COMMENTARIES

There Must Be An Alternative

Barry Schwartz

Swarthmore College, Swarthmore, PA


About two decades ago, the citizens of Switzerland faced a momentous policy decision: where in the country should toxic waste sites should be located. There was to be a national referendum on the issue. The populace was well informed, and the issue really mattered. Two enterprising social scientists saw a golden opportunity (Frey and Oberholzer-Gee, 1997). They went from house to house in several regions of the country asking people whether they would be willing to have a toxic waste dump in their community. Strikingly, fully 50% of respondents said yes. The researchers followed up with those who said yes to ascertain whether people realized that a toxic waste dump might be dangerous, and that it might decrease the value of their property. The results were clear: people were not happy to host the dump, and they fully realized that there might be both health and economic consequences. Nonetheless, it had to go somewhere, and their community was as good a place as any. All citizens had civic responsibilities, and if their number was called, so be it.

At some houses, the researchers asked the question differently. They asked people whether, if the government paid them X Swiss francs a year (with X varied from one group of respondents to another), they would be willing to have a dump located in their community. At the highest value of X offered, an amount equal to six weeks worth of an average Swiss person's salary, about 25% said yes. Offers of more compensation changed the view of only one person.

Somehow, the offer of compensation made the prospect of a toxic waste dump less tolerable than it was when no compensation was offered. What could account for this strange, apparently irrational phenomenon? Consider: the people offered no compensation had only one reason to say yes--public duty. In contrast, the citizens offered compensation had the same public duty, plus money. Surely two reasons to say yes are stronger than one. To explain this peculiar result, Frey and Oberholzer-Gee (1997) suggested that sometimes motives that one might expect to be complementary might actually compete. For the uncompensated respondents, the question was, "what are my responsibilities as a citizen?" For the compensated respondents, there were two questions. The first questionas, "should I answer this as a citizen or as aelf-interested individual?" The offer of compensation provided the implicit answer that self-interest should govern the decision. Then they approached the second question: "how much is health and safety worth toe?" And their answer to that question was obviously "a lot more than they're willing to pay me."

For me, this simple study captures vividly what Kasser, Cohn, Kanner, and Ryan (2007) argue in their important paper. Corporate capitalism is not psychologically inert. It does not simply take people as they are and cater to their varied goals and desires. It promotes some goals and desires and minimizes others. It encourages values like materialism, individualism, and competition that compete with and crowd out other values that may better serve both societies and individuals. Indeed, Frey and Oberholzer-Gee even coined the term "motivational crowding out" to explain their result.

Just how significant a phenomenon is crowding out? As Frey and Oberholzer-Gee, and I think Kasser et al. understand it, crowding out, though significant, is a context dependent phenomenon. In a particular circumstance, self-interested, individualistic, materialistic values can "crowd out" civic virtue. But civic virtue, or social and moral concern, remains a part of human beings. Their expression is just suppressed. Said another way, fundamental characteristics of human nature are not being destroyed, or even altered. They are just not given full opportunity for expression. I do not want to minimize the significance of this phenomenon if it is true. If people are not given the opportunity to express important values and pursue important goals, there are likely to be profound psychological consequences.

That said I want to suggest a gloomier possibility. It is at least possible that when various non-capitalist values are suppressed, they eventually shrivel up and die. It is possible, in other words, that capitalism remakes people into different creatures--creatures who are suited to live in a world completely dominated by market institutions.

Ideology

If people's lives are being deformed in the way that Kasser et al. suggest, ask yourself why people put up with it, and even embrace it. Why do people support government policies that encourage individual economic entrepreneurship, and material consumption and neglect other values that contribute to well being? Why do people insist, despite massive evidence that above subsistence, additional material wealth makes a trivial contribution to well being (see Diener and Seligman, 004, for a review), that the only thing standing between them and perfect happiness is a few more dollars in their pay envelopes? A recent paper by Kahneman et al. (2006) suggests an answer to this question. People are committing what has come to be called the "focalism illusion," focusing on one determinant of well- being to the exclusion of all others. But why are they focusing on wealth, rather than say meaningful work or close, nurturing social relations?

