Jason Wong

February 2024

Consumerism refers to the consumer ideology of Western society, which revolves around a social and economic structure in which we, as customers are encouraged to buy anything, regardless of whether we need it. Such consumer desires are more often driven by lifestyle obsession rather than a requirement, giving us a sense of happiness and fulfillment through material possession.

Businesses increase production to introduce new products to the market regularly. They then create demand for these offerings through manipulative advertising. The urge among consumers to try these products makes us spend more on mindless consumption. Eventually, this increased consumer spending lets brands earn profits and fuels the economic growth of a nation. It is often referred to as a consumerist movement, as it strives to safeguard consumer rights from over-marketing.

As such, consumerism is a cultural model that promotes the acquisition of goods, and especially the purchase of goods, as a vehicle for personal satisfaction and economic stimulation.

Consumerism is often confused with capitalism, but the latter is an economic system, while the former is a pervasive cultural attitude. A model combining the two is sometimes referred to as consumer capitalism, a system in which consumer demand for goods is deliberately increased through manipulation as a means of increasing sales. The model relies on stimulating consumer desire for goods far in excess of satisfying needs. Mechanisms to do so include promotion of luxury items, new technologies and new models of existing technologies.

Built-in obsolescence is another method of increasing the sale of goods. Planned obsolescence (as it is also known) is an approach to the conception, design and production of a product, such as hardware or software, involving the intent that it should be useful, functional or popular for only a limited length of time. For many in a consumer culture, a functioning smartphone is not adequate: If a new iPhone model is released, we feel compelled to purchase it.

Financial mechanisms have also encouraged consumerism. The advent of credit cards allowed us to spend money that we did not have; debit cards gave us quick access to more money than we were currently carrying and often the option of overdraft, as well.

Although consumer culture is still prevalent, some critics believe that environmental issues render it unsustainable. Alternative models that have arisen, which include collaborative consumption and the Circular Economy, emphasize maximizing the efficient use of materials and having access to products and services over private ownership.

Consumerism was further developed in the 20th century.  For example, some people considered the 1950s and 1960s as the ‘golden age of consumerism’.  During this time period, goods became much less expensive, and some products were able to sell on a very large scale due to effective marketing campaigns.  In general, marketing refers to the advertisements that companies produce to sell their products to a large audience.

Marketing had always been a popular method of selling a good, but the marketing campaigns of the 20th century became much more sophisticated.  For example, many of these campaigns promoted a sense of identity in relation to their products and caused people to associate their social standing in society with their level and quality of consumption.  This caused an explosion in modern consumption rates, as marketing is still an important consumerist tool in the 21st century. A 30-second commercial in the televised Superbowl this month costs US$7million.

Another important aspect of consumerism in recent years has been the concept of outsourcing.  In general, outsourcing is when companies in western countries such as the United States and Canada send their manufacturing to other countries such as Mexico and China.  Companies do this to lower the overall cost of wages when developing a product because workers in countries like China and Mexico will work for much smaller wages than similar workers in the United States and Canada.

Outsourcing as a concept became popular throughout North America and Europe in the 1980s and still continues today.  It is a very controversial process because some people view it as positive while others view it as negative.  Those of us who view outsourcing in a positive light think that it keeps the cost of goods low and helps companies remain prosperous in a competitive economy.  Whereas those who view it negatively think that outsourcing has caused a loss of manufacturing jobs throughout North America and Europe. In addition, goods are being produced by a ‘slave market’ of sorts in some countries. There are books written about how forced labour of production currently exists in the North-western Province of China off the backs of Uyghurs and Kazakhs in concentration camps (e.g. The Chief Witness by Sayragul Sauytbay Alexandra Cavelius and Made in China by Amelia Pang).

Regardless, outsourcing helped to intensify consumerism throughout the world.  First, it kept the cost of many goods low, which allowed more mass production and distribution of consumer goods.  Second, it caused other countries, such as China and Mexico, todevelop their own consumerist societies which furthered the rate of consumerism on a global scale.

Today, consumerism continues to intensify with influential marketing campaigns, outsourcing, and a cheap and steady supply of both resources and goods.

Many economists who accept some version of the theory of consumerism are also materialists in the sense that they believe that possessing and using consumer goods are necessary for individual happiness and well-being – a most hedonistic approach.

In contrast, with regards to the psychology and behaviour of consumers, consumerism is a shared preoccupation with acquiring consumer goods that do not serve a genuine need or want, sometimes with the conscious (or unconscious) aim of projecting an elevated social status—a phenomenon that the American economist Thorstein Veblen identified as “conspicuous consumption.” (more about it later).

