Consumerism
Why we consume at the cost of creating real, sustainable wealth.
We have as serious consumption problem as a species. Obviously, many aspects of our survival are rooted in consumption. We need to consume food, water, and air in order to survive. And we need to consume resources like land, wood, minerals, and energy in order to create wealth and make our lives easier and more enjoyable to live. This type of consumption is natural, and not problematic.
The problem we face today is that we value consumption over almost all other goals. In the media, almost all advertisements are focused towards selling a consumable product. We have a very fast fashion culture where trends are adopted and abandoned quickly to sell new products. We have created a whole industry of fast food, where the speed and ease of consumption is valued over having a sustainable and healthy process of creation. Around 37% of Americans consume fast food regularly, and it has had a great impact on our overall health as a nation (Nearly 37 percent of Americans regularly eat fast food 2022). Consumption has even made its way into our music and popular culture, with many hip hop and rap songs focusing on the pursuit of luxury items and new material wealth. Thankfully, some counterculture is emerging (Kendrick Lamars N95 comes to mind), but the damage that the prior cultural standard has done on the habits of younger generations is great. It has done so much harm to how we value our time and wealth that consumer spending makes up about 70% of economic activity in the United States (An overview of Federal Regulations and the GDP 2021). Why do we consume so much, and how can we fix our mindset and time preferences to create a stable and truly wealthy society in the future?
Consumption is still rising, and I believe it will continue to rise as a percentage of our wealth as measured by GDP for some time to come. Personal consumption expenditures (PCE), increased 2.5% in the fourth quarter (Q4) 2021, which was an increase from the third quarter’s 2.0% gain, but still far behind Q1 and Q2’s much more substantial increases of 11.4% and 12%, respectively (Amadeo, Consumer spending increases 3.3% in Q4 2021 2022). Some of that early growth is simply due to the year over year nature of these statistics and the lagging effects of lockdowns, but a lot of it has to do with the nature of our money. As the printing of money has trickled through the economy, the cost of assets which hold real value has risen. Housing has become much more expensive, cars are more expensive, energy is more expensive, and so on. Since wages have a lagging effect and do not match the true pace of inflation, workers have continued to be able to save less and less. In 2022, studies show that 64% of Americans are living paycheck to paycheck, to the point that if they missed one check they would go underwater on essential bills (Jdickler, As inflation heats up, 64% of Americans are now living paycheck to paycheck 2022). With our money devaluing and our savings rates becoming smaller and smaller, it is no wonder that the only thing the American consumer can focus on or plan for is the short term.
When the incentives in society reward short term spending habits and punish long term saving habits, people start to change their behavior to meet the system. This has resulted in consumers saying that they make 5 impulse purchases a month on average, amounting to $109 monthly (Americans spend at least $18,000 a year on these non-essential costs 2021). While this clearly isn’t the problem and is not the reason for the increasing wealth inequality, it is a symptom of the punishing battle those saving money in USD have to go through. Citizens do not see the value in saving and planning for the future 5, 10, or 20 years out because our entire structure does not reward them for doing so. We are squeezed into a corner where all we can do is meet our short term needs, and we are encouraged to empty our pockets, take on debt, and live a short timeframe lifestyle all to fuel this monster which is an infinite growth based economy.
This overconsumption of things which bring short term pleasure has rotted our society. We build things of poorer quality because we can sell it multiple times. We have worse quality food, worse quality roads and infrastructure, and worse quality businesses because the pursuit of short term profit is so much more rewarding than the pursuit of long term sustainability and security. This has contributed greatly to the climate crisis. How can we be conservative and sustainable with our actions when we need to spend now, buy now, and consume now?
The root problem is the money. We need a currency which rewards savers and cannot be inflated or controlled by the government. When we had a gold standard, we had much more stable and sustainable wealth growth where the wealth inequality and government overreach were nowhere near the levels of today. The problem is not the people. The culture is dictated by the system. If we had a system where saving was rewarded, the money supply was fixed, and debt was much more expensive, people would naturally begin to make smarter long term decisions. Until we have adoption of this new system, we will continue to see the extremes which come with an inflationary currency. More focus on fulfilling short term needs, less wealth and influence for the working class, and less concern for the long term outcome of our actions.
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The great news is, anyone who wants to change their mindset can already opt out and start to see the world and value as it truly is again, instead of the illusion that corrupt politicians and the devils at the banks want you to see.
Citations:
Amadeo, K. (2022, May 17). Consumer spending increases 3.3% in Q4 2021. The Balance. Retrieved May 23, 2022, from https://www.thebalance.com/consumer-spending-trends-and-current-statistics-3305916
Americans spend at least $18,000 a year on these non-essential costs. digitalhub US. (2021, September 6). Retrieved May 23, 2022, from https://swnsdigital.com/us/2019/05/americans-spend-at-least-18000-a-year-on-these-non-essential-costs/
Jdickler. (2022, March 8). As inflation heats up, 64% of Americans are now living paycheck to paycheck. CNBC. