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©Deirdre Nansen McCloskey | COPYRIGHTED MATERIAL

"Afterword" in Orvar Löfgren and Barbara Czarniawska, eds., Managing Overflow in Affluent Societies. New York: Routledge, forthcoming late 2011

Keep Calm and Carry On? The Economic History of Overflow

Posted July 2011
Filed under editorials/ comments/ articles related to speaking engagements/ articles forthcoming

Abstract: Is there a problem of overflow? One economic argument would be, No: consumers adjust. The critiques of the economic argument are numerous, but perhaps not as persuasive as many of those concerned with overflow might think. Arms races in consumption are not large, and some of them are good. Managing arms races requires very clever and very honest managers. Some consumption is stupid or corrupting, but the clerisy making such a claim do not include their own consumption of, say, books on overflow in their condemnations. Some stupid consumption was a natural, and sensible, mistake in experimentation, from which people learn. People have been trying out new goods since the caves. Condemning poor people for making their identities with their consumption is an ancient trope, but not a just one.

Is there a problem here?

In the darkest days of the Second World War the British government secretly printed in the hundreds of thousands a big, imperial-red poster to be displayed in case of a successful German invasion.  With British aplomb it advised in white letters 'Keep Calm and Carry On'.  The Germans never invaded, and the poster was not distributed.  Made public after the War, it is reproduced now as a gift-shop item.  I myself bought ten copies of a post-card size, and cheap frames for them, to sit on the desks of worried friends and relations. 

Is overflow a problem? More exactly, is it a problem of modern and rich and Western countries? Should we worry. . . or keep calm and carry on? Let me reply as an economist and an historian, which are two perspectives that this engaging volume might find helpful, even balancing, even staunching an overflow of calmless worry, worry, worry.

Orvar Löfgren and Barbara Czarniawska ask 'how does something (including something desirable) turn into too much when, where, how and for whom?' The economist answers in her naïve way, 'When the marginal benefit is driven down by successive consumption of the desirable thing to its marginal opportunity cost.  Since people stop buying at that point, overflow doesn't happen, "too much".' That's the answer of non-Marxist and non-institutionalist economists since the 1870s-Swedish Knut Wicksell and American John Bates Clark and British Alfred Marshall and Francophone Léon Walras and Germano-phone Carl Menger.  The other, non-'neoclassical' economists, such as Karl Marx and Thorstein Veblen, discerned deeper causes, such as labor exploitation or conspicuous consumption.  But for 140 years we economists have on the whole said, 'Let's not get too cute here.  People eat hot dogs until the added pleasure of the next one just exceeds the added opportunity cost.  (Unless they are in a hot-dog-eating contest, in which case the added pleasure is redefined as The Most.) Normally, if the third hot dog gives only $1.50 of pleasure (as against the delicious $5.00 of the first one), but costs as before $2.00 in other opportunities for pleasure, you don't eat it.  No overflow.  Roughly'.

Now of course not even all neoclassical economists entirely agree with such a calming conclusion.  The economist Robert Frank, for example, has long argued that a significant portion of consumption is rivalrous, in the sense of keeping up with the Joneses.  A century ago Veblen argued in a similar way.  Not everyone, note Frank and Veblen, can be Number One.  And so a pointless rivalry starts, an arms race in consumption.  In Pakistan the families compete with one another to hold the Number-One wedding in the neighborhood, to the point of bankruptcy.  The government would like to restrain such conspicuous consumption.  Frank suggests a consumption tax on rivalrous goods, the proceeds of which would be spent on public parks and symphony orchestras.  Galbraith said much the same. 

No one would deny that some consumption is rivalrous, and therefore subject to arms races, and that some of the arms races are undesirable.  The factual question is how much and of what kind.  Looking into your own consumption, you might conclude, as I do, that rivalry and Number One play a rather small role.  True, instead of stuffing my lectures into a plastic bag from the grocery store, I 'need' a lovely Italian leather briefcase designed by Hester van Eeghen of Amsterdam.  Some part of my great need for high style is competitive.  The very definition of high style speaks of rivalry.  Look at those pathetic women, I say to myself, who know not the style of Amsterdam.  And yet when I buy private goods, which are most of my expenditures, such as my housing away from the front parlor, or a bottle of milk, rivalry has nothing to do with it.  I am not keeping up with any Joneses when I buy ink-jet printers or packages of spaghetti. 