The symptoms of excessive consumerism

So, do we think we have our consumerism under control? We may still have some work to do if:

  1. We buy more than we planned: if we set out with a plan of what we need to purchase but consistently come back with more than we anticipated, then we’re falling into the consumerist trap (read Costco?).
  2. We run out of storage space for our stuff: sometimes it can’t be helped if we live in a tight area or we’re disorganised. But suppose we’re in a reasonable situation and things we bring in don’t have an allocated home. In that case, we’re likely living excessively. For those of us with a garage, is it used for vehicles or for stuff?
  3. We rely too much on return policies: returning an item is useful. Particularly if we need to test a product for the intended purpose, be it sizing for clothes or a tool for a building project. However, suppose we’re depending on returns for purchases. In that instance, we’re not sure if we need it, or if we can’t afford it, then we’re probably suffering from too much consumerism. Again, Costco’s return policy comes to mind.
  4. We routinely seek approval for our purchases: getting feedback on purchases can be reassuring, especially if we’re indecisive. Yet, there’s a difference between picking someone’s brain before buying and looking to justify our
  5. purchase after the fact. If we’re seeking post-acquisition approval, we probably don’t need the item.
  6. We mistakenly buy things we already have: not much to say here. If we’re getting things only to realise we already have it, then we’re probably deep in a consumerist cycle.
  7. We buy things on credit: if we’re strategic and disciplined, we can buy things on credit cards to acquire points and benefits (which, in themselves, are a marketing strategy). However, if we’re like the majority, then we’re predisposed to buying things we can’t afford.
  8. We constantly go over our budget: sometimes, we mis-forecast how much we need to spend each month. But if we set a realistic budget and find that we’re still going over, then we’re probably consuming excessively.
  9. We regret our purchases: the most obvious sign that we have a retail therapy issue is when we regret things we bought. Buyer’s remorse is an overwhelming feeling and one we want to avoid.
  1. We’re hiding purchases: If we’re hiding purchases from our loved ones, we undoubtedly have some consumerism issues.

Conspicuous Consumption

Conspicuous consumption is the purchase of goods or services for the specific purpose of displaying one’s wealth. Conspicuous consumption is a means to show one’s social status, especially when publicly displayed goods and services are too expensive for other members of a person’s class. This type of consumption is typically associated with the wealthy but can also apply to any economic class.

Points:

  • Conspicuous consumption is a term coined by American economist and sociologist Thorstein Veblen.
  • Conspicuous consumption can be applied to luxury goods that are easily recognisable as high-end, expensive items.
  • Technology, cars, and clothing can all be examples of items related to conspicuous consumption.
  • Conspicuous consumption is often done to show a specific social status or class.
  • While this type of consumption is often associated with wealthy people, anyone from any economic class may be a conspicuous consumer.

Understanding Conspicuous Consumption

The term was coined by American economist and sociologist Thorstein Veblen in his 1889 book, The Theory of the Leisure Class. In his book, Veblen says that the need to consume goods in order to flaunt one’s wealth goes back to the tribal period; although the objects of consumption have changed since then, the concept of flamboyant ownership has essentially remained the same.

This type of consumption was considered a product of the developing middle class during the 19th and 20th centuries. This group had a more significant percentage of disposable income to spend on goods and services that were generally not considered to be necessary.

The concept of consumerism stems from conspicuous consumption.

Conspicuous consumption is exemplified by purchasing goods exclusively designed to serve as symbols of wealth, like luxury-brand labels on clothing, high-tech tools and toys, and vehicles.

There are many theories based on conspicuous consumption, the first was developed by Thorstein Veblen. He claimed that there was a direct relationship between a person’s material possessions and their status in society. The “pecuniary strength” of an individual portrayed honour and esteem in a community. It involved lavish consumption of luxury goods such as jewellery.

Moreover, Veblen claimed the goods consumed by such individuals were wasteful and did not hold any practical useful value to the buyer. He termed consumption of the goods as a conspicuous waste.

In 1967, the theory was developed further by another American economist, James Duesenberry, who first described the “bandwagon” or “demonstration” effect. Duesenberry claimed that people purchased goods and services to preserve their self-esteem and keep up with societal expectations.

Reasons Behind Conspicuous Consumption

Many theories exist as to why people consume conspicuously. Some theorists claim that it is due to the competitive nature of individuals. The ownership of luxurious goods expresses the superiority of the possessors over the non-possessors. Therefore, people compete with each other for ownership of such goods, which causes conspicuous consumption.

