How Much is Enough?: Money and the Good Life

• Introduction
• Remarks
• Questions and Answers

Introduction

JOANNE MYERS: Good afternoon. I'm Joanne Myers, director of Public Affairs Programs, and on behalf of the Carnegie Council I'd like to thank you all for joining us.

Today I have the privilege of introducing, not one, but two distinguished academics who share the same last name. It is a name that resonates with admiration and respect, Lord Skidelsky and his son Edward. Lord Skidelsky is professor emeritus of political economy at the University of Warwick and is the celebrated author of the widely acclaimed, prize-winning, three-volume biography of the economist John Maynard Keynes.

Edward is a lecturer in philosophy at the University of Exeter, specializing in aesthetics and moral philosophy. He is the author of Ernst Cassirer: The Last Philosopher of Culture.

Together they have written a very intriguing book, entitledHow Much Is Enough?: Money and the Good Life, in which they ask us to reflect on issues that since ancient times have preoccupied all mankind. The question of how best to live one's life was at the very center of ethical debate then, and it is a topic that continues to haunt us to this day.

Now I know there must be at least a few among you who have wistfully thought, "If only I had more—more money, more success, more gadgets, just a great deal more." But what happens if we have that much more? Research suggests that even if we could have it all, the percentages of those who seem to have more who claim to be happy have steadily declined.

In How Much Is Enough?, Lord Robert Skidelsky and Edward write that "the Western world has become unhealthily preoccupied with the pursuit of wealth and wanting more." Their thesis is an argument against insatiability, that psychological disposition which prevents us as individuals from saying, "Enough is enough."

They argue that the incessant quest for higher incomes, faster growth, is robbing us of the good life rather than helping us to attain it. They challenge us by raising seldom-asked questions, such as: What is the true value of money? Why do we work such long hours merely to acquire greater wealth? What constitutes the good life? And, in the end, what adjustments in our moral and economic system would be needed to realize change?

In answering these pivotal questions, they reanimated philosophical and ethical ideas, drawing on economists, such as Keynes, and philosophers, such as Aristotle, in the conviction that the two disciplines need each other, the one for the sake of its practical influence, the other for the sake of its ethical imagination.

Today, with growing dissatisfaction of an economic system heavily geared to the accumulation of wealth and distorting our values, perhaps we are more willing and more inclined to rethink the role of markets so that we can pursue a more meaningful life.

To nourish these thoughts, please join me in welcoming our much-anticipated guests, Lord Robert Skidelsky and his son Edward.

Thank you for joining us.

Remarks

LORD ROBERT SKIDELSKY: My son Edward and I decided to write a book called How Much Is Enough? in order to focus attention on the question: What is money and wealth for? Why do we as individuals and societies go on wanting more and more of it?

Well, the springboard for our inquiry was a little-known essay by John Maynard Keynes, the great economist, called "Economic Possibilities for Our Grandchildren." It came out in 1930, just when the Western world was sliding into the greatest depression of modern times. Keynes, of course, made his name as the great anti-depression economist, and his name is associated with remedies for slumps.

But in this essay, "Economic Possibilities for Our Grandchildren," he strikes a different note. He said: "Look a little further ahead. We are suffering not just from the unemployment caused by economic breakdown, but from the unemployment caused by progress"—what he called "technological unemployment"—"arising from the displacement of labour by machines." We now call it automation.

This, he said, was a cause for optimism, not pessimism, because it meant we were solving the economic problem which had dominated human history. Technology was simultaneously lifting more and more people out of poverty and relieving them from the drudgery of toil. So that was the optimistic vista.

Building on this thought, he ventured a remarkable prediction. In 100 years' time, he said, Western societies would be producing four or five times as much wealth per head as they were then and needing to work only 15 hours a week to produce it; that is, three hours a day. The lives of Keynes's grandchildren, in other words, would be dominated not by the problem of having to earn their living, but of using the freedom which science and technology had won for them to live (and I quote) "wisely, agreeably, and well."

Well, what has happened to Keynes's prophecy? He turned out to be only half right. We in the developed world have reached, more or less, the standard of living that he forecast in 1930, but our average hours of work are far from 15 a week. They have fallen a bit, from about 50 hours, which was average then, to about 40 hours, which is standard today. And of course we take longer holidays than we did then. So perhaps the fall is even greater than given by the recorded hours of work.