And there are numerous good arms races, such as in science and scholarship, on the whole, or the great arms race of technological and organizational innovation 1750 to the present, which has produced the modern world.  As David Hume put it in middle of the eighteenth century, 'having become opulent and skillful, [the inhabitants] desire to have every commodity in the utmost perfection' (Hume 1777, p. 329).  Look at your computer, and compare it with the first models.  The history of machines is filled with struggles to be Number One, and not always for mere monetary gain.  Even arms races in consumption are not all bad: the respectability of a university degree reaches a tipping point, and suddenly everyone wants one, so that everyone has a chance to appreciate Sophocles and understand British society deeper than The [late] News of the World would allow.  Are your own purchases of scholarly books, such as this very book, part of a bad arms race? No: you are keeping up with the latest news about the ideas of Rorty or Latour or Luhmann or Czarniawska, to everyone's benefit. 

Of course bad arms races happen, too, and do lead to one sort of overflow.  The American Way of Death (1963) by Jessica Mitford was a testament, in several senses, to overflow in the market for funerals.  The French, as Pascale Trompette explains here, had a solution after 1804, similar to Robert Frank's taxing, or Richard Thaler's and Cass Sunstein's 'nudging' (which they beguilingly call 'libertarian paternalism'): namely, a wise intervention by L'état.  Trompette tells the astonishing story of the monopoly of undertakers after 1804 in France.  'The sumptuousness of bourgeois pomp,' before L'état intervened, 'was converted into a form of death tax to serve the poorest'.  'By granting [the undertakers] substantial commissions on the sale of funeral goods, private businesses were able to provide significant revenues to the parish councils'.  Such an arrangement is in fact an especially French form of social consumption (Henry Kissinger once joked that France was 'the only successful communist nation').  Like the selling in the 1840s of rights to build railways-another characteristically French piece of private/public enterprise-the French undertakers served L'état for their own profit.  It was the 'concession model,' later applied for example by the Belgian king and the French state to harvest rubber in the Congo. 

But the cases show the problem with 'managing' an alleged overflow by political means.  Concessions to prevent ruinous competition can lead to quite nasty behavior, such as forcing Congolese villagers into the jungle to tap the rubber trees, and cutting off their hands if they don't.  Once the state has the power to nudge consumption, it has the power to favor This Consumer over That One, or This Producer, or Undertaker, over That One, or to add to the concession in the Congo a permission to cut off hands. 

The issue becomes one of the social context of management.  Does a society have the sociological material to yield good nudging, good dealing with environmental overflow, good simplifications of our lives? In the American case, and sometimes even in the Swedish (e.g., the state monopoly of pharmacies), one can doubt it.  As the great American liberal, Lionel Trilling, wrote sixty year ago, the danger is that 'we who are liberal and progressive know that the poor are our equals in everything except that of being equal to us'.  And in another place: 'we must be aware of the dangers that lie in our most generous wishes,' because 'because once we have made our fellow men [and women, dear] the object of our enlightened interest [we] go on to make them the object of our pity, then of our wisdom, ultimately our coercion' (quoted in Seaton 1996, pp. 35, 34).

Lynn Åkesson gives here some startling examples of what can go wrong in managing overflow by state coercion.  'In 2006, an elderly Swedish woman left her old frying pan in a container for metal packages.  But the frying pan was not packaging, and the woman was charged with committing an environmental crime.  She was freed at the trial, but was required to pay a fine of 10 Euro'.  Or again, a Swedish letter to the editor: 'Anyone who can't sort out his or her household waste shouldn't be allowed to vote! If you can't tell the difference between a metal packaging and an old bicycle frame, how're you supposed to be able to tell the difference between political parties?' Of course: disenfranchise anyone who is not a member of the clerisy. 

