Does Capitalism Make Us More Materialistic?
There was a time when the advocates of socialism argued that it would lead man to material abundance, whereas free-market capitalism would lead only to increasing misery and would ultimately collapse under its own internal stresses. You don’t hear that too much these days, and for good reason. A century of empirical evidence has shown the contrary—that the free market leads to increasing wealth and material freedom, while socialism leads us only to poverty, state supremacy, and ultimately, mass murder.
These days the attack has shifted. Capitalism does not lead us to poverty; it leads us to too much wealth. This makes us “greedy” and “materialistic.” It leads us to excessive “consumerism.”
Indeed, there has been a recent resurgence of academic critiques and self-help literature lamenting excessive “materialism” and “consumerism,” much of which lays the blame squarely at the feet of free-market capitalism and its lifeblood, money. But does having more money really lead us to a narrow concern with material possessions? Does it lead us to an excessive desire for material wealth? Does it lead us to these things at the cost of spiritual impoverishment and the sacrifice of other concerns?
Alienable and Inalienable Goods
There are a great many nonmaterial goods that are of value to people, and for good reason. We value such things as dancing, singing, learning to play the piano, or watching a beautiful sunset. We value time to relax, a friendship, a romance, or any other positive personal relationship. We value our knowledge, our health, our physique, and many other personal characteristics. These all have the potential to have a valuable effect on our life. All are “goods” in the economic sense, and all may be rationally pursued to satisfy our desires and live a good, full life.
Some things of value are alienable goods: they can be transferred to others. So, for example, we can give a gold watch or a pair of shoes to another person. We can teach a person to play the piano or supply them with a cruise on a ship. But some things are inalienable goods: they cannot be transferred to others. We cannot transfer our time, our knowledge, our health, or our physique to another person. They must acquire these things on their own, by their own effort. And of course, some goods exist only as the inalienable possessions of others. Our friendships exist in the thoughts and experiences of our friends and ourselves. Our romances exist in the desires and life experience of our mate and in our own desires and experiences.
Although inalienable goods cannot be transferred to others, this does not mean that they are innate. Some inalienable goods require effort and time to acquire, as with knowledge, education, and other personal achievements. These goods must be weighed off against other goods that require time and effort to acquire, including many alienable goods. Thus, although we cannot acquire inalienable goods by trading away alienable goods in the market, we nonetheless make choices between these goods in the time and effort we allocate to their acquisition.
For this reason, the analysis of inalienable nonmaterial goods is well within the province of economics and does not present any particular problem for economic analysis. For, as Rothbard observes,
Economics … is not a science that deals particularly with “material goods” or “material welfare.” It deals in general with the action of men to satisfy their desires, and, specifically, with the process of exchange of goods as a means for each individual to “produce” satisfactions for his desires.1
In fact, as we have seen, economics deals also with the process of “exchange” within ourselves, through the allocation of time and effort to competing desires.
Money and Alienable Goods
Alienable goods, by definition, can be transferred to others, and can therefore be exchanged with others for some other alienable good. In particular, alienable goods can, in principle, be exchanged for money—that is, they can be bought and sold. Of course, this presumes a willing buyer and seller, and in many cases these will be absent. But notwithstanding this fact, it is generally the case that, absent legal restriction or widespread social repugnance, any alienable good may be bought or sold, if the price is right.
Thus, when one acquires money, one is essentially acquiring the ability to acquire alienable goods. Money is a surrogate for alienable goods. Presuming that the money in question is sufficiently sound to be of value to others,1 one can acquire money, safe in the knowledge that this can be exchanged for whatever alienable goods are desired.
By contrast, inalienable goods cannot be sold, since, by their nature, they cannot be transferred from the seller to the buyer. Hence, one cannot buy good health from another person, though one can buy fresh fruit, vitamins, an exercise bike, or a session in the gymnasium with a personal trainer.
If all goods were alienable, such that all could be bought or sold, then we could rationally be concerned solely with the acquisition of money as a surrogate for the acquisition of these goods. Thus, if a person were entirely uninterested in any inalienable goods of any kind, then he would indeed be the most extreme caricature of the “vulgar materialist.” He would work almost to the point of exhaustion, desiring his health and energy only to the extent that they would allow him to continue his work and to consume the goods that his money buys. He would give charity only if he could somehow gain a collateral advantage to get more money. He would desire friendships and other personal relationships only to the extent that they could make him more money.
Preferences between Al
Article from Mises Wire