And then there are other things. In some countries, hours of work have fallen more than in others. The Americans, it won't surprise you, work hardest of all, more hours than any other Western country. And in a strange reversal of previous patterns, the rich now work harder than the poor. That was contrary to all previous expectation. People use to talk about the "idle rich." That phrase is no longer in use. It's the workaholic rich that now dominate us.

The general picture is clear. It is still work and not leisure that defines our civilization.

Why is this so? We considered a number of possible explanations.

One is that work has become so pleasant that people can't bear to give it up. People discover their souls in their jobs. Well, this is true of some, but I don't think of most. I doubt if people discover their souls on the assembly line, or even on digitalized versions of the assembly line.

A second explanation is fear of idleness. "What would I do if I didn't have to work?" people say. Well, if this fear is as widespread as it is alleged to be, it would be hard to explain why workers have always campaigned for shorter hours.

I think the love of work and the fear of idleness are explanations which are much favored by the class in charge of things rather than the rest.

We come closer to an understanding of the riddle of work if we consider the pressures on people to work. These have increased in recent years. Interestingly, hours of work stopped falling in the 1980s, at the same time as inequality started rising. Average incomes tell us that our societies are four or five times richer than they were in Keynes's day, but in fact most people earn less than the mean.

The average incomes give a very misleading account of the actual distribution of income in the society today. Most people haven't yet attained that state of plenty which might induce them to work less. In other words, the rich have taken the giant's share of the productivity gains of the last 30 years.

Economic insecurity has added to this pressure to work. Just today I read in The New York Times that the recent recession has reduced median families' net worth from $126,000 to $77,000, roughly what it was in the early 1990s.

Put simply, in a period when life expectancy continues to increase, most people's capacity to finance their retirement has been falling. Cutting down on hours of work is simply not an option for them.

But we need to dig even deeper into human nature itself. Keynes assumed that people had a fixed quantity of material wants, which one day might be fully satisfied, leaving them free for higher things. We know better. Beyond a certain point, wants are relative, not absolute. We want things either because others have them or, if we are snobs, because others don't have them. We are always trying to keep up with or get ahead of or impress others.

Such wants, the relative wants, are infinitely expandable. There is no natural terminus. It's not that you can eat enough and then you're full—in fact, a lot of people don't seem to follow that rule either. But basically, these relative wants can be expanded without limit. There is no natural terminus.

One contemporary of Keynes who understood the social character of insatiability was Thorsten Veblen. Veblen called conspicuous consumption "that consumption favored by the newly rich which serves to advertise the fact that they are rich."

But the relational character of consumption runs from top to bottom of society. In fact, it exists in any society because man and woman are social animals. However, capitalist civilization undoubtedly inflames economic insatiability by channeling our hopes and dreams so exclusively into the acquisition of consumer goods. Insatiability is universal, but our civilization is the first to release economic insatiability from its previous moral and customary restraints—in fact, to make it a measure of progress.

Intelligent defenders of capitalism always recognize that it's a system with moral flaws, but they have regarded such flaws as the price of progress. Keynes was typical in this respect. In that essay, "Economic Possibilities for our Grandchildren," he writes: "For at least another hundred years we must pretend to ourselves and to everyone else that fair is foul and foul is fair"—he knew his Shakespeare—"for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer, for only they can lead us out of the tunnel of economic necessity into the sunlight." How innocent those words sound today.

Capitalism, it is now clear, has no tendency to evolve into something else. I'm not saying something higher, but just to evolve into some other system, a system fit for abundance. It has no tendency to do that. Left to itself, the machinery of one generation will carry on churning endlessly and pointlessly, pointlessly because it never asks the question, "What is this for, what's it all about?" To bring it to a standstill requires an act of collective imagination and will.

But what do we mean by "enough"? That's the question with which the book started, "How Much Is Enough?"

I now give way to Edward to tell you exactly what we do.

EDWARD SKIDELSKY: Thank you, Robert.

The central message of our book, just to anticipate, is that "enough" means enough for a good life. But before I try to persuade you of this, I want to talk briefly about another couple of influential attempts to give substance to the idea of "enoughness."

The first appeals to the concept of happiness, the second to the concept of sustainability. We sympathize deeply with the goals of both these movements. But we believe that they mislocate the real basis of our objection to endless growth, which is not utilitarian but ethical.

