Not So Fast: Consumption Still Threatens Sustainability

bursting bubble

My colleagues in the sustainable consumption world picked up an article, “We’re Spent” from the 7/17/11 Sunday NYTimes that argues that the great consumer bubble has finally burst. Focusing on the persistence of unemployment and the slow recovery from the Great Recession, David Leonhart picks the sharp reduction in consumer spending as the primary cause.

But the real culprit — or at least the main one — has been hiding in plain sight. We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making. . . If you’re looking for one overarching explanation for the still-terrible job market, it is this great consumer bust. Business executives are only rational to hold back on hiring if they do not know when their customers will fully return. Consumers, for their part, are coping with a sharp loss of wealth and an uncertain future (and many have discovered that they don’t need to buy a new car or stove every few years). Both consumers and executives are easily frightened by the latest economic problem, be it rising gas prices or the debt-ceiling impasse.

No argument with this; the data cited in the article are compelling. Consumer spending dropped almost 7 percent in this recent collapse, compared to no more than the 3 percent decline that accompanied previous troubles in the last several decades. The publication of this data prompted a response from my colleagues that we are finally “seeing the end of the consumer era.” I wish it were so, but our hyper-consumption culture has a structure that may well survive in spite of the loss of much disposable income and the confidence that goes with all that available wealth.

The patterns of consumption in the United States can be explained by a number of theories in play in academia and punditry, going beyond purely macroeconomic models. Tim Kasser (see a short talk in this video part 1; part 2) ties it to the dominance of extrinsic values in the US that push us to consume to support our images in a culture where outward signs signal who we are. Mary Douglas developed a similar theory arguing that we signal who we are and what we want others to understand comes through the material goods we own. Julie Schor thinks that our unceasing desire for novelty starts a cascade of consumption as we upgrade our surroundings to match the novel purchases we make. Maslow says we consume to satisfy our basic set of needs starting with subsistence and safety. Triandis presents a complicated theory that combines past habits with beliefs, social norms and our emotional affect. All of these theories and more are discussed in the excellent text, The Earthscan Reader on Sustainable Consumption, edited by Tim Jackson.

So the real question about this recent drop in consumption is whether the cultural roots have changed along with the loss of buying power and confidence. Only time will tell, but I doubt it. The solutions being sought by the political and corporate world aim at restoring the situation to the prior state as quickly as possible. Leonhart is not so sanguine about the future of this kind of policy.

The notion that the United States needs to begin moving away from its consumer economy — toward more of an investment and production economy, with rising exports, expanding factories and more good-paying service jobs — has become so commonplace that it’s practically a cliché. It’s also true. And the consumer bust shows why. The old consumer economy is gone, and it’s not coming back.

Where are these exports supposed to go? To another economy on its way toward or already where we have been? This might be a way to reduce the burden unemployment brings but it continues to create unsustainability. The Planet doesn’t care which continent produces the stresses that are threatening our livelihood more fundamentally than the economic status is.

I find it curious and ironic that Leonhardt, echoing just about everybody else that talks about this situation as he writes, fails to mention the role of inequality, which has reached record levels, just like the drop in consumption. At the same time we are producing less, reflecting the missing aggregate demand, the wealth needed to consume has shifted dramatically into the hands of the rich who do not spend it proportionately as the less wealthy would if they had it.

Sustainability demands that the world stop consuming in the way we do today. The qualification in this last sentence is critical. Consumption is an inevitable consequence of living and cultural existence for humans. If we stop consuming, we will die like all other creatures. All the theories I mention and others that incorporate a cultural element result in inauthentic behavior and the persistence of the Having mode of life I frequently write about. A shift of the cultural values toward those that produce authenticity and Being, as embedded, for example, in the intrinsic set in Kasser’s work, is essential. No clever economic policy, even if it restores the system to the way it was in the “good old days,” will do anything for sustainability. It’s premature to celebrate the trends of the moment as anything more than temporary. It is an opportunity, however, to demonstrate that a different set of values that spawn a recovered understanding of the importance of relationships, not things, will produce a satisfying life. GDP levels and growth rates can never measure this kind of flourishing well-being essential to sustainability.

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2 Comments

David M. Carter said:

More great stuff, John!

Of course, (hyper) consumerism is a two-way street. It's easy and convenient to focus on the demand side of the equation by suggesting that we need to realize a way of being that is more directly tied to the ecosystem upon which we depend for survival. We must also not lose sight of the supply side of the equation.

Perhaps Leonhardt addressed this in his NY Times piece, but the semantics of the excerpts you presented smacked of the assumption that people choose what is best for them (the utilitarion perspective). The more I learn about the complexities of human behavior, the more I recognize that supply is at least as critical as demand in consumerism. Corporations are adept at manufacturing "needs", and supporting them with media campaigns designed to confuse needs from wants. As an example, the number one viewed story on CNN.com today is about an iPhone that survived a fall from an airplane. Of course, such as story has no relevance in a society that is detached from psychopathological materialism.

Ali said:

The only way I see to address unsustainable consumption is to reduce working hours and incomes. Reducing consumption won't do any good if I'm still earning lots of $, saving it in the bank, so the bank finds somewhere else to spend it.