Why we want it all

One of the world's greatest economists reflects on the west's fundamental shift from survival to self-actualization.

It might be the third-largest in population terms, but Chicago is undoubtedly America's second city. Largely destroyed by fire in 1871, it was reborn as the country's most architecturally stunning city. It also houses some of America's finest art collections, is home to the historic baseball ground Wrigley Field, and can even claim credit for inventing the deep-dish pizza.

Yet there's one tourist attraction that is fiendishly difficult to visit without planning months in advance. Tickets are scarce, demand huge, and those who manage to get in speak of it in reverential terms. It's The Oprah Winfrey Show. It's difficult today to recall just how revolutionary the 20-year-old talk show was when it began exploring issues never addressed on broadcast television: domestic violence, pedophilia, infidelity. Yet the overriding focus of this program - hosted by a woman born in Mississippi to poor unmarried teenage parents who is now worth an estimated $US1.3 billion - is the meaning of life: it urges viewers to looking within, to question and examine their existence.

Robert Fogel doesn't look like a typical Oprah viewer. The white-haired 79-year-old enters the University of Chicago's Graduate School of Business leaning on a walking stick, ushering visitors into an office heavy with stacked papers, books and the kind of clutter academics seem obliged to accumulate. He speaks slowly and deliberately, thoughts punctuated by long pauses that tempt listeners to complete his sentences. But that would be rash: Fogel answers carefully because his words carry decades of experience, not to mention the 1993 Nobel Prize in economics. And this devoted Chicago Bears gridiron fan, amateur cabinet maker, and Charles R. Walgreen Distinguished Professor of American Institutions happens to be an expert on what might be called "the Oprah Winfrey phenomenon": the Western world's increasing preoccupation with just why we are here and how we should live our lives.

"She's done a terrific job," he says, leaning back and smiling. "And her own story is an incredible success story. This is a woman who really self-educated herself and has become a powerful intellectual influence on the whole country, and probably abroad too."

Even 50 years ago, existential musings about the meaning of life were of little concern to the vast majority of people. Simply surviving was hard enough. However, a variety of factors have pushed people in modern, industrialized economies to historically unprecedented affluence.

Fogel calls humankind's advances in the past 300 years "technophysio evolution", laying out its development and implications in his latest book, The Escape from Hunger and Premature Death, 1700-2100: Europe, America and the Third World (Cambridge University Press, 2004).

In pre-industrial Britain and Europe, spending on food alone constituted up to 75 per cent of all expenditures of laboring families. Add shelter and clothing and there was nothing left to spend on extras. Up until 1820, just 5 per cent of the American population lived in urban areas as crop yields were simply not able to support both those on and off the land.

Fogel says it took four people working on the land to support one person off the land, but America quickly began to increase the availability of food and that, in turn, had some dramatic effects. Fogel describes technophysio evolution in the 20th century as "remarkable": the increase in average global life expectancy during the past 100 years has been twice that of the previous 200,000 years, more than quadrupling the planet's population between 1900 and 1990; homelessness rates have dropped from somewhere between 10 and 20 per cent of the population in the United States in the mid-19th century to 0.4 per cent today; average heights continue to increase (the average height for males in Holland, for example, has increased by 20 centimetres in just four generations); and the average number of chronic diseases per American male aged 65 to 69 dropped from 6.2 in 1900 to 1.9 by 1996.

So what does this all mean? It means that, on average, people in western nations are living longer and with fewer health problems. They are more physically robust throughout their lives, making them more productive and fueling unprecedented affluence across all levels of society. Even if you wanted to try to understand what life was like two centuries ago, there are precious few ways you could - at least, there are few ways to understand it if you happen to live in an industrialized nation.

"There are still spots in the mountain areas of the [United] States where people ... take great pride in being able to live off the land," Fogel says. "But you know, if you're a hunting and gathering society, even in lush areas it takes about five square miles of wild products to support one person. It's only when you figure out how to produce relatively densely by going from hunting and gathering to agriculture that you get a very dense population. And agriculture didn't become efficient enough to let the majority of people be exempt from agricultural production until well into the 19th century.

"Urbanization is really a 20th century phenomenon and if you look at it on a global scale you'd say it's the second half of the 20th century. Only about a third of the world was urbanized in 1950. You're now up to about 45 per cent urbanized and the UN [United Nations] projections are that in about 15 years or so 60 per cent of the world's population will be urbanized. So on a global scale - as opposed to the Organisation for Economic Co-operation and Development countries, which are now about 80 per cent urbanized - the rest of the world is sitting much lower but is changing rapidly."

For people in America, Australia and Europe, technophysio evolution has dramatically altered the way we spend our time and money, in turn dramatically altering the focus of our lives.

An example. When Hurricane Katrina swept over New Orleans in September, the deluge caused levees to burst and the city to flood. The immediate focus became survival. Residents waded through chest-deep water, their belongings floating in garbage bags. Others camped on roofs without food or water, holding signs aloft seeking help from the tens of television helicopters. Local stores were looted, both by thieves and people simply seeking the means to survive. When the federal government provided $US2000 debit cards to help people get back on their feet, the displaced were concerned with finding shelter, buying clothes and getting something to eat.

Yet one person's necessity of life is not another's. Within days, flood relief debit cards had been used at Atlanta's Louis Vuitton store to buy $US800 handbags. Sony PlayStation Portable computer game devices were bought at a nearby mall. Television sets and DVD players were being snapped up, forcing some retailers to throw up their hands in exasperation.