Happiness economics, a movement with which I'm sure you are familiar—I believe Derek Bok gave a talk in this very room not long ago—takes off from the observation that we in the developing world, although we're pretty happy, don't seem to be getting any happier, even though we are getting richer the whole time on average.

So the conclusion seems obvious: It is time to switch our attention from GDP to GDH, gross domestic happiness. This has become a very influential movement in policy circles in recent years. Many countries now have happiness indexes.

Now, we are in deep sympathy with the negative goal of happiness economics—i.e., to get us off the growth treadmill—but we find its positive vision somewhat dispiriting. Do we really want to make happiness in and of itself the supreme goal of government? Doesn't it also matter what people are happy about?

Just to give you a thought experiment, think of the student who, thanks to a double dose of Prozac, is serenely indifferent to his impending failure in exams—in a fool's paradise, as people say. I mean might it not be better for this student not to be happy, for at least then he'd be in touch with the reality of his situation?

So in other words, it seems that happiness is not good, in and of itself, but insofar as its due, insofar as we have reason to be happy. To make happiness, in and of itself, independent of its objects, the supreme goal of government is to open the door to Brave New World. So we don't want to get rid of the engineers of growth only to see them replaced with the engineers of bliss.

Another very influential anti-growth argument focuses on the finitude of our natural resources. Endless growth is an ecological impossibility. Sooner or later we'll exhaust the world's supply of oil, gas, coal, uranium, or its ability to absorb their waste products.

Climate change scientists warn of the impending destruction of the planet unless we take drastic measures to restrict growth.

Now, of course, in abstract terms it is impossible for us to carry on growing without end. The world is a sphere and it's going to be pretty hard for us to leave it. The trouble is we don't know when the day of reckoning is going to come. With a bit of technological wizardry, we may succeed in postponing it for some time yet. Basing an ethical imperative upon a factual hypothesis is always a risky strategy, because if that factual hypothesis turns out to be false, the ethical imperative rings hollow.

So why not just admit what we already implicitly know? The real problem with endless growth is not pragmatic but ethical. It's that in a world in which we have enough, collectively, to carry on striving for more is crazy.

So I return to the central claim of the book: "Enough" means enough for the good life.

But of course this just begs the question: What is a good life? Is there any such thing at all?

Skeptics point to the vast diversity of moral beliefs and practices. "How, in the face of this diversity," they say, "can you talk about such a thing as the good life? Surely such talk is just chauvinism or cultural imperialism, the attempt to impose our own preferences on people who disagree. Surely we should limit ourselves to constructing a neutral framework of rules within which people of diverse beliefs can live together in harmony."

Well, we have two responses to this. First, it doesn't follow from the mere fact that moral beliefs differ that they are all equally valid. The fact is that some people, including ourselves of course, might be wrong on ethical matters.

LORD ROBERT SKIDELSKY: No. [Laughter]

EDWARD SKIDELSKY: The second point is that although moral variety undoubtedly exists—of course it exists—it is less extensive than is often thought.

Anthropologists have produced some interesting work showing that there are vast commonalities around the world. All human beings live in groups that extend beyond the immediate family with some subtle form of political organization. All possess some notion of property and of exchange. All engage in activities over and above the procuring of necessities, whether those are religious, aesthetic, recreational. All revere the surrounding world and its plant and animal inhabitants. All, or almost all, cover their genitals. All treat their dead with ritualized forms of respect and not just as decaying flesh.

These and other commonalities define the distinctively human form of life. They reveal broad agreement on what we call the basic goods, the goods that constitute living well. Health, respect, security, relationships of love and trust—these are recognized everywhere as part of a good human life, and their absence is recognized everywhere as a misfortune.

So we have the materials for universal inquiry into the human good transcending limits of time and place. We're not doomed to a chauvinistic clash of civilizations mediated only by the rules of the market or international treaties.

So in Chapter 6 of our book, drawing on insights from around the world, we identify the seven basic goods that together make up a good life. These are health, security, respect, personality, harmony with nature, friendship, and leisure. I'm going to say a little bit about each of these in turn, and also about their political and economic implications.

So health. This is the least controversial of the basic goods. I think pretty much everyone would agree that health is a basic requirement of human flourishing. However, there is one complication. By health we mean the natural flourishing of the body; i.e., living out a reasonable span of life in good working order.

