Lower economic growth does not mean lower human happiness
As pandemic restrictions are lifted, growth forecasts are rising.The UK’s prospects are particularly good due to the high vaccination rate, and the OECD now estimates the growth rate to be 7.2% in 2021These figures will continue to adjust, but one thing is certain: when the recovery comes, it will be driven by consumer spending.
This has been the case for a long time: our economy is driven by private domestic consumption, which represents approximately 65% The British economy, and The bigger part is still One of the United States. As in all affluent societies, most of this expenditure is no longer used for basic living, such as food and shelter, and physical comfort. On the contrary, it aims at a series of social functions, from gaining the respect of others and considering expressing one’s own identity. Even organic watercress bought at a farmer’s market is a better signal than salad.
This is why, when the social aspect of our lives is suddenly relegated to a square image on a computer screen, private consumption also drops sharply.This is why after the biggest decline in the past 18 months, the commodity category with the largest surge in demand this year is Clothing and beauty products.
However, aside from the ecstasy after the upcoming pandemic, it is unclear whether consumer spending will still be the engine of growth at least since the Industrial Revolution. Many clues indicate that it will not. This means that in the foreseeable future, the growth rate of post-industrial countries such as the UK may be much lower.
However, this slowdown does not necessarily mean bad luck. On the contrary, it may be a by-product of social progress: a plateau of high economic success, where people have the ability to devote more energy to activities that are not primarily designed to increase output.
It is by making growth our common goal that we have achieved unprecedented prosperity in the first place. Even in a devastating pandemic, our society is still the richest, healthiest and safest society in the history of the planet. However, it is becoming increasingly clear that there will be no further progress in well-being by creating more output.
Unexpectedly, this evolution has been reflected in changes in taste. In a trend that the pandemic will only accelerate, compelling consumers are now despised by the emerging entrepreneurial class that crosses the traditional income gap.
Instead, we are witnessing the so-called rise of marketing scholars Humble consumption: Abandoning loud labels or transparent attempts to impress people, to match them are “sustainability”, “purpose” and “health” as new distinguishing signs.
The survey shows that consumers are most eager to restore spending on services such as dining and travel in restaurants, rather than commodities. This is part of a general trend in advanced economies, and it also has a well-known impact: Unlike manufactured goods, services are less susceptible to productivity gains.
In order to avoid these superficial issues that seem to be the tastes of wealthy consumers, they form part of a package of preferences that affects all areas of life. Take the workers. It has become a metaphor for millennials to value “goals rather than salary” when choosing a career, but they seem willing to take action: A 2019 Deloitte survey found that 49% of millennials plan to quit their jobs within the next two years.
Political attitudes are also evolving simultaneously. Whether it is out of fear of the well-known pitchfork or the realization that they themselves are negatively affected by inequality, some wealthy people and many highly educated people are changing their perceptions of redistribution, resulting in Thomas Pi What Katie calls the “Brahmin Leftist”.
The past decade has shown that people’s tolerance for social and environmental costs is limited, and these costs are now generally seen as the inevitable result of maximizing total wealth. After that point, an increase in average income no longer produces the same improvement in welfare. There is reason to believe that in the rich economies on both sides of the Atlantic, we may have reached this limit.
What’s new is that more and more people are aware of this and adjust their behavior accordingly-as consumers, workers, and voters. During the two-century period of rapid growth, we may be at a turning point. We may also become better because of this.
Krzysztof Pelc is?Associate Professor of Political Science at McGill University in Montreal, Canada, And a winner Political Economy Club Essay Award