Another theory asserts that it is the insecurity of individuals that drives them to consume material items. People use luxury goods to hide their personal insecurities; they believe their material possessions define their public image and mask their shortcomings.

In his book, Veblen claimed that advertising plays a huge role in conspicuous consumption. When a company is advertised as a luxury brand, many people want to associate themselves with its products. This leads to conspicuous consumption as people believe they will achieve a positive self-image when they purchase luxury brand products.

Cultural Influence on Conspicuous Consumption

According to Veblen’s theory, people consume conspicuously for two main reasons – to be recognized by their peers and to achieve a higher social status in society. Both factors are a reflection of the culture and socio-economic class that the consumers reside in.

Conspicuous consumption defines the personal and public perceptions of a person. Societies that give importance to external values are called collectivist cultures. This is because purchase decisions are largely based on the external self and the public image of a person.

According to this theory, an individual will choose products that improve their status in society rather than satisfy their personal needs. Therefore, in a collectivist culture, the main driver of conspicuous consumption is “recognition by others.”

In summary, conspicuous consumption is a theory that is both economic and psychological. The economic conditions that an individual resides in can be a deciding factor as to whether a person decides to conspicuously consume goods or not.

World heading towards 5.6 billion consumers

If everyone lived like western consumers, we would need 5 planets to support us. And the number of consumers is growing by the second. The consumer class will grow from 3.5 billion in 2017 to 5.6 billion by 2030.

A “consumer” is defined as someone able to buy goods and services beyond the satisfaction of basic needs. Specifically, someone having more than US$10 a day to live on – also referred to as middle class.

The negative effects of consumerism include the depletion of natural resources and pollution of the Earth. The way the consumer society is working is not sustainable. We are currently overusing Earth’s natural resources by more than 70 percent. If everyone on earth lived like the average American, we would need 5.2 planets to support us. The number is 3 if everyone lived like the average Japanese and about 3.3 as Europeans. And the number of people in the consumer class is growing.

If Earth’s history is compared to a calendar year, modern human life has existed for 37 minutes, and we have used 33% of Earth’s natural resources in the last 0.2 seconds.

Escaping excessive consumerism

Consider this list of practical benefits for escaping excessive consumerism in our lives:

  1. Less debt

Just under 50%f of Americans are unable to pay off their monthly credit card balance -carrying debt from one month to another. On average, the monthly balance carried forward is $6,929 per household, totaling $420 billion in consumer debt.

  1. Less time caring for possessions

The never-ending need to care for the things we own drains our time and energy. Whether we are maintaining property, fixing vehicles, replacing goods, or cleaning things made of plastic, metal or glass, our life is being emotionally and physically depleted by the care of things we do not need. Surely our lives are too valuable to waste in caring for excess possessions.

  1. Less desire to upscale lifestyle norms

Television and the Internet have brought lifestyle envy into our lives at a level never before experienced in human history. Prior to the advent of the digital age, we were left envying the Joneses living next to us – but at least we had a few things in common with them (such as living in the same neighbourhood). But today’s media, especially X (formerly Twitter) and other kinds of social media, have caused us to envy (and expect) lifestyles well beyond our means.

Only an intentional rejection of excessive consumerism can silence the call to constantly upscale lifestyle norms.

  1. Less environmental impact

Our earth produces enough resources to meet all of our needs, but it does not produce enough resources to meet all of our wants. And whether we consider ourselves an environmentalist or not, it is tough to argue with the fact that consuming more resources than the earth can replenish is not a healthy trend, especially when it is completely unnecessary.

  1. Less need to keep up with evolving trends

Henry David Thoreau once said, “Every generation laughs at the old fashions, but religiously follows the new.”

A culture built on consumption must produce an ever-changing target to keep its participants spending money. And our culture has nearly perfected that practice. Every year (or even season), a new line of fashion is released as the newest, must-have trend. The only way to keep up is to purchase the latest products when they are released.

Of course, another option is to remove ourselves from the pursuit altogether.

  1. Less pressure to impress with material possessions

As mentioned earlier, Veblen coined the phrase conspicuous consumption to describe the lavish spending on goods and services acquired mainly for the purpose of displaying income or wealth. This term describes the behaviour of a limited social class. And although the behaviour has been around since the beginning of time, today’s credit culture has allowed it to permeate nearly every social class in today’s society. As a result, none of us is exempt from its temptation.