In recent decades, this traditional understanding of health has tended to give way to a new understanding of health as a process of perpetual improvement. One symptom of this is our obsession with longevity. Now when health across nations is compared, it is generally in terms of length of life because it's very easy to quantify. This is a great mistake, we think, because a long life does not necessarily mean a healthy life.

What we seem to be doing in the modern West is adding years to life but poor-quality years at the very extremity of life. This is not necessarily a good thing. I just want to note that.

Security, our second basic good, is the justified expectation that one's life will continue more or less in its accustomed course, undisturbed by war, revolution, or economic upheaval. Capitalism is an inherently insecure form of economic organization, one in which "everything solid melts into air," as Karl Marx famously put it. There is a continual churning-up of the social fabric as capital moves from one part of the world to another.

Minimizing the insecurities of capitalism is one of the chief goals of the social liberals of the early 20th century, men like Keynes and Beveridge. But it's a goal that has now been abandoned in favor of the new idol of growth.

Respect: By respect we mean taking another person's views and interests as things worthy of consideration, as things not to be ignored or trampled on. Respect is ideally mutual, because our deepest desire is for the respect of those whom we ourselves respect. This is the basis of self-respect, being respected by people you respect. The respect of someone you don't respect, a sycophant or a mob, leads as often as not to self-disgust rather than self-respect.

From this requirement of mutual respect we derive the principle of equality, meaning in the first instance equality before the law, but also in the second instance relative economic equality. I say relative, not absolute. We think inequality should be reduced. We're not levelers.

Personality, our fourth basic good. By personality we mean the ability to frame and execute a plan of life reflective of one's own tastes, temperament, and ideals. This is what is often called autonomy in the literature as well.

Private property, we argue, is an essential safeguard of personality because it allows one to forge an autonomous plan of life free from the tyranny of patronage or public opinion. So we're not anti-private property; we're not Marxists.

The trouble is in our society that private property is much too narrowly concentrated. So we want a broader distribution of property so that everyone can in a small way be a rentier and possess the freedom that in our society only the wealthy possess. Here we take inspiration from a strand of Catholic social thought called distributionism, which we are quite sympathetic to.

Harmony with nature, a sense of connection with the surrounding countryside, has always been recognized as part of a good human life. It's remarkable. If you look at depictions and illustrations of the good life around the world, they are always set in nature, amid plants and animals. Adam and Eve, of course, were placed in a garden. Chinese philosophers are usually depicted strolling among mountains and bamboo groves. It is a very consistent theme.

In the modern West, most of us, at least if we live in cities, are entirely alienated from the surrounding countryside. We buy our food from all over the world. We perhaps have no idea what farmers 20 miles away are producing.

So we are in favor of a greater localization of food production so as to give people some sense of rootedness in the surrounding countryside—and not just for ecological reasons, although those are important, but because this is a basic need of the human psyche, this sense of rootedness.

Friendship, our sixth basic good. We use the term friendship in a rather broad sense, to include all relationships of mutual affection and trust, including family relationships.

Friendship is not primarily an economic good, but it does have certain economic prerequisites. An economy characterized by constant downsizing, outsourcing, and restructuring is not going to be hospitable to the formation of deep, long-lasting relationships. In fact, the notion of friendship has become increasingly trivialized I think in modern Western societies, or instrumentalized.

Finally, leisure. I'd like to say a little more about this because it is perhaps the most misunderstood of all the basic goods on our list. In contemporary parlance, leisure is synonymous with relaxation and rest. But there is another, older conception of leisure according to which it is not just time off work but a distinct form of activity in its own right. Leisure in this sense is that which we do for its own sake and not as a means to something else.

The philosopher Leo Strauss wrote of his friend Kurt Riezler that "the activity of his mind had the character of a noble and serious employment of leisure, not of harried labor." So it is in this sense that we want leisure to be understood.

Why is leisure a basic good? Well, I think the reason is pretty clear. A life without leisure, where everything is done for the sake of something else, is a half-life. It's a life spent always in preparation, never actually living.

As Keynes put it, the purpose of man, the man without leisure "does not love his cat, but his cat's kittens; nor, in truth, the kittens, but only the kittens' kittens, and so on forward forever to the end of cat-dom." Such a man is always looking forward to a consummation that he can never in the nature of the case actually enjoy, so his life has something absurd or futile about it.

Okay, so these are our basic goods. What can we do to realize them?

