Responding To The End Of Economic Growth

08/10/2016 11:19 am ET Updated Aug 11, 2017
Businesswoman sitting at table in restaurant with head resting on hand
Businesswoman sitting at table in restaurant with head resting on hand

The headlines tell you that finally we have a robust job market, a lot of hiring, and even some wage increases. However, the American economy grew during the last quarter at a lackluster rate of 1.2 percent. Economic growth has been anemic now for nearly a decade. It is among the lowest since WWII. Commentators tell us that the U.S. economy is doing better than most other industrial economies; which is bad news because they serve as our markets and we as theirs. Japan shows that an economy can be marred in a semi-recession for decades. The growth of China's economy, until recently the marvel of the world, is decelerating. The Central Banks have been pumping trillions into the world's economies in order to stimulate growth but instead are causing an asset bubble, soon to burst as all such bubbles do. Unemployment rates are high in Europe; while the rate has been declining in the U.S., this is due in part to the fact that millions stopped looking for work. Most new jobs pay much less than old ones, provide fewer benefits if any, and are much less secure. Next comes the new technological revolution: smarter computers that replace many middle class jobs, especially in medicine and education, as they are already doing to the legal profession.

So far, the reaction to the economic deterioration has been a major increase in right wing populism, accompanied by small growth in left populism, and growing alienation of most citizens of the major democracies. There is growing violence, xenophobia and racism.

Both the Democratic and Republican parties, as well as Donald the Quack, promise Americans more and better jobs, a vibrant economy. But what if this is truly a dreaming field, which no one can build? What if no one can rev up the world's economies? The time has come to consider a fundamental change in what we aspire to. Those who have enough income to have their basic needs met may find that chasing more income to acquire more things, may be both ever more frustrating and indecent, as so many cannot get the work and the income they need to make ends meet.

We hence will need to: (a) Ensure that whatever work there is, gets more widely distributed -- for instance, by reinstating the mandatory retirement age, and taxes over time; (b) Provide everyone with a basic insured income (an extension of the existing Earned Income Tax Credit); (c) Provide health insurance for all; (d) Above all, provide sources of satisfaction other than consumerism.

These can be found in three major categories:

Social: Social science data show that spending time with those with whom one shares bonds of affinity -- children, spouses, friends, members of one's community -- is a major source of non-consumeristic contentment. Research shows that married people are more satisfied than those who are single, divorced, widowed, separated or cohabiting. Close friendships provide nearly as much happiness as a successful marriage. Conversely, "Adults who feel socially isolated are also characterized by higher levels of anxiety, negative mood, dejection, hostility, fear of negative evaluation, perceived stress, lower levels of optimism, happiness, and life satisfaction."

Spiritual or transcendental: Extensive evidence indicates that people who consider themselves religious, express a belief in God, or regularly attend religious services are more satisfied than those who do not. According to one study, agreement with the statement "God is important in my life" was associated with a gain of 3.5 points on a 100-point scale of happiness. (For comparison, unemployment is associated with a 6-point drop on the same scale.) Other studies show that Americans with a deep religious faith are healthier, live longer, and have lower rates of divorce, crime, and suicide. In their 2010 book American Grace, Robert Putnam and David Campbell report that "a common finding [of happiness researchers] is that religiosity is among the closest correlates of life satisfaction, at least as strong as income." They found that the difference in satisfaction between a person who attends church once a week and someone who does not attend church was "slightly larger than the difference between someone who earns $10,000 a year and his demographic twin who earns $100,000 a year." Other spiritual and cultural engagements have similar benefits to religion.

Civic: Researchers who examined the effects of community involvement found a strong correlation with satisfaction. In his book, The Politics of Happiness, Derek Bok reports that "some researchers have found that merely attending monthly club meetings or volunteering once a month is associated with a change in well-being equivalent to a doubling of income." Other studies have found that individuals who devote substantial amounts of time to volunteer work have high "life satisfaction."

This is not an argument that the poor should enjoy their poverty and instead of seeking income should socialize, pray, and volunteer. It is an argument that in the future, the more one's economic needs are satisfied, the more one will need to find joy in ways other than working more and more in order to buy more and more.

Amitai Etzioni is a University Professor and Professor of International Affairs at The George Washington University. He is also the author of The New Normal and most recently, Foreign Policy: Thinking Outside the Box. You can follow him on Facebook, Twitter, and YouTube. To subscribe to his monthly newsletter, send an e-mail with the subject line "Subscribe" to icps@gwu.edu.