mmcirvin: (Default)
mmcirvin ([personal profile] mmcirvin) wrote2004-12-22 09:27 am

Wealth and risk

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.

[identity profile] swinehund.livejournal.com 2004-12-22 08:03 pm (UTC)(link)
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.

[identity profile] mmcirvin.livejournal.com 2004-12-22 11:58 pm (UTC)(link)
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

[identity profile] swinehund.livejournal.com 2004-12-23 07:13 pm (UTC)(link)
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

[identity profile] swinehund.livejournal.com 2004-12-23 07:40 pm (UTC)(link)
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.