Well, I think the problem is in one sense a personal one. It's a problem for individuals to try and realize these goods in their own lives and in the company of friends.

But it also has a political aspect because we believe that local initiatives or personal initiatives are not enough to change the tenor of society as a whole. The state also has a crucial and legitimate role in making it easier for people to lead a good life, in creating the material conditions under which the good life can flourish.

So what is the state's role in this? To answer that question I am going to hand back to Robert.

LORD ROBERT SKIDELSKY: Thank you very much. That really brings us to the last bit of the book, when we make some suggestions. This is an area in which we are quite likely to run into a lot of flak because as soon as high-minded thoughts get reduced to practical measures, the area of real controversy starts.

Now, as we see it, our problem briefly stated is to convert technological unemployment into increased leisure for all. Technological unemployment grows the whole time, with automation now increasingly replacing jobs in the service sector, which were thought to be previously relatively immune to automation, but automation is now invading that area as well, and therefore into all areas of economy. Potentially, most of them are subject to automation.

We have to find ways of distributing work, leisure, and income more equally, not only between classes but between generations. Otherwise we end up with a population of drones serving a small minority of super-wealthy, and that would be a very ironic and awful end to the promise of technological civilization. Our suggestions are not, as I say, exhaustive but indicative of ways in which we can convert the gains of technology into greater leisure.

As Edward just said, the state has a part to play in this, a vital part. We can do a lot ourselves by ourselves deciding what a good life is and trying to lead it, but the state can make it easier.

Now, the greatest evils of modern capitalism, I think—and here I do follow Keynes to some extent—are the evils of unemployment and insecurity about health. That second grows increasingly important the longer we live.

That challenges two of our most important basic goods, security and health. Governments have to resume responsibility for maintaining full employment. In the United States, I would argue, we both would argue, for socializing medical care. Both will relieve some of the pressure to go on working.

By full employment, though, we don't mean a guarantee of a 40-hour working week. One can have full employment on the basis of 30 hours, or even 25 hours. We don't, though, want a society divided into those, rich or poor, who work 60 hours a week and a large number who can't get enough work to fulfill their basic needs. So full employment, but we have to rethink what we mean by full employment—not the standard full employment that we now think of, but a full employment based on shorter hours of work.

The simplest approach to reducing the hours of work would be to legislate a maximum, to limit the working week, and/or increase statutory vacation times. There's nothing new in this.

I think again, people often say, "But that would be an intolerable interference with the individual right of contract, to work as long as a person wants."

But governments have always interfered with hours of work. From the beginning of the factory acts in the 19th century, they have taken steps to limit the amount of work that an employer can demand of his workforce.

France has taken the lead in this, not just recently in the 35-hour working week, but much earlier they legislated a maximum of 40 hours a week. So they have taken a lead.

Trade unions have always pressed for a shorter working week. And the European work directive also lays down, for guidance only, a maximum working week of 40 hours.

So I don't think we are saying anything so radical in this, though it may seem to be so. It's really just carrying on what governments have always done since the Industrial Revolution.

Within such a framework, it would be open to employers and employees to negotiate flexible retirement and work-sharing arrangements. Now, people are aghast at the idea of work sharing, and it wouldn't apply to a lot of occupations. But in some occupations work sharing is the rational and civilized way of distributing the work burden.

If your objective is to maximize growth, then you don't want work sharing, you don't want an idea that there is a limited amount of work to go around, because you are always trying to increase the growth of the economy. But if growth is abandoned as the main policy objective, then work sharing is a civilized way of bringing about a balance between demand for labor and supply of labor in a world in which automation is shrinking the demand for jobs. I think that's the perspective we have to always bear in mind.

Now, that's not enough. We need something else. That's why we come to favor the idea of a basic income for everyone.

I want to just define it. By basic income we mean income paid by the state to each full member or accredited resident of a society regardless of whether he or she wishes to engage in paid employment, or is rich or is poor—in other words, independently of any other source of income a person may have.

Now, people say, "Oh dear, this will be a terrific disincentive to work." Yes, that is true. But then the incentive to work should no longer be at the center of our aims when we are in a society of abundance. It's a scarcity perspective, and we are trying to say let's let our imagination move forward to a world in which there is abundance or plenty, and then how can we reduce the pressure to work? That would be one way of giving people income independent of work. It has been proposed by many economists.

