9

Infas-Report Wahlen (1980), ~ d e n - w ~ r ~ m b e r ~ 1980, Bonn-Bad Godesberg.

Xnfas-Report Wahlen (1980), Nordrhein-Westfalen 1980, Bonn-Bad Godesberg.

I rv ing , R E M (1969/70), 'The Gernan Liberals: ChangirgImage of the Free Democratic P a r t y ' , Parliamentary Affairs, 23 (11, pp 46-54.

Kaack, H (19743, ' D i e Liberalen. D i e FDP.im Parteiensystem der Bundesrepublik', i n D i e zweite Republik, ed R Lowenthal and H-P Schwartz, S t u t t g a r t , Seewald, pp 408-432,

Kaack, H (19781, 'The FDP i n t h e German Pa r ty System', i n Germany a t the P o l l s , ed K if Cerny, Washington, American Enterpr i se I n s t i t u t e f o r Pub l i c Pol icy Research,

Kaiser, C C (1980), 'Ein Wahlkampf m i t TrauerfXor', D i e Z e i t (North A m e r i c a n Ed i t ion ) , 2 May.

Kirchheimer, 0 (19661, 'Germany: the vanishing oppos i t i on ' , i n P o l i t i c a l Opposit ion i n Western Democracies, ed R A Dahl, N e w Haven, Yale Universi ty Press, pp 237-259.

Lipse t , S M and Rokkan, S (1967), 'Cleavage s t r u c t u r e s , pa r ty sys tems and vo te r alignments: an in t roduc t ion ' , i n Pa r ty Systems and Voter Alignments: Cross-National Perspec t ives , ed S F9 Lipse t and S Rokkan, N e w Pork, The Free Press, pp 1-64.

Loewenberg, G (19781, 'The Development of the German Pa r ty System', i n Germany a t the P o l l s , ed K H Cerny, Washington, A m e r i c a n En te rp r i se I n s t i t u t e for Publ ic Pol icy Research, pp 1-27.

Oberndthfer, D and l i e l k e , G (1980), ' D e r neue Mi t t e l s t and en tsche ide t d ie WahX', D i e Z e i t , 26 September.

Pulzer , P (19781, 'Responsible Pa r ty Government and S tab le Coafiion: the case of the German Federal Republ ic ' , P o l i t i c a l Studies; 26 (2), pp 181-208.

Smith, G (1976), 'West Germany and the P o l i t i c s of C e n t r a l i t y ' , Government and Opposit ion, 11 (41, pp 387-407.

pp 77-110.

.................... THE P A ~ A ~ O ~ OF AFFLUENCE : POS I T 1 UMAL COMPET I T I OH OR COERCED E ~ C ~ A ~ ~ ~ E ?

The not ion of ' p o s i t i o n a l compet i t ion ' , developed by Fred Hirsch (1977) i n Soc ia l L i m i t s t o Growth, has been used a s an explanatory concept i n dea l ing with some of the unforeseen shortcomings and p o l i t i c a l effects of economic growth. I n Socia l L i m i t s Hirsch formulates three ques t ions about economically advanced societies, two of which he sought t o answer using the concept of p o s i t i o n a l cornpetiton. The first ques t ion , which he called ' the paradox of a f f luence ' and which is t h e focus of t h i s paper, is:

Why has economic advance become and remained so compelling a goal t o us a l l as ind iv idua l s when i t y i e l d s d i sappoin t ing f r u i t s when most, i f no t a l l , of us achieve it? (Hirsch, 1977 p 6)