The answer, I fear, is TINA: there is no alternative. The answer is twenty pages every day in the newspaper devoted to the health of financial institutions, and none devoted to the health of civic institutions. The answer is cabinet-level financial ministers but no cabinet-level well-being ministers. The answer is a measure of per capita GDP, but no measure of per capita GDW (gross domestic well being). Wherever we turn, the lesson we are taught is that what we do and should care about is ourselves, and more specifically, about our material selves. We are living in a monoculture.

This phenomenon is an example--the most important one--of what I have elsewhere called "ideology" (Schwartz, 1997, 2000; see also Miller, 1999). Usually, the word "ideology" is used to refer to a set of moral or political commitments--commitments that are not necessarily based in evidence or responsive to argument. This sense of ideology makes it relatively benign: ideologues may distort the facts, but ideology doesn't change them. And eventually the facts make themselves clear and ideology is defeated. In the end, the truth wins out. My sense of ideology makes it far more insidious. I suggest that ideology does change the facts, by changing the conditions in which people live, in effect forcing them to live in a way that is consistent with the ideology. An example of this fact-changing ideology that I have discussed elsewhere (Schwartz,chuldenfrei, and Lacey, 1978) is Adam Smith's idea that people don't want to work and will only do so if they must. This was probably false as a description of human nature when Smith wrote it, but it became ever more true as the workplace evolved into the spirit-deadening assembly lines of the industrial revolution. Smith said it himself (1998/1776):

The man whose life is spent in performing a few simple operations. . . has no occasion to exert his understanding,r to exercise his invention in finding out expedients for difficulties which never occur. He naturallyoses, therefore, the habit of such exertion and generally becomes as stupid and ignorant as it is possibleor a human being to become. (p. 429)

Critically, Smith's own ideas were a central influence in this workplace transformation. So he was wrong when he said it, but people believed it and then proceeded to remold work in a way that made Smith's pronouncements true. This kind of ideology leads to practices that alter human nature so that the facts conform to the theory. There is no reason to be sanguine that the truth will have its day when false ideas can play a causal role in transforming what the truth is.

To see another example of ideology in action, consider again the Frey and Oberholzer-Gee result. Though Frey and Oberholzer-Gee do not point this out, respondents who were asked whether they would accept a toxic waste dump for money were being asked a question that has become the gold standard when it comes to assessing the welfare effects of proposed public policies. Economists refer to it as "contingentaluation." Instead of administering attitude surveys, one asks people questions like how much they would pay to remove pollution from a nearby lake ("willingness to pay"), or how much they would have to be paid to allow a company to introduce pollution into the lake ("willingness to accept"). By aggregating responses to questions like these, one can get a quantitative estimate (denominated in dollars) of the welfare effects of different public policies. Then, of course, you implement the policy with the best welfare effects. Contingent valuation has become the gold standard because while attitudes are cheap, money is money. (As a side point, there is massive evidence that contingent valuation is fraught with difficulties so serious as to make it almost useless as a measure of what it claims to measure (see Gregory, et al., 1993; Diamond and Hausman, 1994; and Kahneman et al., 1999.) None of this evidence has stopped it from becoming the gold standard and remaining so.

So now imagine a world in which all potential public policies are assessed using contingent valuation. In this world, the only questions people are asked, are the ones involving trading some other good for money. In this world, as in the Frey and Oberholzer-Gee study, people will look completely self-interested. But because the contrasting question, not involving payment, will never be asked, researchers will never know that the picture they get of people as single-mindedly self-interested is the result of the question they do ask. They will never know, in short, that rather than capturing a piece of human nature, they are creating it. But then, having already conducted a distorted assessment of human motivation, they will compound the problem by offering penalties or incentives that turn people into just the self-interested, materialistic creatures they were assumed to be in the first place.

Suppress or Destroy

The issue I am raising is whether the crowding out effects of corporate capitalism merely suppress or actually destroy the human values and aspirations that capitalism has no use for. I don't think the answer to this question is known, but my suspicion is that destruction is certainly possible. Human beings are remarkably good at adapting to the contexts within which they live. Yes, a generation raised in the context of close social ties and civic engagement will miss these nurturing aspects of life as capitalism corrodes them. But they will adapt. And the next generation, born into an environment that is thoroughly individualistic and materialistic, will simply regard it as natural.

