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Capitalism’s Dependence on Endless Consuming

Let’s begin by taking a long view back to the emergence of the Industrial Revolution. The Industrial Revolution of the 19th century greatly increased the number of goods and services available to the world’s population.  The steam engine, railroads, new machinery and factories, and improved agriculture greatly increased the economy’s productive capacity.  More production inevitably s more consumption. More consumption led to more investment. More investment increased production in an ever expanding world of goods.

Citizens delighted in the availability of more goods and choices.  They could individualize their personalities through their choices of food, clothing and shelter.  They could shop endlessly and marvel at the innovative offerings of the producers. Citizens increasingly turned into consumers. Consuming became a lifestyle and culture.  Producers profited greatly from the increasing number of active consumers. 

Producers were eager to stimulate more demand and more consumption. They turned to print advertising and sales calls, and as new media arose, they turned to telephone marketing, radio marketing, TV marketing, and Internet marketing.  Business firms would profit from the degree they could expand consumer desire and purchasing.

From the beginning, some onlookers had misgivings about the rise of consumerism.  Many religious leaders saw the growing interest of citizens in material goods as competing with religious attention and spiritual values.  The legacy of puritanical values kept certain population groups from acquiring too many goods and getting into too much debt.  Some citizens were particularly critical of wealthy consumers who used goods to flaunt their wealth. The economist Thorsten Veblen was the first to write about “conspicuous consumption” that he saw as a malady taking people away from more meditative life styles.  In The Theory of the Leisure Class, Veblen exposed this sickness of status display.  Had he lived long enough, he would have been aghast at the news that the former first lady of the Philippines, Imelda Marcos, owned 3,000 pairs of shoes that languished in storage since her exile from the Philippines.

The Growing Number of Anti-Consumerists

There are signs today of a growing anti-consuming movement. We can distinguish at least five types of anti-consumerists.

First, a number of consumers are becoming life simplifiers, persons who want to eat less and buy less.  They are reacting to the clutter of “stuff”.  They want to downsize their possessions, many of which lie around unused and unnecessary.  Some life-simplifiers are less interested in owning goods such as cars or even homes; they prefer renting to buying and owning.

Second, another group consists of degrowth activists who feel that too much time and effort are going into consuming.  This feeling is captured in William Wordworth’s poem,

“The world is too much with us…

Getting and spending, we lay waste our powers:

Little we see in Nature that is ours;

We have given our hearts away, a sordid boon!”

Degrowth activists worry that consumption will outpace the carrying capacity of the earth.  In 1970, the world population was 3.7 billion.  By 2011, the world population grew to 7.0 billion.  Today (2020) the world population stands at 7.7 billion.  The U.N. expects the world population to grow to 9.8 billion by 2050.  The nightmare would be that the earth cannot feed so many people.  The amount of arable land is limited and the top soil is getting poorer.  Several parts of our oceans are dead zones with no living marine life.  Degrowth activists call for conservation and reducing our material needs.  They worry about the people in the emerging poor nations aspiring to achieve the same standard of living found in advanced countries, something that is not possible.  They see greedy producers doing their best to create “false and unsustainable needs.”

Third, another group consists of climate activists who worry about the harm and risk that high buying consumers are doing to our planet through generating so much carbon footprints that pollute our air and water.  Climate activists carry a strong respect for nature and science and have genuine concerns about the future of our planet.

Fourth, there are sane food choosers who have turned into vegetarians and vegans.  They are upset with how we kill animals to get our food.  Everyone could eat well and nutritiously on a plant, vegetable and fruit diet. Livestock managers fatten up their cows and chickens to grow fast, and then kill them to sell animal parts in the pursuit of profits.  Meanwhile cows are a major emitter of methane that heats our earth and leads to higher temperatures, faster glacial melting, and flooding of cities.  To produce one kilogram of beef, requires between 15,000 and 20,000 liters of water as well as so much roughage to feed the animals.

Fifth, we hear about conservation activists who plead not to destroy existing goods but to reuse, repair, redecorate them or give them to needy people. Conservationists want companies to develop better and fewer goods that last longer.  They criticize a company such as Zara that every two weeks produces a new set of women’s clothing styles that would only be available for two weeks.  Conservationists oppose any acts of planned obsolescence.  They are hostile to the luxury goods industry.  Many are environmentalists and anti-globalists.

