by Daniel Yankelovich

Overview

The affluence effect is the meaning that people give to their affluence or lack of it. For most people feeling affluent means freedom and empowerment. They believe that affluence brings the power to do whatever one wants to do. This meaning of affluence has had a dramatic effect on cultural values that the slower growth of recent years has blurred but not changed in its essentials. Because of it, many traditional values, rooted in generations of want and scarcity, have been swept aside and tens of millions of people find themselves experimenting with new forms of self-expression and individuality that were unthinkable or impractical in earlier periods.

Since the end of World War II, the affluence effect has evolved in three stages, with some industrial democracies now in the third stage and others still in the first two stages. The first stage occurs when affluence is new, and people suspect that their economic well-being may not be real. Incomes may be rising, but people fear it will not last. Confidence is low. Values remain conservative and traditional. The focus is on social bonds, sacrifice, hard work, and saving for the future; and personal choice is limited.

Except for its college youth, the United States persisted in this first "it-can't-last" stage until the late 1960s. The Depression may have ended with World War II, but it was not until the late 1960s that Americans who had lived through the Depression were able to put their Depression psychology, and the fear, insecurity, and outlook it engendered, behind them. In West Germany and Japan, the combined effects of depression, defeat in war, inflation, and poverty were so traumatic that the outlook they engendered persisted throughout many years of growing affluence as economists would define it. Only in the early 1980s did these two economic giants move into the second stage.

Psychologically, a startling discontinuity takes place between the first and second stages of the affluence effect. From an objective economic point of view, incomes may be rising slowly and steadily. But subjectively, the transition is abrupt. Remarkably, people swing from undue skepticism about their economic prospects to undue optimism. They leap from doubting the reality of their affluence to assuming that it is a permanent condition and that they and their nation can now spend freely without worrying about tomorrow. They believe they can indulge themselves and make up for lost time, and their nation can address long-neglected problems and fix them. Almost overnight the feeling changes from "it won't last" to "it will go on forever, and now we can afford to do anything we want."

In stage two people revel in expanding their life choices. Indeed, greatly enhanced personal choice is the hallmark of this second stage, and people relish their new freedom to choose careers and lifestyles in accord with their individual bent, not in conformity to the expectations of others or as a concession to economic constraints.

In this stage of the affluence effect, the quest for self-expression and self-fulfillment grows less inhibited. People assume that only when they feel (and are) well-off economically can they start to live for today and for their own self-satisfaction, on the assumption that tomorrow things will take care of themselves.

Stage two came to Japan later than to the other industrialized democracies and so can be seen most clearly there. By the late 1980s the Japanese began to show familiar signs of the second stage. Especially pronounced were the following:

--A rising level of individualism and less conformity (for example, a shift away from group travel to individual travel to enjoy life and "invest in myself");

--A tendency to take affluence for granted and to spend freely and carelessly;

--An increase in live-for-today, short-term satisfaction;

-- A decline in the willingness of people to sacrifice for their children; and|

--A willingness to be more venturesome and take more risks in their personal lives.[1]

The third stage, fear of the loss of affluence, a painful adaptation to the unexpected economic reality that one can no longer take affluence for granted, also arrives abruptly. People begin to feel cornered and disoriented. They realize they had better begin to think about tomorrow once again. They grow apprehensive that opportunities for jobs, income growth, home ownership, higher education for their children, and retirement are at risk. My firm's research shows that the United States moved squarely into this third stage in the two years preceding the 1992 presidential election. Indeed, the results of that election are best understood in the context of the economic anxieties generated by this third stage, anxieties far exceeding those associated with an ordinary economic recession.[2]

Americans in all walks of life are now adjusting their expectations downward and adapting to what they see as a more difficult, less open, less fair, more demanding, and more stressful economic environment.

How the Affluence Effect Changes Values

In his book, Life Chances, sociologist Ralf Dahrendorf presents a historical context for understanding how the affluence effect influences cultural values.[3] Dahrendorf sees all historic shifts in Western culture as efforts to balance choices and bonds. Choices enhance individualism and personal freedom; bonds strengthen social cohesiveness and stability. In societies where the bonds that link people to one another and to institutions are rigid, the individual's freedom of choice is limited. As people struggle to enlarge their sphere of choice, the bonds that bind them together slacken.

