Will we continue to allow economic development to provide better opportunities for people to have happy lives?

Some friends who have visited my blog have told me that they have had some difficulty in understanding the purpose of my recent series of posts related to emancipative values. This post is dedicated to those people.

Recent posts on my blog have been concerned with the future of human flourishing in wealthy countries. Is the future likely to bring greater and more widespread opportunities for people to live happy lives in wealthy countries?

 Before attempting to summarise my answer that question I need to show how economic development produced better opportunities.

My story begins a few centuries ago when it was normal for the vast majority of people in all parts of the world to be preoccupied with obtaining adequate food and shelter. The threat of famine was never far away, even though there were seasons when food was bountiful and some centuries when the pressure of population on food supplies was reduced in the aftermath of plagues.  For the most part, people lived in small communities isolated from the outside world. They often lived under the threat of being robbed by their own rulers as well as by people in neighbouring communities. It was common for people who did not share the religious beliefs of their rulers to be persecuted and to be deprived of property and even their lives. Violence was rife despite widespread religious observance.

Everyone should be aware that the process of economic development began in earnest a couple of centuries ago with the industrial revolution in north-eastern Europe. Important technological innovations had previously occurred in various parts of the world, but this was the first time that technological advances led eventually to a sustained improvement in material living standards for large numbers of people.

A range of factors help to explain why the industrial revolution occurred when and where it did, but values and beliefs that became more approving of markets, experimentation, innovation and entrepreneurship were of crucial importance. Market exchange promoted more trustworthy behaviour, which reduced the cost of doing business and encouraged innovative investment activities. The new values and beliefs favoured greater economic freedom, including by removing regulatory barriers that had been protecting traditional patterns of production from competition. Firms were free to use new technology that enabled them to produce at lower cost and they were free to sell those goods to consumers.

Over the following couple of centuries, economic development provided greater economic opportunities to vast masses of people, first in Europe and then in many other parts of the world. As people satisfied their basic material needs to a greater extent they gave higher priority to such matters as having freedom to choose what kind of work to do, where to live and who to live with, having a say in community decisions and ensuring equal rights for women and members of ethnic minorities. That is what we mean by the growth of emancipative values.

So, will economic development continue to produce better opportunities for people to live happier lives in wealthy countries? There are several aspects to this question, but the one that concerns me most is that prevailing values in high income countries might take us further towards an ‘entitlement culture’ that will threaten economic freedom and further economic development.  

It is not hard to find evidence of the emergence of an entitlement culture in wealthy countries. Interest groups that might have had their origins in removal of discrimination or providing minimal opportunities to needy groups now often make a lot of noise in seeking additional entitlements for the people they represent. That tends to result in more government regulation of business, higher government spending and higher taxes i.e. a decline in economic freedom.

However, the results of my research provide some optimism that the entitlement culture can be prevented from taking over and bringing economic development to an end, along with the emancipation that has accompanied it. While economic freedom has fallen in some wealthy countries (e.g. US and Japan) it has risen in others (e.g. Sweden and Norway). There is evidence that the priority that people give to economic growth has risen in some wealthy countries in response to economic crises (e.g. Sweden) and that when this has occurred, economic freedom has tended to rise.

Most importantly, it is a mistake to think that there is some kind of battleground in society with people with high emancipative values on one side pushing for an entitlement culture and materialistic people on the other side pushing for higher economic growth. I could not find much evidence of a tendency for people with high emancipative values to give lower priority to economic growth – even after I went looking for it!

If you want more information on the  research that lies behind this post you will find relevant links in my last post. 

Can the people in wealthy countries continue to climb the emancipation ladder?

This article is my attempt to provide an overview of the series of posts I have been writing about emancipative values.

A good place to start is by explaining what I mean by an emancipation ladder. The basic idea is that the opportunities for individuals to live happy lives are constrained by the circumstances in which they live. The opportunities available to people on the bottom rung of the ladder are heavily constrained. They are likely to be illiterate, to live in small communities with poor communication with the outside world and to be preoccupied with satisfying basic material needs. As these constraints are lifted, more people are able to climb to higher rungs of the ladder, where opportunities are greater. Climbing the ladder may not make our lives blissful, but it emancipates us from the constraints imposed by predation, persecution and poverty.

The concept of emancipation that I am using here owes a great deal to Christian Welzel’s book Freedom Rising, which I reviewed on this blog a few weeks ago. Professor Welzel’s research suggests that as a consequence of economic development people have tended to adopt emancipative values - showing more concern about such matters as personal autonomy, freedom of choice, having a say in community decisions and equality of opportunity. In an increasing number of societies, larger numbers of people have come to recognize the value of civic entitlements - such as the right to vote - and have used their growing material resources, intellectual skills and opportunities to connect with others to take collective action to achieve such entitlements. The process is ongoing, with greater concern being shown for opportunities available to ethnic minorities, gender equality, entitlements of the disabled etc. as material living standards have risen and emancipative values have strengthened.

