Early on in my principles of economics course, I spend a good deal of time demonstrating to students just how fantastically far we have come (in America and the world around) in a material sense (and in many other senses too). Too much data to show here, but for example, in just the course of a century, the typical American has an income seven times larger than his 1900 predecessor. And that income buys a far more interesting and important variety of goods and services today.

But, it is argued, life is far more precious that focusing on material measures. Materialism corrupts the soul. And we need to look at more holistic estimates of what a good standard of living is than focusing on material advances. In future posts I will slowly share the preponderance of data I show my classes. For now, I want to address the criticism as an idea.

1. An increase in the consumption of material goods does correspond to an increase in human well being. Why? Because the ability to purchase such “trifles” is a reflection of our ability to purchase the goods and services that are “necessities” and important. Do you wish to argue that people purchase trifles with their income before they purchase things like food, clothing and housing? Let’s discuss that some day. For now, consider that for a typical American family in 1900, 72% of their budget was spent on food, shelter and housing. Today, that fraction is in the mid-30% range. So, it is twice as easy to secure the basic needs today (this assumes that we were not also 7 times richer … so in reality we are 14 times more able to consume the basic needs … if something was a need in 1900, it cannot have become more of a need in 2010). Thus, we could not have even tried to purchase much in the way of material goods back when living standards were measurably lower. Consider the consumption of material goods to be the thermometer in the boiling cauldron of life (OK, so that’s not the best analogy).
2. The goods themselves may appear to many to be trifles. But it is not exactly the goods that are the focus of our consuming behavior. It is the stream of pleasures that one gets from the goods that surely counts. We bought our daughter some plastic rings with some animals inscribed on them. Useless junk. $1.00 wasted. Right? But it gives her and us great pleasure to see her wearing them, and we even get to use them in other games and crafts projects we play. And right now, the reason I am blogging it, is that she left those trifles in my jacket pocket for me today, so that I can think of her while I am at work. Just trifles, right? But even if you wished to call this a trifle, two questions come up. First, what counts and what doesn’t? Is the book we bought for our daughter a trifle? What about her little toy guitar? How about that “extra” sweater? Second, who gets to decide what is a trifle and what is appropriate for me? And what should I be spending my $1.00 on?And if you think money cannot buy happiness, try spending some time at the park with your kids while you have to spend 14 hours a day chopping wood in the field and picking weeds all day. Well, maybe my 4 year old could be there helping.
3. If material goods do not matter, then why is there so much apoplexy about the “redistribution” (as if someone distributes it in the first place) of income? After all, the point is to transfer resources from the people who have “useless” material goods to other people so that they can purchase more … material … goods?
4. A good economist cannot look only at material consumption and its possible suppression as a short-run, one-time, redistributive issue alone. There are very serious long-run consequences of such an anti-materialistic view.
5. Do we not have a choice? Given our miraculous amounts of wealth we do have many, many, many ways to spend our produced income. But there is no rule, no advertising genious, no nefarious ugly capitalist dude making you spend your money on trifles. After all, the same nefarious ugly capitalist dudes are trying to get you to buy things which are not trifles, like for-profit education, books, health club memberships, and the like. Can you argue it both ways?
6. The costs of necessities has plummeted so much that even the lowest wage earners would have an easy time purchasing a bundle of necessities. (note that one problem, a major problem, of poverty, is the inability to work enough productive labor hours …). A two-earner family each earning the minimum wage full-time will take home about $29,000 per year before taxes. After the “social insurance contribution” is taken from them and various sales taxes are taken, they would have about $26,000 of after-tax income to spend – totally excluding any transfer payments or help from anyone. If you spend $800 per month on housing, another $800 per month on food and $100 per month on clothing that still leaves another $6,000 to spend through the year. Remember that public schools are free, health care is free, and that I am totally overstating what you could reasonably be expected to pay for housing and food (our family probably spends $700 per month on food, including going out).Again, I cite this point as merely a technical matter, it doesn’t mean that the poor CAN do it, I am just talking about resource abundance here.
7. UPDATE: Hayek wrote in the Constitution of Liberty that a family’s ability to pass on socially valuable morals, tastes, knowledge and traditions is closely tied up to its ability and possibility for transmitting wealth across generations. He was discussing this in the context of the justification for material bequests, but he could just as easily have changed his discussion to capture the intra-temporal issue as well.