The optimal material threshold: Toward an economics of sufficiency

This paper begins by reviewing the empirical studies that have examined the correlation between income and self-reported happiness. The evidence suggests that once people have their basic material needs adequately met, the correlation between income and happiness quickly begins to fade. The analysis proceeds to consider the various explanations for this so- called 'income-happiness paradox,' and it also considers the radical implications this paradox has for people and nations that are arguably overconsuming. The paper concludes by outlining what will be called an 'economics of sufficiency,' drawing on degrowth and steady-state economics. Increasing material wealth has been, and remains, one of the dominant goals of humankind - perhaps the dominant goal, even if for most people historically it was a goal that would never be realised. Given the extremely low material standards of living endured by most people throughout history, and indeed, by great multitudes around the world even today, the desire for more wealth is hardly surprising. When people are hungry, they understandably desire more food; when people are cold, warmer clothing and adequate housing are critically important; when people are ill, they naturally want access to basic medical supplies; etc. In conditions of material destitution, the pursuit of more material wealth seems wholly justifiable. But what about those of us in the highly developed regions of the world who generally have our basic material needs for food, shelter, clothing, etc., adequately met, and who even have some discretionary income to purchase things like alcohol, microwaves, non-essential clothing, takeout food, movie tickets, books, and even the occasional holiday? In these relatively comfortable material circumstances, is more material wealth a goal for which we should still be striving? Or should we now be dedicating more of our time and energy to other, less materialistic pursuits? In other words, when it comes to material wealth - money, possessions, assets, etc. - how much is actually needed to live a meaningful, free, and happy life? These questions are of the highest importance, today more than ever before. At a time when Earth's ecosystems are already trembling under the weight of overconsumption (MEA, 2005), increasing the consumption levels of those who are already materially well off seems to be a highly questionable objective, despite it being an objective whose legitimacy is widely taken for granted. Furthermore, the extent of global poverty strongly suggests that the wealthier sectors of the global population (say, the richest one billion people) should restrain their

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