The Challenge of Affluence

Avner Offer’s The Challenge of Affluence starts with certainty and ends with doubt. “Affluence breeds impatience, and impatience undermines well-being”, states Offer at the start of Chapter 1. That theme runs through the book to his conclusion, but the lessons he draws from it are not as simple or confidently stated: “Well-being is more than having more. It is a balance between our own needs, and those of others, on whose goodwill and approbation our own well-being depends … I present these findings in the hope that they will make our choices appear not simpler and easier, but as complicated and intractable as they really are.”

In separating out happiness or contentment from affluence in modern, rich economies, Offer’s study of the US and UK fits in with a wider intellectual trend, such as that of Jonathon Porritt’s Capitalism as if the world matters, Robert Putnam’s pioneering work on social capital, Richard Layard’s path-breaking Happiness or The Spirit Level.

The breakdown of the link between happiness and affluence as these countries got richer Offer puts down to people succumbing to pleasure now even if it means pain later. Increasing affluence means there is more to tempt them (especially food) so they succumb more often, with resulting more pain following. Or, as he puts it, “affluence undermines prudence”. In addition, he says people generally treat change as disconcerting, with the spread of marketing and advertising undermining trust in personal relationships and helping make money the symbol of success rather than non-financial measures.

The Challenge of Affluence - Avner OfferMuch of Offer’s analysis sits comfortably with the views often expressed both by political moderates and those on the left. His views on changes in personal relations, however, are much more what is usually found in traditional conservatives bemoaning the old days, for he draws together increased availability of contraception, improved school and work opportunities for women and easier divorce into a bleak social picture of fewer marriages, more divorces and more children born outside of marriage (which he views as a bad outcome).

The analysis is peppered with detailed evidence, and striking findings such as that a fifteen year old white American has a nine in twelve chance of reaching 65 whilst fifteen year old black has only a four in twelve chance.

For all the detail, the analysis is narrow, frequently considering only two countries even though the trends have played out across many more. As both supporters and critics of The Spirit Level have shown, looking across numerous countries raises questions about whether it is levels of affluence, levels of inequality or different cultures that really matter the most. Offer himself concludes in a mini cross-country study that country has a much bigger impact on people’s happiness than their relative income.

Moreover, not all his points are convincing, such as the lamentation that much advertising makes people make decisions other than on the basis of “price comparison and calculation”. Yet faced with the plethora of different portable computers or mobile phone tariffs on offer, for example, it is quite logical not only to decide to take other factors into account (such as a firm’s reputation, or not, for making durable products) and also to look to shortcuts to save the time that would be required for a thorough analysis of features and prices.

Despite the broad themes of the book, his suggested remedies are very modest, such as improving after-hours child care. Despite this, and the pessimism of much of the book’s arguments, there are burst of optimism and of more traditional economic conclusions as when Offer points out, “Those describing themselves as unhappy or happy [in affluent societies] are typically fewer than 15 per cent” and that though the link between income and happiness may be weak in affluent societies it is still there, just at a much lower rate than in less affluent societies.

Whatever you make of the book’s overall conclusions, the individual chapters contains many authoritative and stimulating individual case-studies, which are well worth the read even if his overall messages do not fully convince.

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Buy The Challenge of Affluence by Avner Offer here.

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