Let us return to a very basic view of what society is. Clearly it has something to do with ensuring collective and individual welfare. The economy is a system for providing the services (see Chapters 4 and 7) which deliver that welfare. This begs the question of what welfare is. If we spurn the conventional economic assumption that consumption provides a proxy for welfare, then we have to face the difficult question of what exactly we do mean when we speak of it.
There are a number of possible perspectives on this. One of them is the monetarised index shown in Figure 31. But if we are rejecting the equation of wealth with welfare, we might also regard the monetarisation of welfare with some suspicion. We could supplant, or perhaps supplement, this kind of measure with certain development indicators to reflect different aspects of welfare. Such indicators could be provided, for instance, by measures of life expectancy, infant mortality, access to clean water supplies, literacy and so on. These are all useful ways of measuring our success or failure in delivering specific services. But we have still not answered the question of what we mean by welfare.
A constructive way of looking at the problem is through the satisfaction of needs. Human needs have been the subject of continuing investigation since the work of Abraham Maslow in the 1950s and 1960s. There is now an emerging consensus that human needs are both specific and identifiable.4 This same consensus also suggests that it is possible to characterise common, underlying needs which can be attributed universally to all human beings. This assumption is not essential for what I want to argue, but it is certainly useful in limiting the amount of ground we cover.
Using this characterisation, the provision of welfare can be represented as the process of satisfying our underlying human needs. Poverty, by contrast, is perceived as the failure to satisfy needs. One of the implications of this observation is that there are as many different kinds of poverty as there are different kinds of needs. This insight allows us a completely new perspective on the question of development. Under the conventional notion, development aims to eliminate financial poverty. Defining poverty in monetary terms also defines economic growth as the only solution. But if we accept the idea that there are many different kinds of poverty and that the aim of development is to provide for many different kinds of needs, then we are in a different position altogether. Economic growth can no longer be expected per se to eliminate poverty. Nor should we be surprised if economic growth has failed to provide unequivocally for human welfare.
More importantly, material consumption cannot be expected to alleviate poverty either. Nor should we be surprised if material consumption has failed to provide for human welfare. The reason is simple. As we shall see below, not all human needs are material ones.
In order to take these ideas any further, we clearly need to look in more detail at human needs. What are needs? What kinds of differences characterise different needs? How may these different needs be satisfied? What happens if they are not satisfied? Can we substitute the satisfaction of one need for the satisfaction of another? Before addressing these questions, let me just comment on the way in which orthodox economics handles the question of needs.
Conventionally speaking, economics translates all needs as 'wants' or consumer preferences and then makes the grand assumption that these preferences are expressed by the monetary values of goods and services traded in the market.5 This is a very powerful equation. It allows the economist to declare that the market economy is by definition satisfying human needs, because people buy and sell only what they want (i.e. need) to buy and sell. If welfare is defined in terms of the satisfaction of needs, then clearly the market economy is automatically providing for human welfare because human beings have expressed those needs (as preferences) through the market. Equally, economic growth then becomes the route to welfare precisely because the common currency of the market is a monetary one. The monetary economy allows consumers access to all the needs (equals wants) that are traded on the market—always provided they can afford to pay for them.
There are a number of reasons to dismiss this equation.6 First, it does not help us to understand why the market has failed to deliver either environmental quality or freedom from material poverty. Second, there are certain kinds of entities which are not traded, and probably not tradeable on the market, and it would be shortsighted to forgo the possibility that some of these entities are the object of human need. Here are some examples: peace, tranquillity, friendship, freedom, creativity, beauty, environmental quality. Next, the English language has provided us with a distinction between needs and wants and it seems ungracious to deny it. And finally, the elision is also likely to suppress our understanding, because there is clearly a distinction between needs and wants. A person may not want to eat; but as a biological organism he or she needs to eat. If that person does not eat, eventually they will die.7 Equally, a person may want to commit murder, but to suggest that that want is equivalent to a 'need' to commit murder is to destroy all pretence at moral or social imperatives.
Let us accept, then, that wants are not needs, in spite of the ferocious attempts of marketing agencies, advertisers, profiteers and racketeers to persuade us that they are. Let us take instead a more considered approach to the question of welfare, based on the idea that human
beings possess specific identifiable underlying needs. What are these underlying needs?
The best-known characterisation is due to Abraham Maslow, whose early work8 defined a hierarchy of needs stretching from basic physiological needs to what Maslow called moral needs at the top of the hierarchy (Figure 32). Maslow's idea was that the higher needs—which he characterised as human growth needs—remained latent until the lower needs—which he characterised as deficiency needs or maintenance needs—had been satisfied.9
The idea of a hierarchy of needs possesses a long historical pedigree. For instance, Plato declared in The Republic that 'the first and chief of our needs is the provision of food for the existence of life.. The second is housing and the third is raiment.' And there is a sense in which this hierarchical aspect follows common sense. If human beings do not have adequate nutrition, they die; and our success or failure in satisfying any other needs is then irrelevant.
But there are also troublesome aspects to this hierarchy, which have attracted a degree of criticism of Maslow's work. For example, the hierarchy has been interpreted as an argument for economic growth. Since higher needs are supposed to be latent until the deficiency needs
are met, personal growth appears to be dependent on reaching a sufficient level of personal wealth. This interpretation almost certainly runs counter to the spirit of Maslow's theory. In fact, in his later work he revised the strict hierarchy of Figure 32 to place growth needs and deficiency needs side by side.10 This dual hierarchy was designed to reflect what he saw as a duality in our human nature.
Later investigations also try to avoid the hierarchical interpretation. The particular characterisation I want to borrow here comes from a project on 'human-scale development' inspired by the Chilean economist Manfred Max Neef and co-ordinated by the Dag Hammarskjold Centre in Sweden and the Development Alternatives Centre (CEPAUR) in Chile.11 The project identified nine fundamental human needs. These nine needs are envisaged as occurring in four 'existential' categories: being, having, doing and interacting. The emerging matrix (Figure 33) of thirty-six distinguishable categories of fundamental needs is in stark contrast to the single, commensurate measure of utility which underlies classical economics.
There are clear parallels between this characterisation and the work of Maslow. For instance, the subsistence needs correspond to the basic physiological needs in Maslow's model. Security and protection are closely related. Many of Maslow's 'social needs' are mirrored in the Max Neef framework. Although some of the growth needs in Maslow's hierarchy appear to be absent in Figure 33, Max Neef has suggested a tenth need for transcendence which might bear many of these characteristics.
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