I’m reading through a friend’s essay on Bourdieu’s notion of “capital” as compared to Marx’s, and the idea of “necessities” came up. The necessary is a funny concept in economics – modern economists avoid it like the plague, while earlier economic thinkers (Smith, Marx) referred to it explicitly but attempted somewhat to relativize and historicize it. This subtlety is often obscured in contemporary readings of these authors, especially Smith. Here’s a large-ish quote from the Wealth of Nations:
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France they are necessaries neither to men nor to women, the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people. (Book V Ch. 2)
Historical accuracy aside, Smith clearly has a strongly historical and cultural understanding of “necessary” – in rejection of a biological and ahistorical explanation of necessity. That historicity and cultural specificity of necessaries may explain why modern economics abandoned the notion. Unfortunately, in abandoning the question, economists also abandoned the discussion of why the necessities of today are understood as necessary. To be a certain kind of actor, a certain kind of person, requires certain props or tools. Giving up on a necessity means abandoning a certain idea – be it a class position or something more local and contingent.
The title of this post is a bit of a play on words. While economists have argued that there are no necessities, only wants of varying strengths (and thus there is nothing necessary about necessities), I would argue that necessities are historically contingent and thus unnecessary in that strange sense. Given that they are “unnecessary”, we ought to ask how they came to be – but first we have to remember that they do, indeed, exist.
A (Budding) Sociologist's Commonplace Book 
Graham Peterson
/ October 28, 2010You’re dead on that economists avoid concepts like “need” and “afford.” But you will still find economic literature littered with the phrases — the more economics you read the more you realize how not-strictly-neoclassical most economists are.
That aside, you’re dead on. Economists do recognize only a universe of varying wants with different strengths. But it is not because of the old notion of an economic actor irreverent to historical context who maximizes utility based on a present situation choice set only. It is because we have a decent way of modeling need.
Things for which there is a low income-elasticity of demand are what we would informally call needs. An elasticity measures the degree to which a change in price of a good affects its consumption. So a good that is really sensitive to price is elastic — if the price of novelty post cards shoots up, I will buy much less of them because the expenditure would take up a larger portion of my income. But if the price of food or rent shoots up, I will not consume less food or rent, regardless that they are now taking up a larger percentage of my income. I will bear the higher price and sacrifice other goods for which my income elasticity of demand is greater (read that I don’t need as much).
Need invokes the idea that there are goods for which the income elasticity of demand is 0 (for reference: a good is inelastic [yes we actually calculate a number using empirical methods here] if its elasticity is between 0 and 1 — above 1 and it is inelastic, we don’t need it as much so are highly sensitive to its price change, will consume much less of it if price changes just a little). When income elasticity is 0, someone will consume the exact same amount of it no matter how expensive it is.
Since in economics we see any sacrifice in utility as a cost, something that is so above described inelastic that someone will bear infinite costs to attain it is impossible. Will you sacrifice positive utility goods like sex, love, friendship, and sleep for an apartment when rents shoot through the roof so high you must spend 24 hours a day working? No.
The distinction between wants and needs is an argument of degree, not of kind (if you prefer an argument from the humanities, informed by Aristotles rhetoric).
There are substitutes in the world. There is little substitute for food, but there are myriad substitutes for ways to go about feeding yourself — each of those ways imposing a different cost, either of monetary income, or more generally let’s say utility income afforded by a budget of time and life-experiences in a day. When the price of a need like food goes up, people have for millions of years and will continue to find a new way through innovation and technological improvement, hell even cooperation, dare I invoke sociology’s panacea, to get food.
There is nothing wrong with calling things needs. But if you want to model what a need is formally, if you want to understand the social forces that act on an inert material object to deem it a need v. a want, you have to do so on a scale-less index. For that we have things like elasticity and the concept of a substitute.
Dan Hirschman
/ October 29, 2010I’m aware of how economists model income elasticities, and thus how they avoid talking about needs. What I want to argue that in so-doing, they miss a lot of the flavor of the lived experience of economic life. Sure, you can model anything in terms of elasticities… but you can’t see the qualitative break where some groups see an item as a necessity, others as a luxury, and others as an extravagance. To be a homeowner, you have to own a home. To be a cutting edge sociologist, you need a shiny new Macbook Pro and a fancy digital voice recorder. But to be a sociology undergrad, the voice recorder might be a luxury. And so on. Our identities and our tools are wrapped up together in very discontinuous ways, and the actor (or emic) category of “need” is an important one to pay attention to.
Graham Peterson
/ October 29, 2010I’m not suggesting we abandon the colloquial logic of a need v. a luxury. A world with everyone walking around, notebook and calculator in hand, talking about the income elasticity of their needs for things, is a terrible world. To boot, transaction cost economics shows us that that world doesn’t exist because it makes for clumsy discourse, raising the costs of trades, and hence less trades would happen (trades of ideas or refrigerators — whichever you prefer).
Ultimately what is important is that economists are able to account for all utilities and qualitative measures that make up an income elasticity of demand for something, and on the other hand that sociologists and poly scis are able to recognize the supreme substitutability of things and respect the honest attempt of economists to model needs mathematically.
Economists do often miss the flavor of lived experience of economic life because by their own admission things like utility are extremely difficult to measure. But that does not mean that the theoretical basis of income elasticity of demand or any other quantitative model is summarily defunct and inept. Nor does it mean that anyone should stop trying to model needs quantitatively, incorporating further things like social context and emotion.
Graham Peterson
/ October 28, 2010CORRECTION:
above 1 and it is ELASTIC, we don’t need it as much so are highly sensitive to its price change, will consume much less of it if price changes just a little)
Benjamin Mitra-Kahn
/ November 1, 2010Your post, an especially the quote, reminded me of an earlier Smith reference to necessities, which the current debate over income redistribution might want to consider.
Benjamin Mitra-Kahn
/ November 1, 2010Gah… Tried to use the html codes at the bottom and failed. Here be the quote, from the Theory of Moral Sentiments:
“The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity… they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made, had the earth been divided into equal portions among all its inhabitants.”
-Adam Smith (1759: IV.i.10)