Source Wikipedia

"This diagram shows Maslow's hierarchy of needs, represented as a pyramid with the more primitive needs at the bottom.

Maslow's hierarchy of needs is often depicted as a pyramid consisting of five levels: the four lower levels are grouped together as being associated with Physiological needs, while the top level is termed growth needs associated with psychological needs. Deficiency needs must be met first. Once these are met, seeking to satisfy growth needs drives personal growth. The higher needs in this hierarchy only come into focus when the lower needs in the pyramid are satisfied. Once an individual has moved upwards to the next level, needs in the lower level will no longer be prioritized. If a lower set of needs is no longer being met, the individual will temporarily re-prioritize those needs by focusing attention on the unfulfilled needs, but will not permanently regress to the lower level . For instance, a businessman at the esteem level who is diagnosed with cancer will spend a great deal of time concentrating on his health (physiological needs), but will continue to value his work performance (esteem needs) and will likely return to work during periods of remission."

I gave the basic philosophy first so that you will understand the subsequent points that I make. As stated above the pyramid is narrow at the top as physiological needs are greater in number than psychological needs. Though the point made in the write up states that the only element that caters to psychological needs is the fifth need of self actualization, the psychological content increases at every stage up the hierarchy. Thus historically a large proportion of the middle class in the United States have moved up the hierarchy with most straddling between esteem and self actualization. This is because as a society gets richer and the people move up the economic scale, they also move up the hierarchy of needs curve.

Now America is faced with the prospect of not going up the needs curve but going down as prices rise and incomes remain stationary or go down for the middle classes. Maslow considers this movement down the curve, temporary, but in the case of many in America this shift from middle class status, with the ballooning prices of food and of gas in the last few years with practically stationary real incomes(for the middle class) during the Bush years, this movement down seems to have some permanancy, unless something drastic is done. People accept the phenomenon of rising needs, with rising prosperity. But, falling prosperity with a huge increase in prices, can have a real destabilizing effect on the psyche of a population.

In the last eight years, the Bush years, real incomes of the middle class have fallen. The oil shocks and food price rises of 2007-2008 have grossly exacerbated an already difficult situation. With the current oil shocks travel, even travel to and from one's place of work has become onerous: Please see my blog:

The Tipping Point on Oil is Here and Now

girdhargopal.sulekha.com/blog/post/2008/06/the-tipping-point-on-oil-is-here-and-now.htm

These recent shocks juxtaposed to stationary if not falling incomes and real increases in large ticket expenditures as gas for cars and food on the table, have made people move DOWN Maslow's hierarchy of needs curve. These decreases in availability and increases in prices of food and oil, are resulting in these two items, forming a steadily increasing part of the budgets of the middle classes and the poor. Further because of the secondary increases in other prices impacted by the oil price increase, there is pressure upwards in consumer prices.

Particularly the middle classes who were happily going up the curve towards self actalization, with NO contemplated movements downwards, are now being violently shoved down the curve. This will have untold effects on the psyches of such sections. In less stable societies it will be a prescription for disaster, but the US will cope as it has a political safety valve in the form of elections and institutions that protect the individual.

India is facing the self same challenge, with a fractured middle class. One a part of the traditional economy: civil servants, the academe, local industries etc. This middle class has incomes that are justified by prices that this old economy can support. There is another thrusting middle class which successfully operate in a globalized context, and as it is generally service oriented, incomes here are determined by what their salaries will be in a multi-national context and standard. Thus in this globalized middle class incomes are several fold higher than the domestic middle class . Below these is a huge underclass that operates on next
to nothing. This domestic middle class and the underclass are facing the very uncertain times with the cost of living rising on a steep gradient, keeping up to the wants and price points determined by the prosperous globalized middle class. For more detailed treatment of this dilemma please read my blog:
Straws in the Wind Looming Over India
girdhargopal.sulekha.com/blog/post/2008/05/straws-in-the-wind-looming-over-india.htm


The movement of the middle class(dependent on the local economy) down the hierarchy of needs, is dangerous indeed for India's stability. The proportion of the total population out of the prosperous global economy is about 2/3rd. The government should work to re-distribute a part of the wealth by doing economic projects in the non global economy, so that the lot of the so called common man is bettered. The global sector should be made to realize that paying taxes to do this, is good for them as it is good for India.