It is always said that we are too poor to do anything like that, and we should start in a very modest way. Well, I agree we should start in a modest way, but then build it up as the national income grows. So that is the second step, to reduce the pressure to work.

But that's not the only thing. We also need to reduce the pressure to consume. That would help to reduce the pressure to work as well, because we work mainly to consume.

But it would also be a good thing in its own right. Consumption has become the great placebo of modern society, our counterfeit reward for working irrational hours. It brings us no lasting contentment, and by forcing us into competitive relations with others it frays the ties of friendship and mutual trust, as Edward has said.

Well, how do you control consumption? Again, isn't that an intolerable interference with people's choice?

Well, you have to go back in history a bit. Societies used to have what they call sumptuary laws, which were taxes on the purchase of particular luxury items.

In modern societies you can't go back to a system of sumptuary laws. But what you can do is to think in terms of a general consumption tax, a tax on buying, a tax on that bit of one's income that is spent on buying things, and income that is not spent on buying things would not be taxed at all. In other words, you tax consumption, but savings are not taxed.

It would also be levied at a progressive rate, with the poor exempt from it, because their consumption would mainly fall on necessities. But as you rose in the income scale, as people spend more and more on consumption, so the tax would rise.

Now, I think that would kill three birds with one stone. You would have a progressive tax system, which would finance other social goods that you would want to increase. It would encourage saving, which people need to do anyway to provide for that increasing gap between work and death known as retirement. And it would reduce the pressure to consume. So I think it fits all those boxes.

So I think it's a very interesting thing we could think of doing, again advocated many times. From John Stuart Mill onwards, consumption tax has been thought superior to an income tax, but never tried because of practical difficulties, but recently revived.

Finally, there is another way you can limit the pressure to consume, and that is by thinking seriously about how big a part one wants advertising to play in the ongoing life of society.

Now, economists who believe in consumer sovereignty, and that is the central axiom of economics, do not believe that advertising has any effect at all in changing preferences; its role is purely informational. Well, I think that is an abstract view, but I don't think it stands up to the test of reality.

I think we would all accept honestly that advertising shapes preferences and makes us more insatiable, because it always reminds us of things we haven't got and which would be desirable to acquire.

And it's not informational. A lot of advertising doesn't give you any information at all. It's identity creation, it's pointing out that you're a person of greater allurement, merit, and so on if you possess these things. It runs right through our public discourse on the economy.

So there are ways you can limit advertising. They already exist. We already have limits on advertising. So it is an extension of a principle that is already accepted.

We don't allow advertising for certain goods which are considered harmful. They are actually, interestingly, called "sin goods" by economists. We just propose extending that principle more broadly.

Anyway, I think these are our main proposals.

Whatever readers or audiences may think of those particular proposals, not to try and develop a collective vision of the good life, simply to blunder on without having a view about what wealth is for, is an indulgence that I don't think rich societies can any longer afford.

The greatest waste confronting us is not one of money but of human possibilities. "Once we allow ourselves to be disobedient to the test of an accountant's profit," Keynes said in 1930, "we have begun to change our civilization." That's really the agenda of this book.

Thank you.

Questions and Answers

QUESTION: Warren Hoge, International Peace Institute.

As I listened to you talk about the book and I tried to imagine an ideal society following the principles you've laid down, my impression is that we Americans are the farthest from it of any society in the world. Am I right about that?

Number two, part of the same question, are there societies or regions or countries that are closer to your ideals than others?

LORD ROBERT SKIDELSKY: In some ways you are right, but I don't think you're entirely right.

I think Americans, certainly those who lived in consciousness through the 1950s and 1960s, will remember that America was a very different society then from what it is now. You were still living in the aftermath of the New Deal, and there were New Deal renovations by Lyndon Johnson, extensions. There were quite strong unions that were pushing up wages in line with productivity. And inequality was falling and hours of work were falling quite rapidly. America was taking the lead in the reduction of hours of work in the middle of the century because they realized that people wanted to get the fruits of abundance more abundantly.

So that America—which is the real America? There's a Roosevelt America, there's a Reagan America, and that debate goes on today in American politics. I think it's a central dividing line.

So in some ways I agree America is more individualist, Europe is more collectivist. But I'm not sure that America is in principle remote from the message of this book. I hope the message isn't entirely alien to Americans because I'm sure our publisher hopes not as well.

