Sanctioned Wants

Consumption desires that do not significantly increase health when they are satisfied are called wants, and the associated outputs require social judgment to establish their appropriate production levels.

This topic is explored here with due reference to environmental limits.

At the outset there is an important point to make regarding social judgment. This arises in two distinct contexts with respect to ENL.

A society must balance the framework’s economic conclusions against non-economic considerations such as esthetics, social solidarity, fairness, and spirituality. These judgments are beyond ENL’s conceptual boundaries, and a society can therefore apply whatever principles it deems to be suitable.

The production of outputs that satisfy wants is quite different. Here society is making judgments within ENL’s conceptual boundaries, in that the framework needs social assistance in drawing economic conclusions.

A society’s freedom of choice is therefore constrained: on the assumption that ENL has been chosen for economic guidance, it can apply its own principles only insofar as these are consistent with those of ENL.

Contradictory principles would destroy the framework’s conceptual integrity and undermine the guidance it provides. This applies with particular force to ecological limits.

Let us now examine the criteria that ENL applies in order to separate wants into the sanctioned and unsanctioned categories. Concretely, wants pertain to outputs like movies and concerts, which play a major role in the economies of the rich countries.

Much more significant on the global stage, however, are poor families that have only modest quantities of basic items like soap, clothing, and shoes. In such cases higher quantities, while not necessarily improving health, could lead to substantial improvements in comfort and dignity.

The distinguishing feature of a want-satisfying output is that both its potential value and its effectual value are essentially zero.

This gives us two cases to investigate: where input cost is negligible and can therefore be set to zero as well, and where input cost is non-negligible, requiring us to treat is as non-zero.

The latter case is discussed first. See the following figure.

Non-zero input cost
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When potential value and effectual value are essentially zero, but input cost is non-zero, optimum output quantity can be determined through input cost alone. "EV" indicates effectual value.

This situation may look unusual on a graph, but it poses no new challenges. When input cost is a factor, an effectual value of zero is treated exactly the same way as an effectual value that is positive or negative.

In this figure the effectual value (EV) curve is congruent with the horizontal axis, which is the zero level for marginal health.

The input cost curve cuts the horizontal axis at Q*. This is the point where health is maximized, and thus identifies the optimum output quantity.

The ecological limit marks the absolute maximum quantity, which is subject to change only if ecological efficiencies rise or fall.

To illustrate, we can consider a small, self-contained economy and apply this idea to the number of concerts that should be performed over a year.

Assume that input cost is negative for the first 10 concerts because, at this low level of activity, there are positive health effects from labor and no significant environmental impacts.

At Q* these gains have been maximized.

However, input cost is positive for concerts above this number. Labor cost increases as instruments and equipment are moved around more frequently, and natural cost rises as pollution from the transportation of performers and audience members takes its toll on public health.

If more than 10 concerts are performed, losses will start to accrue, and net losses could result if the number of concerts goes beyond about 20. Based on the principles enunciated so far, the annual “production” of concerts should stop at 10.

But let’s assume that people have immense fun at these concerts, and that there is strong social pressure to increase their number — that is, to sanction this want. From the figure it is clear that losses would occur, and that net gains would therefore decline.

In effect, society would be sacrificing the health of concert workers (labor cost) and the public (natural cost) for the fun of concert attendees. Because this contravenes ENL’s ethical stance — everyone is of equal worth — this want should not be sanctioned.

Looking only at labor cost for simplicity, there are at least two ways to escape from this conclusion.

First, it might be possible to compensate the workers for the health loss they incur in production by increasing the health gain they derive from consumption. In other words, they could be paid more. Whether or not this is feasible must be evaluated for each individual case, but the possibility should be explored.

The other option is to increase the number of workers. Because the labor cost curve slopes upward, total labor cost declines as the worker participation rate rises for a given amount of work.

Although it is clearly impractical to have a horde of workers travel with a band, it is possible for the able-bodied members of an audience to show up a few hours early and help the roadies set up. In today’s business environment this is difficult because of union rules and insurance requirements, but as our economic perspective changes, such restrictions could be eased.

The other case to be considered — where input cost is essentially zero — is depicted in the following figure.

Non-zero input cost
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Up to quantity Q* the production of this output is justified on the basis of need satisfaction. From Q* to the ecological limit, society must decide if the want should be sanctioned. Beyond the ecological limit the want cannot be sanctioned based on ENL principles because its satisfaction could harm future humankind. "EV" and "IC" indicate effectual value and input cost respectively.

Assume that the output being analyzed here is shoes. The initial quantity consumed will have definite health benefits by preventing cuts and diseases, keeping feet warm, etc. This is shown by the positive and constant portion of the effectual value curve.

When all consumers have obtained these benefits, the health effect will quickly decline. However, unlike ingested outputs like food, drinks, and drugs, the consumption of shoes cannot cause effectual value to become negative.

The curve thus declines to zero (the horizontal axis) and remains there. Because input cost is by assumption negligible, it is also congruent with the horizontal axis.

In this situation, consumption is objectively justified until quantity Q*. Up to this point, effectual value is greater than input cost and quantity is less than the ecological limit. The shoes thus represent a need that can be sustainably satisfied.

For quantities greater than Q* we are dealing with a want that is subject to social decisions. In the range from Q* to the ecological limit, society may decide to approve further shoe production based on its chosen criteria. In other words, it may decide that additional shoes satisfy wants that should be sanctioned.

However, society cannot sanction the production of quantities beyond the ecological limit. Doing so could mean sacrificing the needs of future humankind for the wants of present humankind, thus contravening ENL’s ethical foundation. The only way to escape from this conclusion is to abandon ENL's economic guidance.

A highly significant point here is that sanctioned wants are possible only when an output's ecological limit is higher than its optimum quantity. Stated differently, sanctioned wants can arise only if an output's target quantity is its optimum quantity.

If the target quantity is instead the ecological limit, the range for sanctioned wants has disappeared. You can see this in the graph by mentally moving the ecological limit to the left and noting that the range for satisfying these wants is squeezed out.

This underscores the importance of applying human ingenuity so as to increase ecological efficiencies to their maximum feasible levels. Doing so creates valuable "ecological space" for social decisions about the satisfaction of deeply-felt wants.

Aside from ecological reasons, a society may decide not to sanction a want because it does not consider the consumption desire to be genuine. That is, it may determine that the want has been implanted by residual manipulation or peer pressure, and does not constitute an autonomous human desire.

Society may also judge that a want-satisfying output has undesirable social consequences: undue violence, invidious distinctions, etc. As well, society may determine that, while the output would satisfy a genuine want, other outputs have greater priority, and its satisfaction should therefore be deferred.

The decisions referred to in this section could be imposed by government, as would presently be the case in Cuba, or they could be made collectively by members of a small economic community.1

They could also be made indirectly through social attitudes and pressures. Just as smoking is becoming socially unacceptable in many areas, it may soon become disreputable to own shoes, clothes, houses, etc. beyond health requirements and the credible claims of life enrichment.

Once capitalist logic has significantly subsided we might even see ads on television promoting moderation and thrift rather than fast cars and exotic vacations. Such ads would constitute social decisions about want satisfaction just as much as stern edicts from a central authority.

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