*     *     *     *     *

Bracket arms races and paternalism.  Another economics of overflow amounts mainly to a complaint about bad or or vulgar unhealthy consumption.  The clerisy of artists and intellectuals doesn't like the spending by hoi polloi.  Not one bit.  My old friend Avner Offer's drearily conventional agony of the clerisy (delivered from the silver-loaded dinner table of All Souls' College) plays a big part in this book, and summarizes its theme: 'There are too many easily accessible, rewarding things that people cannot resist buying'.  Which people? Oh, those vulgar poor people.  Orvar Löfgren notes here the class perspective:' 'What . . . made the 1960s seem like a decade of consumption overflow to many middle-class observers was the fact that this was a decade of growing working-class affluence.  Working-class families could now start to consume in ways that had previously been restricted to the wealthier'. 

The argument is conventional that the poor-not including, it goes without saying, the fellows of All Souls, or the authors here, such as me-are foolish in their consumption.  Especially in the United States the clerisy has been saying since Veblen that The Many foolish because they are in the grips of a tiny group of advertisers.  So the spending on Coke and gas grills and automobiles are the result of hidden persuasion-or, to use a favorite word of the clerisy, the result of 'manipulation'.  The peculiarly American attribution of gigantic power to 30-second television spots is puzzling on its face to an economist.  If advertising had the powers attributed to it by the clerisy, then unlimited fortunes could be had for the writing.  Yet advertising is less than 2% of national product, much of it uncontroversially informative, such as shop signs and entries on the web or advertisement in trade magazines aimed at highly sophisticated buyers. 

The clerisy looks down on consumers.  (The exception for itself, note, parallels the exception for the Party in the claim that people are in thrall to false consciousness).  Mass consumption is said to be motiveless, gormless, stupid.  Why do they buy so much stuff? The dolts.  The common consumer does not own a single museum reproduction of a post-impressionist painting.  It is ages, if ever, that she has read a non-fiction book on overflow.  She thinks the Three Tenors are classy.  Her house is jammed with tasteless rubbish.  And so forth.  One is reminded of the disdain c. 1910 on the part of modernist litterateurs like D. H. Lawrence and Virginia Woolf for the nasty little commuters of London.  An air of inferiority hangs about Waterloo Station and the super mall. 

The amount of stuff nowadays in rich countries is to be sure formidable.  Average real income per head in the world has increased since 1800 by a factor of ten.  In the parts that have caught on to the British example, such as Norway and Taiwan and now even China and India, the eventual factor of increase is more like 20 or 30-1900 percent or 2900 percent over the $3 a day of 1800.  Making proper allowances for the products unimaginable in 1800, such as antibiotics and jet planes, the factor is more like 100 times more goods and services.  (How much would one pay in 1800 to be saved from pneumonia with antibiotics? How much to fly from Chicago to Copenhagen in 8 hours? How much to have access on the internet anywhere in the world to millions of books, many free?) That's not merely 100 percent, understand-recall your primary-school mathematics.  It's 9,900 percent. 

Nor do the rich get richer and the poor get poorer, as people often say.  On the contrary, the poor in the innovating countries have benefited still more than the rich, moving from misery to comfort, and from ignorance to a chance at a fully human life.  They have plumbing and vaccination denied to Louis XIV, and can go to university.  They have more scope, as in the classic Greek definition of happiness: the exercise of vital powers along lines of excellent in a life affording scope.  True, to be aristocratic about it, the people sometimes choose to consume potato chips and reality TV instead of brie and Tolstoy.  But to be democratic about it, billions of ordinary people are now radically better off, at least by their own lights.  They walk and swim to get out of $3-a-day societies such as Mali and into $137-a-day societies such as Norway. 

A standard journalistic ploy is to persuade a family in Topeka, Kansas and one in Lagos, Nigeria to dump the entire contents of their houses out on the front sidewalk, and then pose for the camera en famille and en stuff.  The contrast is remarkable.  The half of the world's population that can now be accounted very rich by historical standards, a fraction growing rapidly as places like China and India lurch into the modern world, certainly do have an amazing amount of clothing and gadgets and lawn mowing equipment.  Of course, they have many times more than the average productivity and income of Nigerians.  They have it because of their own commitment to the dignity and liberty of the bourgeoisie, and the resulting innovations, not because they have stolen it from the poor countries (McCloskey 2010). 