QUESTION: Could it be that things just have a certain velocity, that people had suffered because of the war and the Depression and they needed many things? And of course Reagan did change things.

But I also was wondering about—you don't mention the striving for beauty, creating beautiful things. A lot of very beautiful things have been created because of greed, and it has inspired designers and people who fulfill themselves creating those things. You left creativity out of what we heard, I think.

EDWARD SKIDELSKY: You're absolutely right. We have nothing against creativity, the desire for knowledge, those things. Our point is that they don't always need to be motivated by money. There was a good deal of scientific inquiry and aesthetic creation before capitalism, and there should be a good deal after capitalism as well.

LORD ROBERT SKIDELSKY: I think philanthropy is something that we do actually praise in our book, and it is one of the great achievements of modern civilization. Through philanthropy and patronage, the great achievements of the Renaissance were financed, and it goes up to the present day.

And I don't think we'd want to stop that in any way. In fact, we'd want to go on encouraging it. That is why we are not in favor of complete equality of wealth or incomes. We want to give continued scope to that kind of patronage.

But that does not actually solve the main problems. The giving of the rich, which is absolutely to be accepted and admired, does not solve the set of problems that we have been talking about.

QUESTIONER: The forces that create are often against something. So if everything is perfectly in balance, which will probably never happen, will things become bland?

EDWARD SKIDELSKY: I think the striving for beauty, for knowledge, these are natural human instincts. They won't disappear in the kind of world we imagine.

LORD ROBERT SKIDELSKY: I think the mistake is to link the striving for excellence with commerce. The striving for excellence is an independent human trait, and it has been there at all times. It has produced wonderful achievements—monuments, artifacts, works of poetry, art, philosophy, and everything else. That is in the nature of the human being.

But it hasn't been until very recently linked to commerce as closely as it is now. It can be exercised in many different ways.

I think a lot of people will argue, "Look, what you're denying is the striving for excellence by trying to inhibit the desire for making money." That's confusing two different aspirations.

QUESTION: I would like you both to say something about the relationship of your themes to the current crisis in Europe. The debate in Europe these days, at least as portrayed in the media, is not about the good life. It's not even mentioned to my knowledge. It's about growth versus austerity. Actually, at least some of what you have said would be on the lines of reducing growth; in other words, working fewer hours per week, not worrying about wealth accumulation as an objective, and so on.

But it seems to my mind a little disconnected, or maybe more than a little, from the debate. So how do your ideas pertain to the presumed crisis in Europe, which presumably affects the United States as well?

LORD ROBERT SKIDELSKY: Our book is really in the spirit of Keynes's essay, "Economic Possibilities for our Grandchildren." Now, Keynes was of course deeply concerned with the current crisis of the Great Depression and produced plan after plan to try and solve the problem.

But he said: "Okay, let's look beyond that. Assume we have solved that problem of the Depression. Then what do we do? Do we just start up again doing exactly the same thing?" So I think it is in that spirit.

I can say a lot about how to solve the Eurozone crisis. I could solve the Eurozone crisis if I was given supreme power. Technically it's not difficult. Politics make it extraordinarily difficult.

But let's go beyond that and assume we have got back to an economy which does more or less behave normally, which does give people the chance of working, and which is not subject to these big collapses, which happened in recent years. Let's assume that that's done. Then what? That's really the question.

I know it's disconnected, in the same way as one might regard Keynes's possibilities as disconnected from his work on the crisis. But I do think they are separate subjects.

I think one thing Keynes would say—it's not in our book, but I would say don't mix up recovery with reform.

Recovery is very, very important. But I think he would be against slapping lots of new regulations on the banks and at the same time ordering them to lend. I think he would be against that particular sequence. He'd say, "Get the recovery going and then we'll think about the longer term." I think that would have been his attitude.

EDWARD SKIDELSKY: Just to add to that, we're not antigrowth dogmatists. We recognize that in certain situations growth is absolutely vital for practical reasons. We just think that growth can't be the permanent long-term goal of government.

LORD ROBERT SKIDELSKY: Yes. And just to add one thing to that, we always say, when people say "Don't we want more growth?" You always have to say, "Growth of what?" Growth of pollution? That's part of GDP.

You know, GDP is a very, very imperfect measure of welfare because it only deals with things that pass through markets and are subject to market transactions. They're the only things that feature in GDP. So people who say, "We want the growth of GDP to continue," have to define really what they mean and why GDP is a reasonable proxy for welfare. We believe there is a big disconnect between the two.