However, the people in wealthy countries can expect to experience great difficulty climbing further up the emancipation ladder if social norms and ideologies turn against economic development. As societies become wealthier, economic development becomes less dependent on factories belching smoke and does not necessarily involve vast property developments that destroy the natural beauty of the landscape, but it still requires ongoing advances in technology, innovation and productivity growth. If economic development ceases we can expect our societies to become meaner, with greater disputation over whether different groups in the community are getting a fair share of the national economic cake. (Benjamin Friedman made some valid points about such matters in his book, The Moral Consequences of Economic Growth, which I discussed here a few years ago.)

My understanding of the economic development process suggests strongly that the chances of economic development are greatly improved when prevailing social norms and ideologies support economic freedom i.e. the rights of individuals to use their resources for purposes they choose, including endeavours involving the voluntary cooperation of others. As I see it, the most plausible explanations of why the process of economic development began when and where it did - in north-eastern Europe a couple of centuries ago - are those which emphasize changes in norms and ideologies that legitimised systematic experimentation in the realm of technology as well as in science, and became more approving of innovation and markets. (For example, the views of Joel Mokyr and Deidre McCloskey, which I wrote about here.) Research explaining current differences in per capita incomes in different countries (including some referred to in another post ) suggests that a strong economic culture – with emphasis on interpersonal trust, respect for others, individual self-determination and individualism – is complementary to economic freedom in fostering economic development.

The relationship between economic freedom, average incomes levels and emancipative values is summarised in the chart below for 54 countries for which comparable data is available.

The question of whether people in wealthy countries will continue to be able to climb the emancipation ladder hinges on whether their values will remain sufficiently supportive of economic freedom. Are emancipative values developing in ways that increasingly emphasize personal freedom and individual responsibility, or are they morphing into an ‘entitlement culture’ that will threaten economic freedom and further economic development?

The main points that have emerged from my research are as follows:

• There is evidence that, other things equal, individualistic societies tend to have smaller governments and that countries with high emancipative values tend to be individualistic. See: Do emancipative values support economic freedom?
• There has not been a general tendency for economic freedom to either rise or fall over the last few decades in wealthy countries with rising emancipative values. Economic freedom has fallen in some such countries (e.g. US and Japan) and risen in others (e.g. Sweden and Norway). See: What is the relationship between emancipative values and economic freedom?
• There is evidence that economic freedom tends to rise in countries with a strong economic growth ideology i.e. where people consider economic growth should have high priority as a national aim and have attitudes favourable to scientific advances. See: Can we identify the characteristics of national ideologies that promote economic freedom?
• There is evidence that the priority given to economic growth has risen in some wealthy countries (Sweden and the US) in response to economic crises. See: How have attitudes towards economic growth changed since the1990s?
• There is not a consistent tendency for people with high emancipative values to give lower priority to economic growth than do other people in high income countries. See: Do people with strong emancipative values give lower priority to economic growth?

The results of this research provide some grounds for optimism that wealthy countries will maintain sufficiently high levels of economic freedom to enable their citizens to continue to climb the emancipation ladder. However, as I see it, actual outcomes are likely to depend on the quality of the political institutions that have evolved in different countries.

Do people with strong emancipative values give lower priority to economic growth?

This question is worth considering because previous posts in this series (links here) have discussed how economic development has been associated with the strengthening of emancipative values and more widespread opportunities. This means that the ongoing generation of more widespread opportunities for individual human flourishing depends on a substantial proportion of the population maintaining a fairly positive attitude towards economic growth.

The measure of priority given to economic growth that I have been using comes from World Values Surveys (WVS) which asks people to choose from four options what they consider to be the most important aim for the country they live in over the next ten years.  The options are: a high level of economic growth; strong defence forces; people have more say about how things are done at their jobs and in their communities; and trying to make our cities and countryside more beautiful. I have used the percentage for whom economic growth is first choice as an indicator of priority given to economic growth.

The perception that non-economists have of economic growth may be a much more defensible concept than growth in per capita GDP as conventionally measured. I don’t have concrete evidence, but I suspect that when non-economists favour economic growth what they have in mind is expansion of economic opportunity, rather than a particular income concept.

Before looking at the evidence I thought that people who have strong emancipative values would tend to give relatively low priority to economic growth because “people have more say” is one of the items which Christian Welzel used in constructing his emancipative values index for his book, Freedom Rising. By definition, people who give highest priority to 'more say', give lower priority to economic growth.