And yet the clerisy wants us in our lives of riches to feel guilty about the overflow of unworn dresses in the closet and unused kitchen gadgets in the bottom drawer.  It's like your grandmother urging you to eat your peas 'because of the poor, starving children in China'.  In a world of scarcity, the professors and journalists cry, 'Why are we so immoral?' On this matter recently the clerisy, overcome by environmental worries, has turned even on itself. 

The economics of abundance, though, is that if you are sufficiently rich it is reasonable to try out that $200 air-purifier, which unhappily does not live up to its advertising.  It is economical in such circumstances to be in an engineering sense 'wasteful'.  Such purchases are 'wasteful' merely on the humanly irrelevant grounds of failing to maximize output per unit of physical input.  Maximizing engineering efficiency-despite what you and Thorstein Veblen think-is not a reasonable way of life.  What should determine what we buy is the utility- or dollar-value of the stuff relative to its cost.  Recall the hotdogs.  Under such a human logic, idle time of equipment or failed experiments in consumption are sometimes valuable.  The example I like to startle my students with is your downstairs toilet.  It is not in continuous use (I sincerely hope).  If the engineering criterion of avoiding 'wastefulness' were the correct guide, though, I should scold you for not opening it to the general public, so that its use per hour could be maximized.  That would minimize the waste-according to Veblen's society of engineers, who disdain the alleged wastefulness of a price-driven economy.  Long lines should form, snaking through your house, so that every minute of toilet-time is put to use.  No idle toilets. 

If by contrast one is living on $3 a day-as almost all our ancestors did until the Great Fact of per capita real growth by a factor of 10 or 20 or 100-there is little room for experiment or convenience or keeping that dress around in case you do lose the weight you so earnestly intend to lose.  And so there is no overflow.  The anxious poverty of our ancestors gives the impression that they were more virtuous than we are, that they were abstemious stoics.  The peasant, viewed from the palace of Versailles, looks wonderfully simple in his needs.  Oh, what an admirably under-flowing style of life! Let us take to a little hill beside Walden Pond in Concord, Massachusetts in 1845 and live naturally! It is a version of the pastoral. 

About Burenstam Linder's internationally famous book of 1970 on the harried leisure class (first published the year before in Swedish, and reissued in 2010), Löfgren here 'was struck . . . [that] the picture he painted of domestic life in the 1960s [lived by well-to-do people constrained by the limited time they could devote to consumption of their now-abundant goods] doesn't strike me now as highly chaotic, but relatively unstressed, orderly, and restrained'.  Which suggests-since we have not in the meantime gone insane-that the problem might be overstated.  In 1853 the English poet and critic Matthew Arnold implored the 'scholar gypsy' to stick with his pre-modern life:

O born in days when wits were fresh and clear,
And life ran gaily as the sparkling Thames;
Before this strange disease of modern life,
With its sick hurry, its divided aims,
Its heads o'ertaxed, its palsied hearts, was rife-
Fly hence, our contact fear!

In the 160 years of innovation since then how much more sick hurry and strange disease we must have experienced.  And yet I reckon that you and I are not yet o'ertax'd.  Have another glass of chablis.  Rent that new French film you've heard about.  Settle for a nice evening into your house, which after all is two to three times larger per person than anything your grandmother had.  Leisure hours per lifetime have in fact dramatically increased since 1853, or since 1969.  Long pre-work years of education and long post-work years of retirement were luxuries for the very rich in 1853 and for a tiny minority in 1969.  Hours of paid work have fallen-though somewhat mysteriously the fall decelerated in the mid-twentieth century-and the harried 'leisure class' that chooses to socialize and create at the office instead of at home has anyway the choice.  Sweden and Italy choose differently than Japan or the United States. 

I would claim that the sick hurry is routinely exaggerated by the present generation, whatever present we are talking about.  In Woody Allen's latest film, Midnight in Paris, one of the women describes the 1920s, where she lives, as over-busy, over-flowing.  The male lead is startled: oh, no, says he, it is 2010, his time, that overflows.  Your time is relatively unstressed, orderly, and restrained.  But Allen's theme is that it can't be so. 