And there is more going on than mere adaptation. Because capitalism is corrosive, it is likely that non-materialistic and non-individualistic aspects of life will become less good--less easy to realize and less satisfying--as their contact with market institutions continues. Because of this, people will feel like they are losing less, and thus be relatively uninterested in challenging capitalism's monolithic stature. I have suggested this possibility in two books (Schwartz, 1986, 1994), and an example that captures it well is Hochschild's (1983) brilliant discussion of the "commercialization of feeling." As Hochschild points out, as more and more Americans earn their livelihoods in service industries, the product they have to sell is themselves. As they compete with one another for customers, the premium goes to the ones who can be most "sincere" in catering to the desires and interests of customers. But once deep emotions become instrumentalized in this way, people face the real possibility that they will no longer be able to distinguish the genuine from the fake--both in others and in themselves (as one successful disk jockey purportedly said years ago, "the secret to success in this business is sincerity. If you can fake that, you've got it made." With only ersatz emotional connection available from others, why wouldn't one just plow straight ahead into a world of individualist, material consumption? There isn't much to be lost. If you make the "goods" that are incompatible with capitalism less good, individualistic materialism becomes the only game in town. There Is No Alternative.

Other subtle effects push in the same direction. Consider the explosion of choice that modern modes of production and the ubiquitous marketplace have made possible. Fifty years of research have made it abundantly clear that choice is good for human well-being. It is extremely important for people to be the authors of their own lives. But in the last few years, evidence has begun to accumulate that there can be too much of a good thing--that choice overload can paralyze people into indecision, heighten regret, and decrease satisfaction with even good decisions (Schwartz, 2004). Kasser et al. discuss these recent research developments, but in distinguishing between "micro-options" and "macro-options," they suggest that this explosion of choice is not such a big deal. Yes, we have 200 kinds of cereal to choose from, but we can't choose to live outside the law of the market. So superficial choices increase, but meaningful choices decrease. There is real value to this observation, but I think Kasser et al. underestimate the potential deep effects of the explosion of what they call micro-choice. Consider this: when jeans only come in two or three styles, not only is it true that choosing is rather easy, but it is also true that jeans are just jeans. That is, the jeans you wear don't tell the world much about who you are. There just isn't enough diversity of product to cater to the diversity of human personalities. But when there are several hundred possibilities in the world of jeans, it becomes possible to use what you wear to send a message about who you are. In other words, the diversity of products in every imaginable consumer domain encourages people to adopt the view that "you are what you own," rather than, say, a view that "you are what you do." Of course, nothing could make the marketplace happier. And once this kind of deep personal transformation occurs, the availability of diverse products in the market becomes essential to well being--more essential, perhaps, than a job that enables you to engage in creative work that improves the world. And again, once this kind of transformation occurs, people won't feel like they are missing any of the human possibilities that corporate capitalism is crowding out.

It is because of possibilities like these--the commercialization of feeling and the transformation of the self from a "doer" to an "owner"--that I worry that rather than being defeated or even modulated by the facts, corporate capitalism will change what the facts are.

What Can Be Done

What is, to me, the single most striking observation in Kasser et al.'s article comes at the very beginning. Nobody studies the effects of corporate capitalism. It sits like an 800-pound gorilla in the center of the room, and psychologists study the flies and mosquitoes in the corners. There isn't much chance that individual citizens, to say nothing of policy makers, will take the potentially devastating psychological effects of capitalism seriously, unless there is a robust literature that documents these effects. The Kasser et al. paper is an important step in this direction, as is the powerful argument by Diener and Seligman (2004) that something like a "national well being" account should supplement (if not completely replace) GDP as a measure of a nation's health. But we better hurry; especially if I'm correct that capitalism destroys values rather than merely suppressing them. Before too long, people who have been made in the image of capitalism may be so unidimensional that GDP is all that is needed to do the job.

