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The World Needs Consuming
By JLP | December 15, 2008
In the thought-provoking New York Times article Talk is Cheap, the author argues that the “new frugality” trend is more or less bogus.
Yes, household-debt loads have contracted a bit, but it’s probably not a coincidence that access to debt has contracted, too. And although there is news that some of us are going without luxury goods, there is also news that others are going without fulfilling our doctors’ prescriptions. At this stage, the evident hesitation to spend seems more like a function of fear than of frugality.
I can’t argue with that. The following insight is more troubling:
Somehow the normal of hyperconsumption persisted despite the collapse of the Internet bubble, the vulnerability exposed on 9/11, two wars and stagnant wages. Through it all, consumer spending hardly wavered, the personal savings rate plummeted and personal debt mounted. We were told our willingness to spend more — on fair-trade coffee, eco-friendly totes, organic dog food — demonstrated a fresh consumer sophistication that would change the marketplace.
Yes, it’s true. And it won’t – can’t – change. Our survival as a society now depends on the Consumer doing his job – consuming. We all realize on some level that if everybody simultaneously started being responsible – saving 15% of their income, buying houses they could afford, eschewing consumer debt, and generally not buying useless crap 300 days out of the year – then we’d all be simultaneously screwed.
We spend half our lives working like busy hamsters at the wheel, helping companies create things to consume. Then we spend another big chunk of our lives absorbing media messages which teach us how – and why – to comsume them. Occassionally we eat and sleep and make love and talk to our kids. But if everybody quit consuming so much, businesses would fail in droves, and workers would be laid off in droves. And what on earth would we all do all day?
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Topics: Miscellaneous | 8 Comments »
December 15th, 2008 at 5:52 pm
I work retail and yeah, at time I feel conflicted. I see customers split a purchase between two or three different credit cards ’cause they’re all close to the limit and it makes me sad. I just want to tell them, “No, you don’t need this. A month from now, you’ll never use it and you’ll forget you ever bought it.”
Then again, my bonus depends on thoughtless spending so a part of me is all about customers spending beyond their limit.
December 15th, 2008 at 7:03 pm
It’s because we’re “too productive”. The basic needs of our society can be met by a small proportion of the total labour available. Therefore people generally have tons of free time to buy and produce other things. If they didn’t have the time then we just wouldn’t have as many ipods and Wiis.
The big problem is credit. Credit amplifies everything, including consumer spending. That is a kind of fake demand caused simply by the availability of credit. It’s my personal opinion that consumer credit ought to be illegal like dangerous drugs or driving without a seatbelt. At the very least, a person should be able to walk away from a credit card without losing any ability to qualify for mortgages, car loans, or other big loans.
Think about it: People regularly take out loans to go out for dinner or watch a movie. It is unreasonable for a person to lose their house over a dinner loan or even a giant series of dinner loans.
We could also create valuable demand by requiring companies to preserve the environment. Then there would be giant efforts and brainpower driven towards environmental technology diverted from creating the 1500th different model of cell phone.
December 15th, 2008 at 9:29 pm
What on earth would we do all day? Perhaps: Eliminate world hunger, eradicate preventable diseases, increase literacy (hopefully, financial literacy as well), pray more, and enjoy more family/leisure/vacation time?
December 16th, 2008 at 2:26 am
I saw a hilarious editorial cartoon today by “Toles” (I have no idea who he is).
In the first panel, an economist (E1) tells a consumer to take his hands out of his pockets and spend. A second economist (E2) then chimes in, telling the consumer (who has now taken a credit card out of his pocket) not to use it – that’s how we got into this mess!.
(E1): No, no, no, if you don’t spend, we’ll go into a depression!
(E2): If we do go into a depression, you’ll need savings, so it’s imperative to save, save, save.
Ultimately, the consumer is spinning wildly, and the economists agree: I THINK WE HAVE ACHIEVED A TURNAROUND.
December 16th, 2008 at 7:04 am
“And it won’t – can’t – change.”
While I don’t agree with your overall embrace of the virtue of consumerism, and I don’t know exactly in which direction we should head, I can guarantee that your certainty evinced by the above quote is 100% wrong. It most definitely can, and will, change. And it probably won’t destroy our society in the process – it’s proven pretty resilient over the centuries.
December 16th, 2008 at 8:42 am
Sorry goalhunter but I don’t think that we are “too productive”, I really don’t see that as a problem. The problems come from the government and taxpayer trying to support failing industries and companies. Yes the companies will fail and people will go out of work and that industry will suffer. However, at the same time it will create industry somewhere else and over time will recover and be stronger than before.
I don’t see why we keep fighting to keep everything that has obviously failed at this point.
December 16th, 2008 at 2:45 pm
I enjoy reading your blog, but this idea that we need to keep consuming is deflating and depressing. In this article, you basically describe the rat race that is our economy–work to consume, consume to work. Then you go on to say that if we stopped doing this, we would be doomed. What a gloomy outlook.
I think a couple other commenters have it right; we can change and it would likely make us better off by allowing us to focus not only on consuming “things” but on enjoying life. Progress is nice, but over-consumption and the stress that comes with it is silly.
December 17th, 2008 at 2:01 pm
The issue is not that consumers are cutting back to avoid debt. Yes, consumers need to spend within their means. Yet, as said, it is when consumers who have extra money cut back just due to the fear media about what could happen, then stops spending all together and creates what the media predicts.