The Virtue of Austerity
“There’s no nobility in poverty anymore,” says Charlie Sheen in an early scene in Oliver Stone’s Wall Street (1987). The statement aligned him with the wealth-obsessed culture of the 1980s, heralded by the deregulatory economic reforms of the Reagan administration. The principle is later summarized, even more succinctly, by Michael Douglas’s character: “Greed, for lack of a better word, is good.”
Was there a time when there was nobility in poverty? The attitudes of the Wall Street characters represent a period of particularly unfettered capitalism, but the origins of the capitalist system took root millennia ago. Throughout human history, there have always been cycles of boom and bust, extreme poverty coexisting with enormous prosperity for the few. Nonetheless, there have been times and places when the pursuit of wealth was championed less fervently, and the display of wealth was less fashionable.
One place where this was true was post-WWII Britain. This was a resource-strapped society where moralists “seemed to idealize men who worked exorbitantly long hours, scorned holidays and judged themselves virtuous for spreading stress in their offices,” writes the historian Richard Davenport-Hines in An English Affair: Sex, Class and Power in the Age of Profumo (2013). Ostentatious display was considered a faux pas and austerity was idealized: “It was revealing of the postwar pusillanimity that rich people enjoying good parties were thought provocative.” Hence the strange suspicion in many quarters when material standards began to improve in the late 1950s and early 1960s, accompanied by distinct shifts in social standards.
Can we learn from this more iconoclastic interpretation of wealth and its display? The capitalist theory of perpetual growth is giving way to a realization that the economy cannot expand forever, much less without perpetuating irreparable damage to the planet. Contrary to the claims of some green energy activists, writes Vaclav Smil in How the World Really Works (2022), we cannot simply decarbonize without radical consequences, because “we are a fossil-fueled civilization […] and we cannot simply walk away from this critical determinant of our fortunes in a few decades, never mind years.” We already know we need to learn to reduce consumption, but we have not yet begun to take the necessary strides toward changing our cultural attitudes in favor of moderation and restraint.
The Energy Economy
There are different ways of defining capitalism. According to the International Monetary Fund, the pillars of capitalism are private property, self-interest, competition, a market mechanism that determines prices in a decentralized manner, freedom to choose (in regard to consumption, production, and investment), and a limited role for the government. The name, however, also implies everything that is most distasteful about the system, namely, its preoccupation with the accumulation of capital, or wealth.
A cultural obsession with wealth lends itself to a preoccupation with spending, and thereby displaying, that wealth. This cycle of buying and selling is the real backbone of capitalism. It is the process of accumulation that consumes the planet’s natural resources in unsustainable quantities, in terms of both the raw materials required for material products and the energy on which transportation and production depends.
Smil defines the four pillars of modern civilization as cement, steel, plastics, and ammonia, all of which are heavily derived from fossil fuels. Global economic growth also depends, to some extent, on global population growth. “A key factor to economic prosperity in the developed world from the end of World War II through the 1980s was an ever-increasing working-age population,” writes Adam Hayes. Much of today’s working-age population would not exist without ammonia.
Although ammonia is produced in much smaller quantities annually than Smil's other “pillars” (180 million tons, as opposed to 4.5 billion tons of cement, 1.8 billion tons of steel, and 400 million tons of plastics), it is the most important, because “its synthesis is the basis of all nitrogen fertilizers, and without their applications it would be impossible to feed, at current levels, nearly half of today’s nearly 8 billion people.”
Theoretically, one could therefore disproportionately slash the amount of fossil fuels consumed in cement, steel, and plastics production just by reducing the amount of ammonia produced (and consumed) every year. There are already compelling Malthusian reasons to reduce or even reverse the expansion of the human population, with the UN reporting in 2022 that “greater sustainability will require a progressive decoupling of the growth in population and in economic activity from a further intensification of resource extraction, waste generation and environmental damage.” There are also signs that human fertility levels are beginning to collapse, which could inadvertently help with our energy issues (and, by extension, climate issues), but also presents a worrisome prospect for the global economy (and could, potentially, become as much of a threat to human survival as climate change).
Sacrificing economic growth means sacrificing a certain amount of material comfort, or at least a certain amount of our material possessions. This is an area in which most advocates of climate action have not distinguished themselves by renouncing materialism relative to climate skeptics. Younger generations, distinguished by their more progressive politics, remain addicted to smartphones, gas-guzzling vehicles, and other energy-inefficient prime movers of the fossil fuel industry. Distinguishing between self-interest and rational self-interest is a nuanced task to which we typically devote disproportionately little of our time and attention.
Reembracing Austerity
Much of what we consume on a daily basis could be reduced. Most of us could afford to eat less, spend less, and generally find ways to create a much smaller carbon footprint. Not only do we not need to leave our phones on their chargers all night, we also do not need to buy the latest upgrade every time one hits the market. The overwhelming majority of our disposable income is wasted on activities and purchases which ultimately contribute to the consumption of fossil fuels.
We will never be able to make these adjustments if we cannot reformulate our cultural attitudes toward wealth and consumption. This is where the example of post-WWII Britain has the potential to be instructive. What if, instead of priding ourselves on our ability to make ourselves comfortable by spending money and cocooning ourselves in creature comforts, we instead embraced an ethos that championed the ability to make do with less?
It is a cliché to suggest that people who live in poverty brought it on themselves by being unable to manage their finances but, as the nonfiction author Michael Lewis observed in Flash Boys: A Wall Street Revolt (2014), it has been noted by foreign observers that, in America, even the homeless are profligate. There is a convincing case to be made that wages in the United States have not kept pace with inflation for many years. However, an inability to live within one’s means is not limited to low-income earners. In early 2022, according to CNBC, up to 64% of Americans were living paycheck to paycheck, including almost 50% of those earning six figures.
The capitalist value system prizes the accumulation of wealth, but it does not condemn wasting money as much as it punishes the failure to make a lot of money. Hence the paradox wherein a six-figure earner living paycheck to paycheck but driving a bigger, less fuel-efficient car somehow still enjoys higher social status than a five-figure earner with no personal financial safety net. In post-WWII Britain or Depression-era America, the higher earner might have been condemned for pointlessly wasting more of their precious resources.
Valuing austerity should not necessarily be equated with a preoccupation with maximizing individual savings. That would be indistinguishable from the capitalist obsession with acquiring wealth for its own sake. It has been noted throughout economic history that the healthiest approach to managing money is to seek a careful balance between saving and spending. As another Wall Street character puts it: “Money’s only something you need in case you don’t die tomorrow.” Dante’s Inferno placed spendthrifts side by side with the miserly in the Fourth Circle, reserved for those condemned for the mortal sin of Greed.
The Reagan era’s reversal of this ancient wisdom (ostensibly in the name of conservative, Christian family values, no less) accelerated the degradation of the environment as much as it pulverized whatever “nobility” Americans had ever found in poverty. Reconsidering the values of the Reagan Consensus does not mean embracing poverty for its own sake, but it does mean mitigating inequality by reducing unnecessary consumption and conspicuous spending.
The effects on the economy might be genuinely destructive in the short term, but the evidence is overwhelming that current population levels, economic growth, and resource consumption are unsustainable. Reducing demographic pressures is the only way to reduce demand for Smil’s four, fossil fuel-dependent pillars of civilization. A smaller economy is almost certain to result from a reduced population, and is bound to be a result of widespread reduced consumption. The only alternative, however, seems to be a culture that values constant, destructive consuming over moderation. The underlying concern is a question of what we choose to value.