QUESTION: I'm Hans Decker.

When you talked about the seven basic goods, you mentioned the role of the individual briefly, you talked about the government a little more than that, but I didn't hear you use the term "civil society." Is there such a thing? What role does it play, in particular vis-à-vis the United States?

EDWARD SKIDELSKY: It's vital, absolutely vital, because one of our basic goods is friendship, which is our word for civil society. You can't live the good life on your own because man is a social animal, the good life is something you live together with other people.

So civil society institutions are absolutely vital. Our point is simply that it does need some encouragement from the state as well, because at the moment our civilization is set up that all the incentives point to the other direction, towards work and consumption, so we want to shift the incentives.

LORD ROBERT SKIDELSKY: And it's one of the things that gives us hope for the future, that civil societies, civil associations, are natural in our sorts of societies. It's one of the things Tocqueville noted about the United States when he came there, the richness of civil society.

I think it has been eroded a little bit. So part of the good life program is to encourage it.

DAVID SPEEDIE: One related point you haven't specifically mentioned in this talk but which appears in your essay on Bloomberg from Monday: You mentioned both Margaret Thatcher in Britain and Ronald Reagan circa 1980 adding the dimension of the ideological faith in the market system. Is this something where really the horse is out of the gate and can't be got back in? I mean, it seems that this has transcended political divide. Certainly, Obama has taken a lot of flak from his base on faith in the markets.

Where do you see the market system—as being reined in, curbed, or in any way brought into line with your agenda?

LORD ROBERT SKIDELSKY: Market systems have always operated within a framework of law and of thought. It is how you draw that framework, where you draw that framework. I think a lot of right-wing rhetoric, both in Europe and the United States, is completely divorced from the reality of how markets actually work.

For example, in the United States, government has played a huge role, both in the technological development of society and through its procurement policies, through its defense expenditure. That is a major government program, and it is the one bit of government spending that is actually not criticized much. If you want to increase government spending for defense, absolutely, because that links up with security. If you want to increase it for any other purposes, you are interfering with the free market. Now, I think that is a lopsided view of things.

The American interstate highway system—you know, there are lots and lots of things that the government has done over the course of American history in order to make the market work in a way that people want it to work.

Reagan had this phrase, "The government is the problem, not the solution," and then he had this rather nice vivid idea that of a working day, you work until 1 o'clock for the government and only the rest of the time for yourself. All that just doesn't seem to me to make any sense.

So I think that debate is remote from the reality of how markets behave. We are not against markets, but we do insist on frameworks and limits to markets. The debate is where you draw those limits.

QUESTION: Simon Targett.

The whole phrase of "the good life" and "la dolce vita"—there are some countries that are suffering for having almost too much of a good life. You might think of Greece; you mentioned France in a favorable way; Italy, of course; Spain. Where do you draw the line between countries which are living a good life and how much of a good life they should have?

EDWARD SKIDELSKY: That may be true. But in fact if you look at the countries in Europe with the shortest working hours, they are not among those that are suffering most in the current crisis, Holland and Germany. Italy actually has rather long working hours. So I don't think there is a direct correlation between living the good life and the problems we are seeing at the moment.

LORD ROBERT SKIDELSKY: Yes. And one mustn't confuse balmy weather with the good life. You know, one of the things that makes life so agreeable in the Mediterranean is precisely the fact that it has a very, very benevolent climate and people are outdoors a lot of the time. Obviously, it's easier to enjoy yourself when the sun is shining than when it's raining the whole time. That's why the English tend to be a bit miserable.

So I don't think they are prematurely wedded to the good life at the expense of actually being able to earn their living. That's a problem of the way governments are organized, the way taxes are not collected, corruption. All those things need to be fixed.

But many people say that they admire the French for their way of life; "The only trouble with France," they say, "is the French. If they weren't there, the society would be absolutely perfect." That's something you often hear.

But there are some societies which we feel have instinctively got the secret of the good life and are prepared to defend it come what may.

JOANNE MYERS: In closing, let me just say how grateful we are that you both were able to visit us today and share your ideas.

Also, for those of you who are interested in this topic, I refer you to our Web site, www.carnegiecouncil.org, for transcripts on Robert Shiller, Derek Bok, and Ronald Dworkin, who address similar issues.

Thank you very much for joining us today.