There's less pleasure in the easy life

Howard Davies chews over the ways in which endless choice in rich societies harms people's health and happiness

Happiness has become an academic growth industry in the past few years. Economists and others have begun to question the assumption implicit in most public debate that economic growth should be the prime objective of government policy, with redistribution as a kind of optional extra. It is increasingly understood that growth in gross domestic product per head and growth in measures of wellbeing are poorly, indeed sometimes inversely, correlated. So, if individual contentment is what we care about, we need a more sophisticated way to measure, and possibly an altogether different view on, the value of GDP growth.

Richard Layard of the London School of Economics explored this territory with some care and wit in a book last year titled Happiness: Notes from a New Science . Now, hard on his heels, Avner Offer, the Chichele professor of economic history at Oxford University and a fellow of All Souls to boot, has surveyed the evidence from a slightly different perspective.

The core of his argument is that growing affluence presents individuals with more and more difficult choices. In societies such as the American or British - and Offer's book is in form a comparative social history of the two key members of the coalition of the willing - most people find their basic human needs for sustenance and shelter quite easily satisfied, but they face a constant barrage of invitations to consume an ever-growing variety of exotic goods and services. Some of these invitations are positively dangerous to accept, or at least they involve complex trade-offs between immediate consumption and either deferred gratification or investment. As a device, Offer uses the real-world example of a student deciding whether to spend the evening revising or to go out with her friends. (I would like to think that this dilemma preoccupies students in my university every Saturday night, although I doubt it. But perhaps I do them an injustice.) The need to set a balance between immediate and deferred consumption is a challenge for us all, and not simply for students. Some of us are more successful than others in developing the habit of personal prudence. We are helped, however, by what Offer calls commitment devices or commitment technologies. In the case of higher education, universities set expectations, offer prizes and impose penalties in such a way as to make reckless consumption hazardous and to reward continence and deferral. More importantly, families inculcate values of reticence and habits of saving in their junior members. So we are helped to devise our own strategies of self-control, although ultimately the responsibility is our own. The bourgeoisie are typically better at these techniques than the poorer socioeconomic classes - partly for the simple reason that they have more spare resources to invest, but also because they have better access to financial institutions and financial instruments that make that saving more rewarding.

But rapidly growing affluence in the developed world has challenged the ability of even the most continent of the professional classes among us to maintain this capacity for prudence: "Prudence has built up affluence, but affluence undermines prudence." Offer argues that "affluence is a relentless flow of new and cheaper opportunities. If these rewards arrive faster than the disciplines of prudence can form, then self-control will decline with affluence: even the affluent will become less prudent". In economic terms, we can see evidence of this trend in the US today, where the measured saving rate has declined to about zero.

The body of The Challenge of Affluence consists of a series of careful analyses of the way American and British societies have exercised some of the key choices over time. Offer's aim is to demonstrate that consumer choice may be an increasingly unreliable guide, and that rational-choice theories poorly describe the way individuals behave when faced with today's cornucopia of possibilities. Although he does not take his argument in that direction, he would certainly be opposed to the current Government's policy of founding the incentive structures of our public services on a consumer-choice model.

Drug addiction is one extreme example of the problem he identifies. Addicts are locked in a cycle of myopic choices that they constantly regret. They know that their addiction is damaging their health, welfare and future prospects, but they carry on all the same. It may be argued, however, that addicts are ill and constitutionally incapable of exercising rational choices, at least for a period. So some of Offer's other examples are more interesting and ultimately more persuasive.

A lengthy chapter on body weight and self-control is particularly well argued. There is overwhelming medical evidence that obesity, defined as a body-mass index (BMI) of 30 and above, dramatically increases mortality risks. Furthermore, being overweight - defined by the World Health Organisation as living with a BMI of over 25 - significantly increases the risk of contracting debilitating and potentially fatal diseases. (For a little fun in the common room, why not calculate the BMI of your colleagues? It is conveniently defined here as weight in kilos divided by height in metres squared - 23, since you ask.) Yet although these facts are well known and, in spite of the fact that healthy food is increasingly easily available and exercise opportunities are all around us, obesity is on the march. Fully two thirds of American men are overweight, or obese, on this definition, and more than 60 per cent of women are overweight. That is easily evident on any New York subway train. The British, in this and other things, are a little behind the US, but we are doing our plucky best to catch up, just as we do in foreign policy. For Offer, obesity is a disease of affluence - "what caused body weights to rise was the shock of easy food availability on existing prudential strategies". When asked if they want to supersize, Americans do not know how to say "no".

That is so, even though severe penalties attach to obesity, over and above the health risks. The social costs are large. Detailed American surveys show that obese and overweight people go on fewer dates and have far more difficulty in attracting sexual partners. Yet even these serious disadvantages have not yet proved sufficient to offset the stronger trend of overeating. Sexual attraction and mating behaviour does have some impact on eating, however. Offer points to uncomfortable evidence that suggests that the lack of available and desirable black males in the US (many are in prison, and even those at liberty do not present themselves as attractive long-term marriage potential) is the reason why black women are two BMI units heavier on average than white American women. "Obesity," he concludes, "shows how abundance, through cheapness, variety, novelty and choice could make a mockery of the rational consumer, how it enticed in order to humiliate."

He applies a similar analysis to the declining birth rate in most developed economies. The opportunity cost of children has risen considerably as salaries available to women have risen, and the consumption possibilities opened up by those salaries in a world of affluence are more attractive. As a consequence, motherhood is not attractive enough for women to produce enough children to reproduce these existing societies, and the birth rate has fallen below replacement rate - indeed, well below in places such as Hong Kong or Italy. That will bring a serious crisis of dependency in the future, a crisis we are only just beginning to get to grips with.

Offer looks in a similar way at mating behaviour, but also at changing income distribution, changing attitudes to social status, and indeed to the growth of advertising and the patterns of consumption of consumer goods, particularly the spread of household appliances. He has assembled, as the Americans would say, a whole bunch of numbers, which Oxford University Press has presented in a series of rather scruffy charts and graphs that do not serve his cause well. But in spite of that, and of some rather clunky prose at times, The Challenge of Affluence is always fascinating and thought-provoking. Offer's range of reference is remarkably broad. He travels confidently across the social-science spectrum. Some will find his conclusions uncomfortable, especially those with a body-mass index above 30, but that is because he is not afraid to push his analysis as far as it will go.

Nor is he afraid to draw public policy lessons, and he devotes a concluding chapter to them. Here, sadly, there is less red meat. He argues tamely for "an audit of wellbeing that would try to measure what really counts". One's heart drops at the thought of earnest government researchers asking what turns us on. He argues, too, for a revival of old-fashioned values and "noblesse oblige to de-legitimise the destructive pursuit of self-interest". If the upper classes set a good example, maybe that would help. Perhaps we should see the Prime Minister's sale of peerages in a more sympathetic light, namely, as an attempt to bring into the House of Lords men and women who understand the virtues of self-sacrifice in a greater cause.

More fundamentally, Offer believes that there is "a case for reducing the standard of living overall, if it improves the lives of the less well off".

Here he stretches his analysis rather further than it will go. And it is quite hard to see how this thought can be converted into attractive manifesto language, even for the Liberal Democrats. As an attempt to explore the acceptability of this notion, perhaps he should start at home.

If next year's All Souls Chichele feast, a notably bucolic Oxford occasion, is cut back to a green salad and a nut rissole we will know that the fight back against the evils of affluence has begun in earnest.

Howard Davies is director, London School of Economics and Political Science.