"This is totally and morally wrong," an Illinois retailer, Vicki Haniford, told the New York Daily News. "Many hard-working Americans donated money to the disaster victims so they could have food and clothing, not buy outrageous items."

Yet what constitutes an outrageous item? What if, despite losing your house, you retain a job, savings, or some other means of funding those basics of life: food, shelter and clothing? The fact is that people living in developed nations today spend less and less of their income on pure survival. Fogel says spending on life's essentials today comprises less than a third of American incomes compared with more than 80 per cent two centuries ago.

"The average poor person - poor not by our standards but by early 20th century standards - a person who's at the poverty line, someone who's in the 15th percentile from the bottom, has more real income than people who were in the top 10 per cent of the income distribution in 1900," he says.

"And there are some things you couldn't get [in 1900] at any price. JP Morgan couldn't get a heart bypass operation if he offered his whole fortune for it. But people on Medicaid ... can get those operations paid by the government. If you take leisure time activities, the main advances have been in the forms that poor people use. Rich people can still go to the opera. They can still go to Broadway plays. They can go to live symphonies. But now even poor people can watch those things on TV or listen to them on the radio or on their MP3 players."

Everywhere Fogel looks, he sees evidence of the ways in which our increasing leisure time manifests itself. While some people choose to spend extra hours camped in front of the television set, many others are using it to ponder the nature of life itself. Changes to the way our days are structured have resulted, Fogel says, in humankind being more self-realized than ever.

How old were you when someone first mentioned needing "closure" to an emotional event? Or when a friend - or you - began seeing a therapist? When did you notice yoga, pilates and meditation had become trendy? Do you wonder at America's broad swing towards religiosity in recent years, or the sudden broad popularity of Buddhism and explosive growth of obscure faiths such as Kabbalah? Just how did The Oprah Winfrey Show become popular?

"Today, ordinary people have time to enjoy those amenities of life that only the rich could afford in abundance a century ago," Fogel writes in The Escape from Premature Hunger and Death. "Today, people are increasingly concerned with the meaning of their lives. A half century from now, perhaps even sooner, when increases in productivity make it possible to provide goods in abundance with half the labor required today, the issue of life's meaning and other matters of self-realization may take up the bulk of discretionary time."

Born in 1926, Fogel can still remember his mother spending hours repeatedly boiling spinach to make it clean enough to eat. He talks about Herbert Hoover running for President amid promises that every American would have a car in the garage and a chicken in the pot - suggestions regarded as outlandish. Yet today, even Americans defined as "poor" by the Census Bureau live in conditions that would once have been regarded as comfortable: 46 per cent of poor households own their home, 76 per cent have air-conditioning. Almost 78 per cent have a VCR or DVD player, 62 per cent have pay television. Almost three-quarters own their own car, while 30 per cent own two or more.

"When we were deprived of all of these things, we thought if only we had radios and irons and washing machines and dishwashers, life would be perfect," Fogel says. "Now that we have that, we're saying, 'Wait a minute - what's life all about? What am I doing all of this stuff for?' We're much more focused on what I call these immaterial aspects of life and that explains the upsurge in religiousness in the United States. I don't know what the status is of the religious movement in Australia, but you've also had a huge upsurge all over Latin America and Africa and Asia. The only place that has been relatively untouched is western Europe, including England, which remains very secular."

These changes also have important implications for companies. Fogel sees a time when work is a means to an end and society's general affluence means more importance will be placed on how time is structured. That means even greater flexibility will be required from corporations that have struggled over the past two decades to adapt to employees demanding flexible hours, the ability to work from home, more part-time opportunities, and increased sensitivity to personal demands.

"[Businesses] have to adjust to the fact that control over people's time may be as important as their wages," Fogel says. "If you look at the surveys and ask the question, 'Is money or time your most severe shortage?', you're going to get more people who say time than money. That doesn't mean there isn't a significant group that are pressed financially, even in rich countries. But most people feel well enough off so that they complain more about how busy they are than about how little income they have."

At the same time, society is going to have to deal with even greater strain on the health care system. Indeed, Fogel views health care as the great growth industry of the 21st century, especially if life expectancy continues to rise. In fact, even as chronic disease rates have dropped precipitously in recent decades, the amount spent on health care - particularly in the United States - continues to rise exponentially. Fogel is largely unconcerned, viewing spending on health care as a choice Americans make given their increased wealth.

"Well, what are we going to spend [money] on?" he says. "If you measure it in hours, 160 hours of labor per year will buy all the food that the typical household needs. If you put food and clothing into the mix, you're into about 320 hours but we're working about 1700 hours. So the rest of what we're working for is to buy services, including a lot of leisure services, but also including health care and education."

That includes exploring the meaning of life.

"I think the increase in life expectancy in the 21st century will be as big as during the 20th century, which means that life expectancy in 2100 will be close to 100 years," Fogel says. "[You will] spend nearly 25 years of your life getting educated, you'll work for 30 years, and then you'll have another 40 to 45 years to explore the world on your own. I don't mean to say that people might not do some work that produces income. But they'll really be doing work they want and income will be nice if it comes with it, but it's not the driving element in what they do."

Published by AFR BOSS, November 11, 2005.