measurable index. Considered as possible indices were accumulation of material goods, the level of use and satisfaction which the material goods provide, and GDP. All were rejected for one reason or another.

As an aside, I have found Jackson’s academic writing style particularly confusing and frustrating in places. His sentences are not always clear and concise, and I worry that his lack of clarity may carry over into my synopses.

Tim Jackson is a British ecological economist and professor of sustainable development at the University of Surrey.

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Measuring Progress, a synopsis, from Chapter 3, “Redefining Prosperity” of Tim Jackson’s book, Prosperity without Growth, Routledge, 2nd edition, 2016-17

The aim of Chapter 3, declares Jackson, “is to articulate a credible account of prosperity” in a world approaching 10 billion. And the immediate task is “to establish a workable vision of prosperity at the societal level,” since “the good life of a good person, can only be fully realized in the good society.”

To ensure a “credible account of prosperity”, Jackson borrows three concepts from a landmark essay, The Living Standard (aka The Standard of Living) by the distinguished Indian economist and philosopher, Amartya Sen, 1998 Nobel prize winner in Economic Sciences.

The three terms Sen used to characterize his concepts are opulence, utility, and capabilities for flourishing. Jackson focuses solely on opulence and utility in this section, mentioning in passing that “it’s the third of these in which I’m particularly interested.”

Sen’s first concept, termed opulence, refers to “a great abundance or extravagance”, and corresponds, notes Jackson, to “a conventional understanding that prosperity is about material satisfactions. … the more we have, the better off we are.”

There is no disputing that prosperity, in the sense of material satisfaction, will remain a top priority in the poorest countries of the world.

But is this true in the richest countries? More opulence, more consumer goods, equates quantity with quality, a patently false equation. In fact, actual pleasure diminishes with indulgence, causing us to continually strive for more.  

More to the point, at what resource cost to our finite planet is indulgence? Jackson argues, “should we not focus our efforts on increasing incomes (and material throughputs) in the regions where this will have the biggest impact on people’s quality of life?”

After all, “Opulence is not the same thing as satisfaction.

Turning to Sen’s second concept, termed utility, “relates prosperity to the uses and satisfactions which commodities provide.

While it’s easy to see the difference between opulence, which relates prosperity to “more material possessions” and utility, which relates prosperity to the uses and satisfaction to which commodities are put, as Jackson points out, “it is more difficult to define exactly how commodities relate to satisfaction. … the uses to which we put material commodities are social or psychological in nature rather than purely material.”

Consequently, measuring social or psychological utility can be problematic. By what metric does one measure the psychic satisfaction of a new car?

To circumvent this difficulty, mainstream economists use GDP as a measure of satisfaction: GDP – the per capita measure of total spending by households, government and business investments — is used as a measure of wellbeing.

But, objects Jackson, this is a “deeply flawed” equation because GDP includes all our destructive lifestyle practices. Recent empirical research has advanced the case that “the conventional measure of GDP could be a gross overestimation of social progress…”

A relatively new metric, the Genuine Progress Indicator (GPI), now being used in ecological economics, reveals that although the GDP per capita was around 2.3% from 1960 to the 2008 financial crisis, the average growth rate in GPI during this time was barely 0.5%.

Based on this comparative analysis, Jackson exits Section 2 with this sobering conclusion:

“When we start to subtract out the ‘disutility’ – the damage caused by the production of those goods and service, for instance – then economic growth can even begin to look a bit like ‘uneconomic growth’”

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