Wealth and risk

[mmcirvin]

Matthew Yglesias and Mads Kvalsvik have good things to say about wealth, risk and American society.

Discussions of wealth and economic class in the US often go off the rails because people start talking about the purchase of things perceived as luxury goods. It's a mid-20th-century notion of wealth, the source of all the jokes in which the rolling-pin-wielding wife badgers her husband to get a raise so they can buy a dishwasher or a TV. Dishwashers and TVs aren't all that expensive these days. They're available to the masses, and that's nothing to sneeze at; I think that's great. But housing is expensive, and, especially, security is expensive: by which I don't mean safety from robbers and terrorists, but things like health insurance, (as I've harped on before) reasonable maintenance of your teeth so they don't all fall out and give you infections, and savings for education and retirement and not being kicked out on the street if you end up out of a job for a year or two. Scoffing at people who say they're poor and have big TVs is dumb, since the cost of big TVs (if you're not too picky) is minute compared to this stuff. Foregoing the big TV is not going to help you a whole lot.

Comments

[lots42.livejournal.com]

"OMG!!1 That poor person has a fancy car!"

"Maybe they owned the car before they got poor."

"Guh....my brain broke."

[crazysoph.livejournal.com]

*nods* I've watched this in a family I know, slowly imploding (and not an effing thing I can do, directly), and the reports of my friend in this family of outsiders' "helpful suggestions" like getting rid of her internet connection... (because, like, all the budget problems are her fault for not "being available" - code for "internet addiction", nevermind the flat-fee connection) which is peanuts compared to their overall needs of shelter, insurance, etc. What is it about these particular "discretionary" purchases that seems to bring out the Calvinist in people? (That looks rhetorical, but any thoughts you bring to bear on this would be read with interest.)

Crazy(and afraid I'm being terribly lazy with my terms... be gentle!)Soph

[mmcirvin.livejournal.com]

I think it's just habits of thought remaining from a preindustrial or early-industrial age. We think of stuff getting more expensive as you go up Maslow's hierarchy of needs, but that's not necessarily true any more; some of the "self-actualization" needs are pretty cheap to satisfy compared to some of (what we now think of as) basic survival needs.

This actually connects to things that I remember Benjamin Rosenbaum and Cory Doctorow saying at Worldcon. In some ways we live in what somebody from 200 or even 100 years ago would call a post-scarcity utopia, but in real terms, some things are still as expensive as or more expensive than they were then. The two big categories are conveniently located real estate and the services of highly skilled professionals.

[crazysoph.livejournal.com]

I would have liked to have been at that discussion. Ah well, can't be everywhere at once - know anyone who's archived a transcript (maybe? oh, how this girl can dream??), for instance? Surely their discussions highlighted some of why we're not living in a work-free future vision of our early science fiction literature? (I want my jetpack!! *grin*)

I hadn't thought about this point you make, well, two points really, pre-industrial age attitudes (I think, in talking to dear_hubby, the word "Calvinist", his Dutch-person code for the same set of attitudes, slipped out) and an interaction of price-of-necessities with the values expressed in Maslow's hierarchy of needs. I can't quite explicate them for myself, so if you'd had a chance to think some more on this in a post, I bet you'd find a ready audience.

Crazy(well, in me at least, and by extension, dear_hubby)Soph

[mmcirvin.livejournal.com]

There doesn't seem to be a transcript anywhere; there's a brief description of the panel here (http://www.livejournal.com/users/retch/251047.html) (it's true: the moderator didn't let Buckner talk enough) and more about content here (http://changesurfer.com/2004/09/post-capitalist-sf.html), and here's my summary and remarks (http://www.livejournal.com/users/mmcirvin/2004/09/05/).

[pentomino.livejournal.com]

Cars are another problem. I know a couple that has three cars, all unusable, and huge budgetary problems.

They do have multiple working televisions, it seems -- but no cable. But they do have a cable modem.

[mmcirvin.livejournal.com]

Cars are one of the remaining ways that people can actually screw themselves on luxury items, because new cars are pretty damned expensive. I know people who buy a new one every year and can't figure out why they can't pay bills.

But you can also get stuck if you don't do this, because repairing broken cars is expensive-- it usually takes skilled professionals to fix them. And not living with a car usually comes at an expensive premium in housing prices and restricted choices.

[swinehund.livejournal.com]

This is a very good point, but depending on the level of discretionary spending you're talking about, bad decisions could have larger effects.