I n t h i s paper t he a s se r t ion e x p l i c i t i n the quest ion w i l l be assumed c o r r e c t . But it w i l l be argued that the idea of competit ion f o r p o s i t i o n a l goods is not u se fu l i n explaining the paradox as, first, the r e s u l t s a t t r i b u t e d t o competit ion for p o s i t i o n a l goods t r a n s p i r e t o be an a t t r i b u t e of t he method of exchange unre la ted t o the de f in ing p r o p e r t i e s of p o s i t i o n a l goods and the re fo re , secondly, there is a t best a h ighly cont ingent r e l a t i o n s h i p between t h i s a t t r i bu te and economic growth. w i l l be defined; i n the second i t s i n a b i l i t y t o he lp expla in t h e paradox w i l l be demonstrated; and i n the t h i r d i t w i l l be argued tha t the not ion of 'coerced exchange' w h i l s t less ambitious, o f f e r s a more accura te i n s i g h t i n t o the c o l l e c t i o n of phenomena Hirsch wishes t o examine.

I n the first s e c t i o n t h e concept of a p o s i t i o n a l good

10 A d r i a n EZ Zis

One

I t is important t h a t a pos i t i ona l good be defined independently of the method of d i s t r i b u t i o n , otherwise ' p o s i t i o n a l competit ion' w i l l be desc r ip t ive rather than an explanatory concept. A pos i t i ona l good must have, according t o Hirsch, the following two q u a l i t i e s :

F i r s t , e i ther i t must be unavoidably scarce ( e . g . a secluded country co t tage i n a scenic ye t access ib le a rea) o r i ts value must vary i n inverse proportion t o the volume of such goods produced (e.g. a c a r on a p o t e n t i a l l y overcrowded road o r a 'snob-good' which is not valued f o r i t s i n t r i n s i c q u a l i t i e s but f o r the p re s t ige accruing t o ownership).

Secondly, a pos i t i ona l good must be a luxury good; t h e e l a s t i c i t y of demand f o r t h e good must be g r e a t e r than un i ty . There i s , however, an ambiguity i n the concept of a luxury good which could lead t o t h e exclusion of snob-goods from the category of p o s i t i o n a l goods: w h i l e snob-goods a r e luxury goods within a given income s t r u c t u r e ( i . e . a s one 's income rises r e l a t i v e t o o the r people 's one ' s demand f o r snob-goods inc reases ) , it i s not evident t h a t they a r e luxury goods over t i m e (as the soc ie ty a s a whole g e t s r i c h e r , demand throughout t he population inc reases ) , In o t h e r words the demand f o r snob-goods may be analogous t o the propensity t o save, which increases with income cross-sec t iona l ly but not over time. Hirsch demonstrates t h a t snob-goods a r e luxury goods i n the former sense b u t not i n t h e l a t t e r , and i m p l i c i t l y a t tempts t o make the connection between t h e two senses of luxury good by introducing the idea t h a t as bas i c needs are s a t i s f i e d , demand f o r unneeded luxury goods increases (Hirsch, 1977, p 32,66). These goods include snob-goods which d e f i n i t i o n a l l y give s a t i s f a c t i o n because t h e y a re not needed. However 'needs' a r e protean th ings , which i s why the concept i s assiduously avoided i n most economic l i t e ra ture . Beyond the subsis tence economy, which B r i t a i n may reasonably be assumed t o have l e f t before Hirsch ' s paradox became apparent , needs are s o c i a l l y determined. For the l i n k between cross-sect ional and long-run tendencies t o be made it would have t o be demonstrated, f i rs t , t h a t t h e i nd iv idua l ' s assessment of h i s own needs i s growing more slowly than is the command over resources t h a t economic growth provides h i m w i t h , and, secondly, t ha t within the freedom which t h i s s h o r t f a l l of needs over resources provides, there i s an increas ing tendency f o r ind iv idua ls t o opt f o r t he pu r su i t of snob-goods r a t h s r than o t h e r luxury goods. For these reasons, snob-goods w i l l not be considered here a s pos i tbna l goods, although Hirsch does include them.

