No, most people's desires are limited

by Martin Auer

Economics textbooks like to explain the basic problem of economics like this: The means available to people are limited, but people's desires are unlimited. That it is human nature to want more and more is generally a widely held belief. But is it true? If it were true, it would present a major hurdle to using the resources the planet gives us in a sustainable manner.

You have to distinguish between wants and needs. There are also basic needs that need to be satisfied over and over again, such as eating and drinking. While these can never be fully satisfied as long as a person is alive, they do not require one to accumulate more and more of it. It is similar with the needs for clothing, shelter, etc., where goods have to be replaced again and again as they wear out. But having unlimited desires means wanting to accumulate and consume more and more goods.

Psychologists Paul G. Bain and Renate Bongiorno from the University of Bath in Great Britain have conducted an experiment [1] conducted to shed more light on the issue. They examined how much money people in 33 countries on 6 continents would want in order to be able to lead the “absolutely ideal” life. The respondents should imagine that they could choose between different lotteries with different amounts of prize money. Winning the lottery does not entail any obligations of gratitude, professional or business obligations or responsibilities. For most people, winning the lottery is the best path to wealth they can imagine for themselves. The prize pools of the various lotteries started at $10.000 and increased tenfold each time, i.e. $100.000, $1 million and so on up to $100 billion. Every lottery should have the same odds of winning, so winning $100 billion should be just as likely as winning $10.000. The assumption of the scientists was that people whose desires are unlimited would want as much money as possible, i.e. they would opt for the highest profit opportunity. All others who chose a lesser win would clearly have to have limited desires. The result should astonish the authors of economics textbooks: only a minority wanted to get as much money as possible, between 8 and 39 percent depending on the country. In 86 percent of countries, a majority of people believed that they could live their absolute ideal life on $10 million or less, and in some countries, $100 million or less would do for the majority of respondents. Amounts between 10 million and XNUMX billion were in little demand. This means that people either decided on a - relatively - modest amount or they wanted everything. For the researchers, this meant they could divide the respondents into the “insatiable” and those with limited desires. The proportion of "voracious" was about the same in economically "developed" and "less developed" countries. "Insatiables" were more likely to be found among younger people living in cities. But the relationship between the “voracious” and those with limited desires did not differ according to gender, social class, education or political leanings. Some of the "voracious" said they wanted to use their wealth to solve social problems, but the majority of both groups wanted to use the profits only for themselves, their family and friends. 

$1 million to $10 million—the range in which most respondents could live their absolutely ideal life—is considered wealth, especially in poorer countries. But that wouldn't be excessive wealth by Western standards. In some areas of New York or London, a million dollars wouldn't buy a family home, and a fortune of $10 million is less than the annual income of the top executives of the 350 largest US companies, which is between $14 million and $17 million. 

The realization that the desires of the majority of people are by no means insatiable has far-reaching consequences. An important point is that people often do not act on their own beliefs, but on what they assume is the belief of the majority. According to the authors, when people know that it is “normal” to have limited desires, they are less susceptible to the constant stimuli to consume more. Another point is that a key argument for the ideology of unlimited economic growth is invalidated. On the other hand, this insight can lend more weight to arguments for a tax on the wealthy. A tax on wealth over $10 million would not limit most people's "absolutely ideal" lifestyle. The realization that most people's desires are limited should give us courage if we want to advocate more sustainability in all areas of life.

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[1] Source: Bain, PG, Bongiorno, R. Evidence from 33 countries challenges the assumption of unlimited wants. Nat Sustain 5:669-673 (2022).
https://www.nature.com/articles/s41893-022-00902-y