On unlimited wealth, or the dream of it

| March 31, 2010

I have begun reading Linchpin by Seth Godin. One topic I find interesting is Godin’s support of the idea of an “unlimited” market (“Limited or Unlimited,” p. 30). I am always struck by the optimism of this perspective. For on this view, one should not behave as if there is a limited market for goods, but rather as if there is no limit to the money to be made. To me, this seems counterintuitive. I guess I don’t fault Godin’s perspective – that it may be advantageous to act as if a market is unlimited – so much as I am skeptical of the alleged fact itself.

I suspect there are economists out there with some thoughts about this, but I haven’t run into them yet lately. So, let’s run a thought-experiment.

Modernized countries have populations that increasingly rely on the labor of poorer countries. We (my fellow middle-class Americans) buy a lot of stuff, but we’re also thrifty. So, for example, when we’re faced with the choice of expensive paper towels or cheap paper towels, we’ll go out of our way to find the best towel at the best price. (For many of us, this activity takes up a considerably larger amount of our time than we’d like to admit.)

And that’s how we get to the part about American auto-makers shuttering their doors, and whole regions of the U.S. bereft of jobs: production happens in China; consumption happens in America. This seems inherently unsustainable: no sooner do we learn about unions driving jobs oversees than we learn about unionization oversees. (To say that this kind of economic growth is sustainable reminds me of the explanation of how the whole universe rests on the back of a turtle.)

But Godin chimes in and reminds us not to worry – that if we’re good enough, there will be jobs for us. Here’s why I think – even counterintuitively – that he’s right:

There’s lots of wealth in the world. Now you’re thinking, “Of course there’s a lot of wealth in the world, Brian, but the point is that is may not be available to the ever-expanding middle class (especially if the ranks of the lower class grow thin).” But one fact (if true) could turn this worry on its head: that people – especially extremely wealthy people – would be happy to live lives of extreme asceticism if they experienced an equally good kind of social and community life.

Or something like that.

I’m not saying this is the case, but it’s the only way I’ll buy into the  vision of “unlimited markets.” On this view, trillions and trillions of dollars that are currently tucked away in capital (of one form or another) could be invested in labor, service, and industry (in the broadest sense). Without interest in widgets and dongles of every kind, that labor could be plied to strengthening good ol’ human interactions… and Godin could claim that his “linchpin” fits nicely within this system.

Perhaps the inner communist in me even hopes it’s true. If so, it certainly casts our obsesssion with material wealth and comfort in a tragic light.