The point can be put quantitatively.  Real incomes even in rich countries have doubled since the 1960s when Linder wrote.  Look at automobile ownership, or housing space per person.  If we well-to-do people were upset by the abundance of the 1960s, as Linder and his readers of the clerisy were, we would of course be proportionately more upset now.  And the residents of Hong Kong or Botswana, living through a much larger transformation, would be by now quivering lunatics.  (In fact, as the demographer Anthony Wrigley once pointed out, the sensory overflow that our ancestors suffered in Arnold's time moving from village to city came from a much larger leap than our recent travails in adjusting to a new version of Microsoft Word.) Something is wrong with the idea that people burn out because they are too rich.  'I've been rich and I've been poor,' said Sophie Tucker.  'Believe me, honey, rich is better'.  Löfgren and Woody Allen get the point: 'It is often the nostalgic past or the Utopian and rational future that come to stand for order and control; whereas the present often seems chaotic and overflowing with gadgets, endless choices, and options, as well as half?finished projects'. 

And we make ourselves with consumption, as anthropologists have long observed.  We always have done so, from necklaces of shells and ochre smeared faces ten millennia ago to subscriptions to the Times Literary Supplement and century-old port wine for dinner.  What's the evil in it? Mary Douglas and Baron Isherwood put it so: 'Goods that minister to physical needs-food and drink-are no less carriers of meaning than ballet or poetry.  Let us put an end to the widespread and misleading distinction between goods that sustain life and health and others that service the mind and heart-spiritual goods' (Douglas and Isherwood 1979, quoted in van Staveren, Caring for Economics, 1999, p. 92).  The classic demonstration is Douglas' article on the symbolic structure of working-class meals in England (Douglas 1972).  But all of anthropology is in this business.  Goods wander across the border of the sacred and the profane-the anthropologist Richard Chalfen, for example, shows how snapshots and home movies do (Chalfen 1987).  Or as the anthropologist Marshall Sahlins puts it in the new Preface to his classic of 1974, Stone Age Economics, 'economic activity . . . . [is] the expression, in a material register, of the values and relations of a particular form of life' (Sahlins 2004, p. ix).

*     *     *     *     *

An historian, further, would argue that overflow is not really Western or modern.  The worry about overflow is ancient, arising ordinarily from the elite.  Plato, comfortable aristocrat as he was, envisioned a society with no growth.  Good, said he.  The stoic philosophers of Greece and Rome, whether slaves or emperors, saw the economic problem as being one of restraining desires rather than fulfilling them, as did the Buddhists further east.  In a world of zero sum-my gain is your loss-simple justice required restraint.  Even the prosperous Dutch of the Golden Age of Vermeer and Rembrandt worried in their watery Dutch way about overvloed.  'The world is too much with us,' sang the English poet William Wordsworth in 1807, 'late and soon,/ Getting and spending, we lay waste our powers'. 

The most modern version of the worry that we are consuming too much, and that we are too concerned with economic matters, dates from the early twentieth century, when prosperity had recently accelerated.  Daniel Horowitz argued in 1985 that the American clerisy had been since the 1920s in the grip of a 'modern moralism' about spending.  The earlier, traditional moralism of the nineteenth century and before looked with alarm down from the middle class onto the workers and immigrants drinking beer and obeying Irish priests and in other ways showing their 'loss of virtue'.  Likewise the anxieties about the corruptions of commerce in eighteenth-century Britain.  In late nineteenth-century America traditional moralists like the U. S. Commissioner of Labor, Carroll D. Wright, 'had no basic reservations about the justice and efficacy of the economic system-their questions had to do with the values of workers and immigrants, not the value of capitalism'.  The European clerisy at the time held similar views, tinged with the still vivid colors of Old-World aristocracy. 

The modern moralist, post-1920, in the style of Veblen and Mencken and Sinclair Lewis, argues Horowitz, looks down from the clerisy onto the middle class.  Notice that in responses to the researchers here the word 'bourgeois' is used to signify all that is vulgar.  Odi profanum vulgus.  Therefore 'at the heart of most versions of modern moralism is a critique, sometimes radical and always adversarial, of the economy' (Horowitz 1985, p. 166f).  Horowitz is polite to his fellow members of the clerisy-people like Veblen, Stuart Chase, the Lynds, Galbraith, Riesman, Marcuse, Lasch, Daniel Bell, and some of the contributors to the present volume-and does not say that their concerns were simply mistaken.  He does observe that 'denouncing other people for their profligacy and lack of Culture is a way of reaffirming one's own commitment' (Horowitz 1985, p. 168).  From the sneering at consumerism we learn more about the self-contradictory anxieties of the clerisy than about the real conditions of life. 

