Conspicuous Consumption Under Stress

There is no question that consumption will decrease during this period of financial distress. Any recession is defined by a decrease in GDP, which is a measure of consumption [and the production of the goods and services we consume]. Given the current numbers, consumption has already decreased over the past few months. From the perspective of sustainability, the question is whether the quantitative reduction will be accompanied by a change in the nature of the "needs" that economists and psychologists argue drive consumption choices. If the reduction is only the result of having less money, then there is a reasonable expectation that consumption will eventually return to the same levels as it was before the crash.

This thoughtful article from the NYTimes suggests that some fundamental changes are indeed already starting to occur. I am not so sure because the focus here is on "conspicuous" consumption

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In just the seven months since the stock market crash, the recession has aimed its death ray not just at the credit market, the Dow and Detroit, but at the very ethos of conspicuous consumption. Even those who still have a regular income are reassessing their spending habits, perhaps for the long term. They are shopping their closets, downscaling their vacations and holding off on trading in their cars. If the race to have the latest fashions and gadgets was like an endless, ever-faster video game, then someone has pushed the reset button.

“I think this economy was a good way to cure my compulsive shopping habit,” Maxine Frankel, 59, a high school teacher from Skokie, Ill., said as she longingly stroked a diaphanous black shawl at a shop in the nearby Chicago suburb of Glenview. “It’s kind of funny, but I feel much more satisfied with the things money can’t buy, like the well being of my family. I’m just not seeking happiness from material things anymore.”

While not explicit, the argument in the item demonstrates the power of culture to shape consumption. Conspicuousness is purely a cultural attribute. I would guess that this "need' fits in the fourth level of Maslow's five-tier hierarchy: esteem (peer recognition). But what peers recognize is determined by the current social scoring system. Right now that scoring system has been affected by the financial stress apparent everywhere in the economy. Will the same criteria reappear as the finacial system recovers? I think they probably will. My reason is that cultural change comes slowly, and the policy medicine being applied aims at a fairly quick recovery. Whether it will recover so quickly is anybody's guess.

Missing is this picture is the individual and collection reflection that it is the quality, not quantity, of our society's consumption that needs to change before sustainability can become a reality. This kind of new consciousness is just not enough.

Even some of the very affluent said they were reluctant to be conspicuous in their spending.

“It’s disrespectful to the people who don’t have much to flaunt your wealth,” said Monica Dioda Hagedorn, 40, a lawyer in Atlanta who is married to an heir of the Scotts Miracle-Gro fortune. “I have plenty of dresses to last me 10 years.”

Is it disrespectful only now? I think it has always been so. There is more awareness now I am sure. That's great. But in any case, sustainability does not come from digging into the upstairs closet to pull out old clothes to wear. Sustainability relies on understanding that things do not bring happiness in either a recession or a boom. It is never the amount of things we have that matter; it is always the quality of our caring that makes us human and whole people. Talking about conspicuous consumption is helpful, but more talk about the unsustainability of "having" is critical.

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