Our desire for a balanced life mitigates the classic dilemma of market failure and the environment. A wealthier nation possesses the time, money, and inclination to shift the balance from exploiting the environment to preserving it. We want clean air and water for reasons of health, recreation, and aesthetics. We've developed a sense of moral obligation toward lesser species. We find unspoiled nature pleasant -- although we tend to want clean linens and good food along with it.
Our desires have had a dramatic effect in recent decades. Levels of such major air pollutants as particulate matter, sulfur oxides, volatile organic compounds, carbon monoxide, and lead were at their peaks in 1970 or earlier. Levels of nitrogen oxides peaked in 1980. Water quality has improved since the 1960s, when authorities banned fishing in Lake Erie. Through government and private foundations, we're spending billions of dollars every year to preserve natural areas from development and save threatened species from extinction.
Capitalism's penchant for innovation is helping us act on our concern for the environment. We've developed less polluting gases for air conditioning systems, so we can stay cool at a lower cost to air quality. Fish farms are creating another compromise, providing salmon for our dinner tables while reducing fishing for wild species.
Taking better care of the environment is a natural extension of economic progress. At one time, the air in Pittsburgh was very dirty. It was the price we were willing to pay for all those consumer goods the industrial age offered. It wasn't that we liked pollution; it was just that the price of cleaner air was too high. Today, having grown richer, we can afford the pollution controls that have made Pittsburgh's air sweeter than an ocean breeze. Exploitation of the environment is worst in poor countries, where the economic imperative lies in producing the food, goods, and services needed for daily life. Wealthier countries possess the means and motive for a balanced life, and they do a better job of taking care of their surroundings.
Beyond Statistics
The statistics that measure our economy are reasonably good at counting the value of the cars, clothing, food, sports gear, jewelry, and other goods and services we buy. When we choose an additional hour off over additional income, though, GDP shrinks with the loss of the hour's income and output. We don't count leisure as an economic benefit because we haven't assigned a dollar value to it, even though we opt for time off because it improves our lives.
When it comes to many aspects of a balanced life, our economic barometers come up short. Safety and security are all about preventing bad things from happening. Increased spending on highway safety registers in GDP, but we don't track how much better off we are because of the accidents, injuries, and deaths we avoid. If investing in prevention works, it can actually reduce total output, at least the way we measure it, because less money is spent treating the sick and injured, repairing damage, and replacing lost property.
Variety makes products more valuable by giving us the designs, colors, and features that fit our preferences, but the statistics count everything as plain vanilla. How conveniently our wants and needs are fulfilled doesn't matter to GDP. A cleaner environment makes for a better country, but it may come at the cost of economic growth.
Inflation-adjusted GDP figures indicate economic growth at an annual average of 3 percent during the last two decades. GDP may be entirely accurate as a tally of how much our farms, factories, and offices produce, but it's increasingly inadequate as a measure of how well the economy provides us with what we want. Our ability to choose a balanced life is one of the market's most important success stories.
Some may argue that it isn't the market that makes a balanced life possible. They might concede that our economy produces abundant goods and services, but they credit government agencies, with their regulations, and unions and pressure groups, with their advocacy, for everything else. History tells us government and advocates play their roles, but they aren't the ultimate source of progress. They don't foot the bill for the choices we make to gain a balanced life. Whatever we want must be paid for, and money ultimately comes from the economy.
Companies improve working conditions because they can afford to, not simply because workers, unions, or government agencies demand it. The dismal work environments in now-defunct socialist nations -- all supposedly designed to benefit the worker and eradicate the capitalist -- provide a powerful testament to the fact that good intentions are hollow without the ability to pay.
The main role of collective action has been to act as a voice for what we want. Environmental groups formed as the result of our desire for cleaner air and water. When we take our preferences for leisure and better working conditions to unions or elected officials, they help create consensus among employees and lower the cost of communicating these desires to employers.
In the long run, we cannot afford any component of a balanced life -- be it consumption, leisure, easier workdays, safety and security, variety and convenience, or environmental cleanup -- that we don't earn by becoming more productive. When counting our blessings, we should first thank the economic system. Not federal agencies, not advocacy groups, not unions.
Our quest for a balanced life will never end. The U.S. economy, now recovering from its first recession in a decade, will make our society wealthier in the years ahead. We'll take some of our gains in goods and services, but we will also continue to satisfy our desires for the less tangible aspects of life.
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