This section is from the "Economics In Two Volumes: Volume I. Economic Principles" book, by Frank A. Fetter. Also available from Amazon: Economic
§ 10. Sudden changes in standards of luxury. Luxury may be in various degrees and correspondingly may have various effects upon the state of wealth and income, and upon their movements. It might accompany a general condition of conservative abstinence, where only the clear surplus of income is given to luxury, preserving a static equilibrium. The degree of luxury may, however, change dynamically toward either extreme. First, it might increase so that it exceeded each spender's clear income, encroached upon capital, and became a policy of prodigality. The result of this must be to stimulate for a time all the trades serving to provide the superfluities, but eventually to leave them without a market for their wares. Thereupon the factors would have to be returned to the use for necessities. The community as a whole would be impoverished as well as the individuals.
Secondly, dynamic change may take the form of the decrease of luxury, expenditure being limited to necessities, and cumulative abstinence being carried to its maximum. The question of the effect of abandoning luxury should this dynamic change occur suddenly, is most difficult. What would happen if everybody at once began to live on the bare necessities of life? If this almost unthinkable change took place, all the factories and agents used for nonessentials would at once lose much of their value. A great industrial crisis would follow, as industry would have to adjust itself abruptly to a greatly altered standard of desires. What would happen, if that standard continued, would vary as human nature varied. There might follow an increase of population, as a result of earlier marriages and larger families; or a great improvement in machinery and other equipment, or an increase of charitable giving, or more probable than all else, a progressive lightening of labor, a use of the surplus resources and energy in study, rest, and recreation. It is well-nigh impossible to suppose that with limited desires for the objective goods of the world there would continue undiminished efforts to produce goods and to save them. That would be miserliness become universal. In actual life changes of standard occur gradually. Economizing in material things by simpler living makes possible not only the increased efficiency of productive agents but the increased enjoyment of immaterial goods, a union of plain living, easy living, and high thinking.
§ 11. Happiness and the simple life. We are concerned here with the economic not with the moral issues involved in luxury, but the line between the two is sometimes hard to draw. Particularly hard is it in answering the question, Does luxury enhance the man's true psychic income? Does a greater expenditure on oneself give a larger life than a moderate expenditure would give ? Surely, it is partly a matter of individual temperament and somewhat a matter of degree. Ostentation has its penalties. Undue striving after effect defeats its own purpose. Happiness results from a harmonious relation between man and the world. Life loaded with too much luggage staggers under the burden. The mere spending of a large income in selfish indulgence absorbs all the energies and interests of some men and women. Not only happiness in the narrow sense, but self-realization, is to such lives impossible. The tired faculties of the Sybarite cease at length to respond to natural pleasures. "When the senses are robbed of their fineness, youth grows blase, mature manhood is ennuied, life is empty- With the growth of incomes grows the strain to reach the self-imposed standards of frivolity. Insanity and suicide are on the increase. The stress of modern life often makes men yearn for the simpler joys. From the days of the Stoics to our own time, philosophers and preachers in times of great material prosperity have risen to praise the simple life, and to declare that happiness dwells not outside of men, that they must seek it within.
Wise consumption depends not alone on physical pleasures but on the spiritual unity of the uses made of goods. Happiness and character are akin in the qualities of simplicity and unity. Happiness, so far as it depends on wealth, is a harmony of gratifications. Character is a harmony of actions. A successful life is a group of complementary deeds. There can be no harmony, without a central, simple, guiding principle. The wise and moral use of goods and the economic use of them have much in common. The results of the choice of goods are reflected in the health, intelligence, happiness, morality, and progress of society.
The spending of income for display has never been very successfully forbidden by law. The Middle Ages are full of futile sumptuary laws which sprang from the envy the nobles had for the wealthy merchants. The growth of good taste may do what formal law found impossible. In these days even when luxury in some respects is increasing, the use of great wealth takes more social directions. It turns from dress toward education, art, music, and travel; then ceases to be applied merely to self and family, and benefits the community. Nowhere else and never before has this movement gone so far as in America with the gifts of millions annually for education, libraries, art, scientific and medical research, and for social betterment.
§ 12. The question of justice. "We leave untouched here the larger moral problem involved in luxury. It concerns the justice of large incomes rather than their spending. Most of the enemies of luxury condemn all expenditure of wealth above a very moderate sum, declaring that it is "unjust" for one man to have much while others are in poverty. This communistic doctrine pervades the teaching of many moral teachers, pagan and Christian. The question of luxury leads back to the question of distribution: Has the man honestly gained his wealth ? If so, he may spend it with good judgment or poor, with good taste or bad, but, so long as he does not injure others in the spending of it, there is much vagueness and confusion in the talk of "justice" or "injustice." Each must in large measure be his own judge of the wisdom of expenditure. If expenditures were regulated by the public, few persons would be within the law. But whatever the goods that are bought, if large incomes are acquired without social service, there may well be talk of injustice.
§ 13. Animal choice. The problems of human life and conduct are never quite simple and there is another side to the question of luxury. Its frankest defenders, while recognizing the fallacy of the make-work argument, and admitting its dangers to the individual, claim that in its general effects it is a great incentive to economic progress. There the argument for luxury has some validity, and to appraise it better, let us recall the function of developing desires in impelling men to greater effort.
Choice among animals depends on the environment; that is to say, all that the creatures below man can do is to take things as they find them. And so the environment shapes and affects the animal. The fish is fitted to live in the water, and suffers and dies if long out of it. The horse and the cow like best the food of the fields. And so each species of animal, in order to survive in the severe struggle for existence, has been forced to fit itself to the conditions in which it lives. After the animal has been thus fitted, its choice is for those things normally to be found in its surroundings. So different animals choose different things, but in most cases it is the environment that determines the choice, and not the choice that shapes the environment. However, migration with the changing seasons, or in search of food, is a most effective method by which the animals, led by their instincts, bring about a change in their environment; and many other methods are employed, such as nest-making and food-storing.