The tension between bonds and choices characterizes the evolution of American cultural values in the post-World War II period. Driven by the affluence effect, the quest for greater individual choice clashed directly with the obligations and social norms that held families and communities together in earlier years. People came to feel that questions of how to live and with whom to live were a matter of individual choice not to be governed by restrictive norms. As a nation, we came to experience the bonds to marriage, family, children, job, community, and country as constraints that were no longer necessary. Commitments were loosened. We witnessed an explosion of divorces, single households, latchkey children, children born out of wedlock, job changes, second careers, dropping out of school, returning to school, and restless moving about from place to place.[4]

Gradually, as the affluence effect evolved, Americans began to shape a synthesis between expanded choice and the need for enduring commitments. The young affluent Americans on the leading edge of this trend learned that total freedom of choice undermines the bonds that give personal relationships, the family, the community, and the nation their meaning and stability.

People do learn from experience, and as they do, they modify their values. Americans have learned a great deal from their bruising encounter with new self-expressive values. They learned, for example, that their expanded life choices created time stress and mounting financial debt that suddenly grew frightening when they became concerned about their economic prospects.

Many have also learned that the world of work can be less satisfying and less secure than they assumed, and that giving too much to work and career can undermine family and quality of life, especially in an economic climate in which loyalty is a one-way affair (the employer expects it but does not give it in return).

The quest for greater self-expression, Americans have learned, can take a heavy toll on personal relationships. Children suffer. Families are at risk. Relationships between men and women grow distressingly complex and often unstable. People's powerful needs for affiliation become frustrated, and some forms of pleasure seeking prove deeply unsatisfying.

This learning experience does not mean that Americans are returning to traditional marriages and families, to older definitions of status and success, to social conformity and togetherness. They are not. They are inventing distinctive blends of bonds and choices, shaping novel patterns of culture.

The affluence effect is like one of the consequences that eating the apple had for Adam and Eve. After the apple, Adam and Eve were never able to return to their previous state of innocence. The taste of freedom from traditional bonds apparently has a similar powerful effect. So strong is the appeal of greater freedom to express one's individuality that, once experienced, people find it very difficult to return to a more constricted world. Thus, even the combination of lowered economic expectations and the bitter learning experiences associated with the new values are not enough to cause people to go back to a traditional world of close but restrictive bonds. The struggle to retain as much self-expressive freedom as possible, whatever the economic circumstances, is a striking feature of the affluence effect.

Outside the United States in the other industrial democracies, similar cultural changes are occurring in less extreme form: a reaction against the constraints of traditional bonds followed by a striving for a synthesis that will retain some traditional bonds while leaving plenty of room for greater individual choice, whatever the ups and downs of the economy. In each culture, the pattern takes a distinctive form, reflecting the history, institutional structure, and material conditions peculiar to it. But in all advanced industrial democracies today, the tension generated by the affluence effect underlies the churning, groping, restless, nervous energy of modern industrial democracy.

 

Summary of Value Changes

The following list summarizes the American values that have changed in recent years:

This enumeration is far from complete, but it does suggest the breadth of change. Some of these changes are so extensive that they virtually reverse previously held values. For example, social conformity and respectability were once the norm of the land, but individualism and choice of lifestyle are now the norm. The almost universal rule of marriage once revolved around sharply differentiated roles for men and women. Now roles have blurred, and a different conception of marriage has taken hold among most Americans.

 

America's Core Values

Before documenting specific areas of changed values, I want to emphasize that all American values have not changed. Despite the affluence effect and other agents of change, many of America's most important traditional values have remained firm and constant.

Since the focus of this paper is on changing values, I will keep my inventory of the values that have not changed brie£ The list that follows is a familiar one, but mere familiarity should not blind us to the importance of the fact that while many traditional values are in upheaval, a small number continue to win the allegiance of most Americans.

The unchanged values are the following:

Each one of these values has a rich and complex heritage that is not captured by its mere mention. Despite the transformations in America's lifestyles, these core values have endured. Virtually all Americans share them; compositely, they make American culture distinctive. The United States is a nation of immense diversity -- geographically, ethnically, economically, politically. And yet, this tiny cluster of values holds Americans together as a single people and nation. They are the unum in the national motto, e pluribus unum -- the unity amid the variety of American life.

Introduction " Overview " Truth and Relevance " Major Changes in Values " Conclusion

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