The Peace of Beggars and Kings

Humans, it seems, have an instinctive need to constantly be dissatisfied with our current position:  “If only I had a little more money, I’d be satisfied,”  or “if only I had a bigger TV.”  Philosophers, including Adam Smith, warn against this mindset, fearing it could lead to perpetual unhappiness and there is nothing to prevent us from achieving that happiness already.

This perpetual unhappiness, or dissatisfaction of the status quo, may be philosophically distasteful (and for good reason) but it appears to serve an economic function: the desire to remove this dissatisfaction fosters economic growth.

Man’s wants are indefinite: as we reach new heights, we become dissatisfied with our current position and desire more, and this holds across time as technology and desires change.  A color TV was good enough in the 1960’s, but now we demand HD and “true color” and all kinds of things.  A small electric fan was good enough half-a-century ago, but now air conditioning is ubiquitous (which, in turn, is giving way to “smart homes” and the like).  To quote Frederic Bastiat: “[A] desire to go thirty miles an hour would have been unreasonable two centuries ago but is not so today [JMM: And now 60 miles an hour is too slow!].”

These desires for advancement come about as we satisfy lower-order desires; there does appear to be a hierarchy of wants.  When all resources were devoted to food production and bare substance levels, desires for speedier travel could not be satisfied.  But as food and shelter needs were met more cheaply (that is, using fewer resources to achieve the same or greater output) thanks to agriculture, more resources could be devoted to other things that were luxuries: fancier clothes, faster means of travel, etc.  Those luxuries then became necessities, and as they were satisfied more cheaply, more could be devoted to satisfying other desires that were luxuries, and so on and so on.

When we were hungry, we desired food.  When that was satisfied, we desired shelter.  When that was satisfied, we desired transportation, etc etc etc.  The constantly evolving desire of man, him chasing that peace beggars have that kings fight for, leads to innovation, the satisfaction of new wants, and general progress.

An implication of this discussion is that it reveals the silliness of many arguments against free trade, namely that trade with other nations make us worse off by reducing our productive capabilities or making us dependent on other nations, but that is a blog post for another time.

Of course, this perpetual unhappiness can have significant negative consequences, as well.  Desire can be a sin as well as a virtue.  Imprudent desire can lead to “arms races” where more and more resources are poured into things that give no gains.  Imprudent desire can lead to all kinds of mental illnesses or acts of crime.  Let us not be accused of denying these basic facts.  But let us not make a bigger deal of it than it is, either, and deny ourselves the benefit of economic progress for fear of arms races or illness.

Desire can be a boon.  Indeed, it has been.  It fosters growth and change.  It must be balanced, sure, just like anything.  But desire is not something to be shunned.  Understanding its role in economic progress is important.