My main focus is on the extent to which the priority given to economic growth by people who hold emancipative values differs from that of the population as a whole in wealthy countries. Except where indicated, I have selected indicators from the latest WVS round which correspond to components of Welzel’s index. Countries included in the analysis are those with relatively high incomes for which data is available in the latest round of surveys i.e. 2010-14. (New Zealand is excluded from the analysis because of a high non-response rate on the question relating to priority given to economic growth.)

As a preliminary exercise, Chart 1 compares the overall average priority given to economic growth in each country with that given by members of different demographic groups. There does not seem to be any consistent pattern of difference between various groups within countries, except perhaps a tendency for young people to give lower priority to economic growth.

Chart 2 compares the overall average with priority given to economic growth by people with different views on desirable attributes for children to learn at home. Independence and imagination reflect positive emancipative values, whereas obedience is considered as negative. Perhaps those who see imagination as a desirable quality may be slightly less enthusiastic about economic growth, but otherwise there does not appear to be a consistent pattern.

Chart 3 compares the overall average with those of groups expressing strong views on whether divorce, abortion and homosexuality are justifiable. Again, there does not seem to be any consistent pattern.

Chart 4 compares the overall average with the priority given to economic growth of people favouring gender equality. The chart shows some interesting facts e.g. people in Australia who strongly disagree that men make better political leaders than women are much less likely to view economic growth as having high priority than are other people in Australia. However, no consistent pattern of difference between the different groups in different countries is obvious.

Chart 5 compares the overall average with the priority given to economic growth of people who see protecting freedom of speech and giving people more say in government decisions as particularly important. In this instance a fairly clear pattern is evident – a lower percentage of those holding emancipative views give high priority to economic growth.

This chart also shows the growth priority of those who consider protecting the environment should be given priority, even if it causes slower economic growth and some loss of jobs. This item is not a component of Welzel’s emancipative values index, but it also worth considering the priorities of those who see environmental protection as having high priority. As would be expected given the wording of the question those who consider protecting the environment should have high priority are less likely to give high priority to economic growth. However, the difference is not as large as I thought it might be.

The general conclusion that I draw from this exercise is that there is not a consistent tendency for people with strong emancipative values to give lower priority to economic growth than is given by other members of the populations of wealthy countries. People who attach great importance to having “more say” seem to be less inclined than the rest of the community to see economic growth as having high priority, but that observation does not apply consistently to people who attach importance to individual autonomy, respect choices that individuals make in their personal lives and favour gender equality. As a general rule, the differences in economic growth priorities of people in different countries are more marked than the differences between different groups within countries.

How have attitudes towards economic growth changed since the 1990s?

This question is of some interest in its own right, but my interest also stems from the relationships between the priority which people give to economic growth, growth outcomes and emancipative values that promote widespread opportunities. One particular issue that I want to explore is whether the growth of emancipative values must eventually come to an end because it involves, among other things, more emphasis on “people having more say in how things are done” (e.g. workplace democracy) rather than economic growth. My last post explains the context more fully.

For a couple of decades now, World Values Surveys have been asking people to choose from four options what they consider to be the most important aim for the country they live in over the next ten years.  The options are: a high level of economic growth; strong defence forces; people have more say about how things are done; and trying to make our cities and countryside more beautiful.

The focus of the following analysis is on the United States, Sweden, Australia and New Zealand. Sweden is of particular interest because it has high and rising emancipative values, the US is of interest because it is at the centre of the universe, Australia is where I live and NZ is nearby - just across the ditch. The surveys were conducted in 1995-98, 1999-04, 2005-09, 2010-14 (referred to respectively below as 1996, 2002, 2007 and 2012). I accessed the data using the World Values Studyonline data analysis facility – which is great for this kind of exercise.

The first chart shows how the priority given to economic growth has changed over time for all four surveys for which data are available and the second shows in more detail how priorities have changed since the mid 1990s.

The first chart shows that people in the United States tended to give relatively low priority to economic growth at the time of the first three surveys. The second chart suggests that the increase in priority given to economic growth in the latest survey has occurred at the expense of a decline in priority given to people having more say. The change in priorities presumably reflects a tendency for people in the US to feel poorer following the GFC.

The relatively high priority given to economic growth in Sweden in all four surveys is particularly interesting in the light of the high and rising emancipative values in that country. It seems likely that priority given to economic growth in Sweden was lower during the 1980s, before an economic crisis in the early 1990s. The WVS indicate that priority given by people in Sweden to having more say (aims of respondent data) was certainly much higher in the early 1980s than in the mid 1990s.

This analysis supports the general conclusion that I have been coming to from previous posts that my doubts about whether the rise of emancipative values in wealthy countries will be sustainable may not be well founded. There seems to be fairly strong grounds for optimism that voters in wealthy countries are capable of managing the tension between their non-economic social objectives (e.g. their desire to have more say) and their desire for the things that economic growth can buy.