Emily Northrop (2000) questions whether the fundamental cause of scarcity — unlimited wants — is really innate, and argues that it may be merely constructed [see Diamonds are Bullshit]. She notes that some people manage to resist consumerism and choose different lifestyles embodying simplicity, balance or connection (to the earth and to others). The fact that some are able to do this suggests unlimited wants aren’t innate. In arguing that our wants are constructed, she emphasizes the power of social norms and the power of advertising: some of society’s cleverest people and billions of dollars a year are spent creating and maintaining our wants. (Hill and Myatt 2010, 16)

Northrop also points out that the notion of unlimited wants puts all wants on an equal footing: one person’s want for a subsistence diet is no more important than a millionaire’s want for precious jewellery. This equality of wants reflects the market value system that no goods are intrinsically more worthy than others — just as no preferences are more worthy than others. This is clearly a value judgement and one that many people reject. Yet economics, which unquestioningly adopts this approach, claims to be an objective social science that avoids making value judgements! (Hill and Myatt 2010, 16)

It is noteworthy that Keynes disagreed that ‘all wants have equal merit’. Rather than identify the economic problem with scarcity, he identified it with the satisfaction of what he called absolute needs: food, clothing, shelter and healthcare (Keynes 1963 [1931]: 365). This definition of the economic problem puts equity and the distribution of income front and centre. It contrasts with the textbook approach of treating equity as a political issue outside the scope of economic analysis. (Hill and Myatt 2010, 16)

Another economist who rejects the ‘innate unlimited wants’ idea is Stephen Marglin (2008). Unlike Northrop, he doesn’t blame advertising or social norms. Rather, he sees the fundamental cause to be the destruction of community ties, which creates an existential vacuum: all that’s left is stuff. Goods and services substitute for meaningful relationships with family, friends and community. His conclusion: as long as goods are a primary means of solving existential problems, we will always want more. But what or who is responsible for undermining community ties and bonds? Marglin argues that the assumptions of textbook economics, and the resulting policy recommendations of economists, undermine community…. (Hill and Myatt 2010, 16-17)

According to Marglin, the textbook focus on individuals makes the community invisible to economists’ eyes. But it is our friendships and deep connections with others which give our lives meaning. So community ties, built on mutual trust and common purpose, have a value — a value that economists ignore when recommending policy.

Furthermore, Marglin argues that rational choice theory — emphasized in the mainstream textbooks — reduces ethical judgements and values to mere preferences. Are you working for the benefit of your community? That’s your preference. Are you cooking the books to get rich quick and devil take the hindmost? That’s your preference. Being selfish is no worse than being altruistic, they are just different preferences. (Hill and Myatt 2010, 16)

Indeed, according to mainstream textbook economics it is smart to be selfish. It not only maximizes your own material well-being, but through the invisible hand of the market it also produces the greatest good for the greatest possible number. This view influences the cultural norms of society and indirectly erodes community. This influence of economics on attitudes isn’t mere speculation. Marwell and Ames (1981) document that exposure to economics generates less cooperative, less other-regarding, behaviour. Frank et al. (1993) show that uncooperative behaviour increases the more individuals are exposed to economics. (Hill and Myatt 2010, 17-18)

(….) Marglin argues that the textbook focus on individuals is problematic. John Kenneth Galbraith went farther. He thought the textbook focus on individuals was a source of grave error and bias because in the real world the individual is not the agent that matters most. The corporation is. By having the wrong focus, economics is able to deny the importance of power and political interests. (Hill and Myatt 2010, 18)

Further, textbooks assume that the state is subordinate to individuals through the ballot box. At the very least, government is assumed to be neutral, intervening to correct market failure as best it can, and to redistribute income so as to make market outcomes more equitable. (Hill and Myatt 2010, 18-19)

But this idealized world is so far removed from the real world that it is little more than a myth, or ‘perhaps even a fraud’ (John K. Galbraith 2004). The power of the largest corporations rivals that of the state; indeed, they often hijack the state’s power for their own purposes. In reality, we see the management of the consumer by corporations; and we see the subordination of the state to corporate interest. (Hill and Myatt 2010, 19)

(….) Galbraith argues that the biggest corporations have power over markets, power in the community, power over the state, and power over belief. As such, the corporation is a political instrument, different in form and degree but not in kind from the state itself. Textbook economics, in denying that power, is part of the problem. It stops us from seeing how we are governed. As such it becomes an ‘ally of those whose exercise of power depends on an acquiescent public’ (John K. Galbraith 1973a: 11). (Hill and Myatt 2010, 19-20)