And it won't be easy to turn the ocean liner around. There are obvious reasons for this that do not need stating. But there is also a subtle reason, discussed by Kasser et al., the full significance of which is rarely appreciated. The current law of corporations makes it extremely difficult for even the most enlightened CEOs to adopt policies that promote the well being of employees, especially if the corporations are publicly held. The leaders of corporations have a fiduciary responsibility to the owners--the shareholders--to maximize profit and increase the value of shares. Those who fail to do so will certainly be fired, and may even incur legal liability. While it would be nice to believe that any practice that makes for more satisfied workers also contributes to the company bottom line, this is probably a fairy tale. It is certainly much too hard a standard to meet. The legal structure of the capitalist economy must be changed to allow room for enlightened leaders to improve the lives of employees, even if it costs the corporation money. Without a change like this, people who want to do the right thing won't be around long enough to see their visions realized.

Conclusion

People are adaptable. Aside from some transition costs, they will get used to living in a world in which competitive, materialist, individualism is the only game in town. They will probably even learn how to thrive in such an environment. They will report high life satisfaction. So why worry? Why wring your hands?

Here's why. Even though people are adaptable, there are some living conditions to which people should not be asked to adapt. And the single-mindedness of corporate capitalism is one of them. Suppose we were to cut off everyone's right arm. In the short run, this would create great misery. But people would adapt. And the manufactured world would be re-engineered to make it possible for people to live their lives successfully with one arm. And the next generation of one-armed people, born into this newly created world, would never know there was anything missing--that once, more was possible in life. Our task, I believe, is to help prevent corporate capitalism from cutting off people's right arms. And we have to do it before people reach a point where the capitalist way of life seems natural--indeed, seems to be the only possible way of life. We know now that "There Is No Alternative" is false. But I wouldn't take it for granted that our grandchildren will know this too.


References

Diener, E., & Seligman, M. E. P. (2004). Beyond money: Toward an economy of well-being. Psychological Science in the Public Interest, 5, 1-31.

Diamond, P. A., & Hausman, J. A. (1994). Contingent valuation:s some number better than no number? Journal of Economicerspectives, 8, 45-64.rey, B. S., & Oberholzer-Gee, F. (1997). The cost of price incentives:n empirical analysis of motivation crowding out. American Economic Review, 87, 746-755.

Gregory, R., Lichtenstein, S., & Slovic, P. (1993). Valuing environmentalesources: A constructive approach. Journal of Risk andncertainty, 7, 177-197.

Hochschild, A. (1983). The managed heart: Commercialization of Human feeling. Berkeley: University of California Press.

Kahneman, D., Krueger, A. B., Schkade, D., Schwarz, N., & Stone,. A. (2006). Would you be happier if you were richer? A focusing illusion. Science, 312, 1908-1910.

Kahneman, D., Ritov, I., & Schkade, D. (1999). Economic preferences or attitude expressions? An analysis of dollar responses to public issues. Journal of Risk and Uncertainty, 19, 203-235.

Kasser, T., Cohn, S., Kanner, A. D., & Ryan, R. M. (2007). Some costs of American corporate capitalism: A psychological exploration of value and goal conflicts. Psychological Inquiry,8, 1-22.

Miller, D. (1999). The norm of self-interest. American Psychologist,4, 1053-1060.

Schwartz, B. (1986). The battle for human nature: Science, morality and modern life. New York, Norton.

Schwartz, B. (1994). The costs of living: How market freedom erodes the best things in life. New York: Norton. (Reprinted by Xlibris,000).

Schwartz, B. (1997). Psychology, "idea technology," and ideology.

Psychological Science, 8, 21-27.

Schwartz, B. (2000). Self-determination: The tyranny of freedom. American Psychologist, 55, 79-88.

Schwartz, B. (2004). The paradox of choice: Why more is less. Nework: Ecco.

Schwartz, B., Schuldenfrei, R., & Lacey, H. (1978). Operant psychology as factory psychology. Behaviorism, 6, 229-54.

Smith, A. (1776/1998). The wealth of nations. Oxford: Oxford University Press.