The anti-consumerism movement has produced a growing literature.  One major critic is Naomi Klein with her books No Logo, This Changes Everything, and The Shock Doctrine.   Also see the documentary film The Corporation by Mark Achbar and Jennifer Abbott.

How Businesses Sustain the Consumer Sentiment

Business firms have an intrinsic interest in endlessly expanding consumption for the purpose of higher profits.  They rely on three disciplines to boost consumption and brand preference.  The first is innovation to produce attractive new products and brands to enchant customer interest and purchase.  The second is marketing that supplies the tools to reach consumers and motivate and facilitate their purchasing.  The third discipline is credit to enable people to buy more than they could normally buy on their low incomes.  Businesses aim to make consumption our way of life.  To keep their productive equipment and factories going, they must ritualize some consumer behavior.  Holidays like Halloween, Christmas, Easter, Mother’s Day, and Father’s Day are partly promoted to stimulate more purchasing.

Businesses want not only purchase of their goods but fast consumption so that objects burn up, wear out, and are discarded at an ever-increasing rate.

Businesses use advertising to create a hyper-real world of must-have products that claim to deliver happiness and well-being.  Businesses refashion commodities into compelling brands that can bring meaning into the consumer’s life.  One’s brand choices send a signal of who the person is and what he or she values.  Brands bring strangers together to share carefully designed images and meanings.

How Will Anti-Consumerism Change Capitalism   

Capitalism is an economic system devoted to continuous and unending growth.  It makes two assumptions:  (1) people have an unlimited appetite for more and more goods and (2) the earth has unlimited resources to support unlimited growth.  Both of these are now questioned. First, many people become jaded and satiated by the effort to continuously consume more goods. Second, the earth’s resources are finite, not infinite, and could not meet the needs of a growing world population that comes with growing material needs.

Until now, most countries have used only one measure to assess the performance of their economy.  That measure is the Gross Domestic Product (GDP).  GDP measures the total value of the goods and services produced in a given year by the country’s economy.  What it doesn’t measure is whether GDP growth has been accompanied by a growth in people’s well-being or happiness.

We can imagine a case where GDP grows by 2 or 3 percent by workers working very hard and even at overtime.  They only have two weeks of vacation a year. They have little time for leisure or renewal.  They might be stressed by unexpected medical bills that hit their savings.  They might be unable to send their children to college, leaving their children with lower skills and lower earning potential.  Those students who manage to go to college graduate with huge debt. Graduates are carrying a college debt of $1.2 trillion. They cannot buy furniture or a home, or even afford to get married.  In such a case, we would guess that GDP went up but the nation’s average well-being and happiness went down.

We badly need to add new measures of the impact of economic growth. Some countries are now preparing an annual measure of Gross Domestic Happiness (GDH) or Gross Domestic Well-Being (GDW).  We know that citizens in Scandinavian countries enjoy a substantially higher level of happiness and well-being than American citizens and run good economies.  Is our addiction to consuming, consuming us?

Part of the problem of economic growth is that the fruits of gains in productivity are not shared equitably.  This is obvious in a country with a growing number of billionaires and a great number of poor workers.  Many CEOs are paid 300 times what their average worker earns, and some take home as much as 1100 times the average worker.  The economic system is rigged.  Corporations have succeeded in emasculating trade unions and leaving workers with no say in what they or their bosses should be paid.

Even some billionaires are unhappy with this greatly lopsided pay arrangement.  Bill Gates and Warren Buffet have publicly called for raising the top income tax rate.  This top rate is now down to 37 percent as a result of the 2018 Tax Reform.  Meanwhile wealthy citizens in Scandinavian countries pay 70 percent and manage to run a good economy, one with free health care and free college education.  One citizen billionaire, Nick Hanauer has spoken about this on TED. He warns his fellow billionaires that “the pitchforks are coming.”  He pleads with them to pay higher wages and taxes and share more of the productivity gains with the working class. The working class should earn enough to eat well, pay rent, and retire with adequate savings.  Today there are too many workers who couldn’t muster $400 to pay for a pressing payment they must make.

Excerpted from The Consumer in the Age of Coronavirus by Phillip Kotler