A f i n a l assumption about p o s i t i o n a l goods should perhaps be made e x p l i c i t : t h a t t h e y e x i s t and i n s u f f i c i e n t volume f o r any e f f e c t s stemming from t h e i r exis tence t o be ' s i g n i f i c a n t ' . For t he sake of s impl i c i ty , t h i s w i l l be taken t o mean t h a t i f they can explain any of the paradox they can explain a l l of i t . Hirsch himself laments t h e ' l a ck of a q u a n t i t a t i v e dimension t o t h i s c r i t i q u e ' (1977, p 181), a s p e c i f i c b u t unmentioned danger of which is t h e f a i l u r e t o d i s t ingu i sh between over-crowding, e x t e r n a l i t i e s , s o c i a l c o s t s , e tc increas ing i n general w i t h economic growth and t h e over-crowding of a s p e c i f i c road, plant, occupation o r suburb. In o the r words no d i s t i n c t i o n i s made between, f o r example, t he i n a b i l i t y t o increase congestion-free p r i v a t e t r anspor t given a c e r t a i n s tock of roads and the i n a b i l i t y t o increase t h a t s tock .

A pos i t i ona l good is the re fo re one f o r which competition is necessa r i ly and forever zero-sum, a s , i r r e s p e c t i v e of t h e method of d i s t r i b u t i o n , the supply cannot be increased. In con t r a s t a material good is one which the process of economic growth can provide more of (e .g . cookers o r type-wr i te rs ) . As t he supply of mater ia l goods increases , one can expect t h e demand f o r p o s i t i o n a l goods t o increase through a simple s u b s t i t u t i o n e f f e c t .

-1

TWO

Having defined p o s i t i o n a l goods and assumed them t o play a s i g n i f i c a n t p a r t i n economic l i f e , w e may now see how Hirsch uses them t o expla in the paradox of aff luence. In order t o do t h i s he introduces a f u r t h e r , c r u c i a l no t ion , t h a t of ' in te rmedia te ' o r 'defensive ' consumption, t he consumption of goods which are

The Parczdox of Affluence 2 7

a means to a final good, rather than goods of intrinsic value to the consumer:

Because positional goods are allocated by an auction nrocess o r its equivalent, relative rather than absolute command over economic resources deployed in the auction will determine one's take. This struggle for relative shares will absorb real resources that add to the consumption expenditure necessary to achieve given ends, and in this sense add to 'needs'. So if one's income remains unchanged while the income of other people rises, one's command over the positional sector will fall. (Hirsch, 1977, p m 2 )

In other words there is an eCOROmiC inefficiency stemming from competition for 2ositional goods which leads to increased defensive consumption being necessary f o r the same level of want satisfaction. ?eople have to run faster and faster to stay relatively and absolutely where they are, but this fact escapes the statistics upon which economic analysis is based as consumption expenditure is assumed to be directly upon want-satisfaction. Take leadership positions, one of Hirsch's examples: assuming them to be luxury goods in inelastic supply, competition f o r them leads to socially wasteful credentialism, a futile paper- chase in which ever higher qualifications of no immediate relevance to the content of the job are required in order for one to maintain access to the same level of job, Hence competition f o r positional goods leads, according to Hirsch, to a Prisoners' Dilemma type situation which in turn explains the paradox of affluence.

The trouble with this line or argument is that defensive consumption is both a necessary and sufficient condition for the explanation of the paradox which means that either there is a causal link between competition for positional goods and defensive consumption or the concept of positional goods is redundant in the explanation of 'positional competition'. In order to show the absence of a causal link it is only necessary to look at two of the methods of containing excess demand for positional goods which Hirsch isolates: auction and screening. With auction, the pure market method of distributing scarce goods, the price increases in order to ration demand. For example, as the demand for country cottages increases but supply does not, the price rises, but there is no motive for defensive consumption as there are no intermediate goods which will help get the edge in competition. If positional goods are distributed through the pure auction process the paradox of affluence cannot be explained. On the other hand, with screening, as in the example of credentialism and leadership positions, Hirsch's case study amply demonstrates that it is not the inelasticities of supply which cause the wasteful absorption of resources that credentialism involves, but the high costs of filling posts from outside the relevant organisation, the ability of leaders to fix their own salaries and:

the modern prevalence of career ladders and established pay-scales in large organisations (which) make such adjustments (via wage changes) in response to market pressures intensely unpopular, (Xirsch, 1977, p 30 )

It would therefore appear that the paradox of affluence cannot be explained by reference to any innate qualities of the goods competed for, namely those of positionality. In the final section it will be argued that defensive consumption, and therefore the paradox of affluence, is an attribute of the method of distribution and not the good distributed.