  1. More generosity

Rejecting excessive consumerism always frees up energy, time, and finances. Those resources can then be brought back into alignment with our deepest values. When we begin rejecting the temptation to spend our limited resources on ourselves, we are opened to the joy and fulfillment found in giving our personal resources to others. Kindness adds another key element.

  1. More contentment

Many people believe if they find (or achieve) contentment in their lives, their desire for excessive consumption will wane. The intentional rejection of excessive consumption opens the door for contentment to take root. Gratitude reinforces this.

  1. Greater ability to see through empty claims

Fulfillment is not on sale at our local department store. Neither is happiness. They never have been and never will be. As they say, if something is too good to be true, it usually is.

We all know this to be true. We know that more things won’t make us happier. It’s just that we’ve bought in to the message of millions upon millions of advertisements that have told us otherwise.

  1. Greater realisation that this world is not just material

True life is found in the invisible things of life: love, hope, and faith. We know there are things in this world more important than what we own. Happiness is perhaps an abstract concept and as such, an elusive goal. Focusing on gratitude, joy, generosity, contentment and kindness may be our true path.

As William James once said, “I don’t laugh because I’m happy. I’m happy because I laugh”.

The end of consumerism?

As some of the world’s biggest economies continue to strain under recession, a new movement has emerged; the sharing economy. In the wake of the financial bust, the sharing economy is changing the way we shop, buy, eat, commute and travel. Could this be the end of consumerism as we know it?

What is the sharing economy?

Sharing economy is “an economic model based on sharing underutilized assets from spaces to skills to stuff for monetary or non-monetary benefits.

The sharing economy takes advantage of connected mobile technology to allow people to rent things temporarily that they either don’t need to own permanently or can’t afford.

Everything from cars, central city parking spaces and designer clothes to accommodation are available from individuals and companies that are making billions from providing easy access to what people need in a difficult economy.

But it’s not always about money. Some just want to conserve resources and save the planet – feeling that it’s wasteful for everyone to own, say, a lawnmower – when you could just borrow one for a dollar.

Transactions can be made quickly through a cell phone app or a web site. Some say the sharing economy is expected to be worth $110 billion within the next few years.

How does this work?

If we have a luxury car that we rarely drive or a designer dress that we seldom wear, we can make it available for others to view and rent via their cell phones, tablets or computers for a tiny fraction of their retail value. This creates a whole new class of small-time retailers and happy luxury consumers.

The idea is that at the touch of a few buttons, we could have a drop-dead outfit, a killer car and a penthouse apartment for the night – affordably.

Companies have also got in on the act and provide everything from everyday cars for use by the hour to private chefs on demand in our own homes. Some car clubs and at least one major room rental company have spread to dozens of cities around the world. Uber is one of the best-known examples of a sharing economy model at work.

How is this changing our economy?

Rachel Botsman, co-author of “What’s Mine Is Yours: The Rise of Collaborative Consumption”, defines collaborative consumption (touched on earlier in the article) – also known as “shared consumption” – as “traditional sharing, bartering, lending, trading, renting, gifting, and swapping re-defined through technology and peer communities.”

So, collaborative consumption is “an economic model based on sharing, swapping, trading, or renting products and services, enabling access over ownership”. Examples are Netflix and Zipcar. It is said to be worth $3.5 billion this year.

As the idea has trickled down to people renting out their work-a-day cars, home parking spaces and bedrooms when not in use, experts say this will transform the level of car ownership and size of property that people buy. Researchers say that we only use our cars 8% of the time and we spend billions on the space where we store stuff that we almost never use, such as power tools.

What about the future?

The idea of non-ownership is spreading to things that we would normally keep for long periods of time. Solar panels are being rented rather than bought these days, for example.

The ease-of-use of mobile apps and payment technology amongst Shared Economy pioneers has led them to target the traditional business of others, such as package deliveries by logistics giants. Why shouldn’t it be as simple as touching a few buttons on our phone or a quick click on Amazon?

Companies are realising that rental relationships provide a gateway to brand loyalty with young technology-savvy people who will spread the word about their product.

In the post-consumeristic world, our well-being (physical, spiritual, emotional, psychological and social) is viewed as the aim of life (as opposed to material prosperity). It is about moving beyond our current model of addictive consumerism.

Post-consumerism posits a personal and societal strategy which utilises our core values to identify the “satisfaction of enough for today,” also referred to as “self-defined enoughness.” The intent and outcome is, “Do I have enough stuff for now?” And maybe even, “When is enough enough?”.

 

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