I am thinking more in the case where someone has an income so low that (for example) their smoking habit results in poor nutrition because they can't buy vegetables for having bought cigarettes. Or if an income tax refund goes towards a big TV when it could go towards a wardrobe that offers better employment prospects, or paying off a stressed credit card bill. I suspect that I am talking about meaner standards of living than you are, though.

I also suppose this is more of an issue in the US. Here, I have always had access to doctors (if not perscription medication), and though the decision to go to college should not be taken lightly (because even government loans have to be paid off), I knew that if and when I did decide to go, I would be more restricted by my marks than by my income. I doubt I would have been eligible for non-government student loans when I entered university, despite having high school marks in the low 90s (which only earns small entrance scholarships). I have a hard time imagining how much more frustrated I would have been if I had been a US resident.

[mmcirvin.livejournal.com]

People can and do screw themselves over through bad decisions everywhere; I've seen that happen. But in the US, more than in most developed countries, it's a lot easier to get into a situation through no fault of your own in which your standard of living is apparently tolerable, but you're well and truly boned if you get sick or injured.

Mostly I'm tired of people insisting that there is essentially no poverty in the US because the people who are supposedly poor can still buy cheap consumer goods at Wal-Mart.

I just woke up

[swinehund.livejournal.com]

That's fair, but I'm not really convinced that it's been drastically different historically. The US may be a bit behind things on social security, but I have a hard time imagining that there was very good dental coverage for anyone but the very wealthy 100 years ago. I'm not even very convinced that the very wealthy had good medical coverage 100 years ago, given the state of medical technology at the time. So housing, education, retirement, and unemployment buffers haven't changed that much (although it's arguable that education wasn't an assumed expense as often as it is now?). What I'm trying to argue is that the standards of living have changed considerably, and there are more expenses for the average person than there used to be. I vaguely remember the Economist doing an article on how we're probably on the flatter part of the logarithmic curve of 'quality of life as a function of health care expenditure'. I assume this will only hold true until we have more drastic improvements in medical technology (like if we can ever swing 500-year lifespans, or significant enhancements). I don't want to (mis)represent too much of the article though.

My main point (I'm getting around to it!) being that living in modern developed nations has probably required the addition of both luxury items (one-time expenses) and the securities you described (more continuous expenses) in order to secure a reasonable standard of living for its citizens. The purchasing power alone of most developed nations makes the luxury goods an easy buy if they're produced on the backs of less-developed nations, so most of us have them. The securities are something that have to be provided more locally, though, and some nations have been quicker on the uptake with that than others have. I do agree that the provision of luxury goods has been flaunted to draw attention away from the more expensive securities issue, but I think that's commonly been the case in recently-wealthy societies, because creating peaceful and egalitarian societies is relatively difficult. I am thinking about the Roman coliseum and rampant Roman unemployment, and how similar that is to the PS2.

What I'm REALLY saying is that I pretty much agree with you, but I'm coming from a perspective of both luxury goods and social security (of the levels we demand currently) as relatively novel things for our fancy nations, not of social security as something that we had in a golden age and have now sold for cheap video game consoles. Not that you were saying that, but I was feeling it in some way that I don't feel like I currently have to justify until I have another cup of coffee. :)

coffee is kicking in now

[swinehund.livejournal.com]

Now to add something valid!

This diversionary reasoning bit is extraordinarily common with humans. Somehow I was involved in a discussion about women's urinating behaviour yesterday (specifically squatting over public toilet seats, which is kind of an absurd thing to do because you can't really get infections from it). I learned that there are parts of the world in which something like 65% of women think that they can contract HIV from public toilet seats, and 88% of them don't use condoms during sex! I have also witnessed plenty of tinkled-upon seats from squatters, and correspondingly terrifying handwashing habits (wherin dabbing a bit of water, and no soap, on the fingertips is considered 'washing').

So I think what we're seeing is a basic human urge to be placated by inane crap rather than actually consider the scary and very complex situation in fuller detail.

[glitter-ninja.livejournal.com]

I've found this to be very true. "Entertainment" is cheap if your entertainment is the Interhole. It's cheaper for us to subscribe to Netflix than it is to subscribe to movie channels on cable. All the "unnecessary" bills we have add up to less than $100 per month, yet if I ever complain about money, Netflix and my ISP are the first things mentioned.

Just last night I went online to find out why one late payment screwed our credit all to hell, and ended up looking at advice for first-time home owners. I am completely convinced I will never own a home. There is no way I could ever afford it. Of course, my mother keeps badgering me about how I'm wasting money by renting. Then again, I remember reading one of those things that get emailed all over creation, which said "Are you old enough to remember when not everyone had to own a home..."