T"7;ee

The distinguishing trait of the goods under consideration lies in the fact that competition for them is 'coerced'. The concept of 'coerced exchange' comes from Anthony Heath's Rational Choice and Social Exchange, although he employed it in a rather different context:

The difference between two individuals being better of f indulging in exchange than not (e.g. 'your money or your life') and two individuals being better off after indulging in exchange

-

12 A d r i a n E 2 Zis

than before (e.g. barter transactions) is the difference between voluntary and coerced relations. (Heath, 1976, p 19-20).

--

PrIany market transactions read as voluntary may, on investigations transpire to be coerced, For example, Radio Luxembourg has recently been advertising a $5 package including tape-recorded advice and examples of letters of application designed to improve purchasers' chances of success at job interviews, Assuming the effectiveness of the product and no significant multiplier effect stemming from the financial success of the venture on the part of the entrepreneurs, one's job chances are adversely affected simply by doing nothing. Either one joins in and sends off €5 or one gets lefT-behind. Either way there is no aggregate benefit in such an exchange and consumption of the product, although recorded in the National Accounts as final, is what Hirsch rightly deems defensive. It leads to no net benefit in welfare and indeed adversely affects it if one has to run to stay where one is in the job queue. It is this argument which Hirsch is implicitly applying to the race for educational qualifications. However, the fact that competition for these goods is coerced in the specific sense outlined above does not take us very far down the road to explaining why, if it is not that they are positional goods, these goods should be the ones for which competition is so structured. Nor does it tell us why, if indeed it is the case, goods distributed in such a way should be of increasing importance. It is, however, obvious that such goods fulfill two conditions: first, they are distributed through a mechanism of individualistic competition and secondly, competition for them is channelled through an intermediate good (e.g. education).

Hirsch's contention was that there are certain goods - positional goods - which, however distributed, will lead to a paradox of affluence as demand for them increases. It is the contention of this paper that there are certain methods of distribution, which, whatever the goods under consideration, will lead to the phenomenon Hirsch associates with affluence. The difference between coerced and positional competition is that the former is a descriptive one whilst the latter aspires to be explanatory. It is beyond the scope of this paper to develop a typology of circumstances in which coerced competition arises,. but it is important to note that unless one can show a causal link between economic gyowth and the prevalence of the method of exchange then the 'paradox of affluence' is only contingently related to affluence itself.

References Heath, A (1976), Rational Choice and Social Exchange, Cambridge: Cambridge University Press.

Hirsch, F (1977), Social Limits to Growth, London: Routledge and Kegan Paul.

. . . . . . . . . . . . . . . . . . . . . . . .

Qr i 'THE R I G H T TO ASSOCIATE ' AND THE EF~ECTIVE~~ESS OF V ~ L U N T A R Y

ANDREW REEVE

This note is prompted by the observation of the European Commission on Human Rights that closed shops violate the right to associate. This view derives from the assertion that a right toassociate includes the right not to, associate, and from the judgement that the latter is violated by an organisation which is inclusive, bringing in those who have no wish to join.

On that view, the right not to associate is apparently violated by the inclusion of an unwilling individual, whether by making him join or by keeping him in. Analogously, the exclusion of an individual who wishes to join and the ejection of an existing associate who does not wish to leave would seem to violate the right to associate. Clearly, no voluntary association could respect all these rights: the individual would be entitled to join at will, being neither