True, some people, especially rich people, complain about overflow.  They always have, I say again, in whatever age, and whatever the actual condition of poverty or riches.  Around 20 B.C.E. Horace in Odes 3.1 argues that 'he who longs for only what he needs is not troubled by stormy seas,' and asks, 'Why should I change my Sabine valley for the greater burden of wealth?' But meaningful work for a higher and higher percentage of the community has lessened the burden.  The great grandparents of the members of the clerisy lamenting overflow worked mostly at turning a wheel from left to right.  Gideon Kunda's poignant case of the modern Israeli couple quarreling about the overflow into home life of a newly fascinating work life would not have happened in a Welsh mining village in 1900.  The coal miners may even in a rough way have enjoyed their work: coal-face hewers were paid well, the elite of the working class, and all of it was manly work with one's beloved mates.  But the hewers work was timed and tough.  The enchantments of the modern Office, or even of light manufacturing, pull people, especially men, away from Home.  Benjamin Hunnicutt describes a spread-the-work scheme at the Kellogg factories in Battle Creek, Michigan starting in 1930 and lasting in part until 1985 in which the men were at first delighted to work one of four six-hour shifts a day instead of one of three eight-hour shifts.  They went from 40 hours a week to 30 hours.  But gradually they went back to 40 hours, out of boredom at home.  Their wives were glad to see their husbands stop moping around the house and 'many of the men confessed that they were at loose ends when they were working six hours' (Hunnicutt 1996, p. 142).

Löfgren and Czarniawska note that 'Too much information, too many market choices, too many responsibilities and too many social relations, is the common complaint.  'A kind of ' hydraulic cultural thinking' is often the result: an overflow or elaboration in one cultural field must result [it is supposed] in drainage, scarcity or thinning out somewhere else.  Excessive consumption or overloaded lives thus make experiences more shallow, less sincere or engaged'.  Zero sum of another sort.  But it doesn't seem to be so.  The playwright John Synge visited every summer 1898-1903 the traditional Irish peasants of the Aran Islands to get back to his Gaelic-speaking roots.  But was a drunkard there more 'sincere or engaged' than in Dublin?

How then in fact do we handle overflow? Löfgren here, I think, discerns the solution: 'Through routinization, people integrate and absorb new tasks, skills, objects, and ideas into the everyday'.  Routinization applies to boiling potatoes in the Aran Islands as much as to learning how to use one's new iPod.  'Coping with overflow may be-for some people-an enjoyable experience, like the moral satisfaction of cleaning out their wardrobes, finding a nice flow in multitasking, or learning to live in a relaxed way with the perfect mess'.  'Some people' admittedly do not like absorbing new tasks into routine.  But it would seem strange to take their conservative preferences as dominating the progressive preferences of everybody else.  The homme sauvage, as we learned from anthropologists like Levy-Strauss, has a no less overflowing and multitasking life in dealing with the jungles of the Amazon than does the man in the gray flannel suit dealing with the traffic of Seventh Avenue.  In the way that Michael Polanyi argued that a blindman's stick becomes a routine part of his body (Polanyi 1958, p. 64), a motorist makes the overflowing objects of his steering wheel and the roadway part of her routine, or the pygmy following obscure jungle trails make alertness to panthers part of his routine.  None of them in the end break down weeping as a result of overflow. 

Kunda writes: 'Being caught between the demands and pressures of two powerful, greedy and articulate institutions-the work organization and the nuclear family-is a condition many people experience as the basic condition of their lives'.  Yes, but it is the condition, too, of people caught between the demands of one faction or another in their hunter-gatherer group, or people caught between the demands of church and village in fourteenth-century France.  We have always been modern, and always been subject to overflow. 

Perhaps, then, we should keep calm and carry on. 

Works cited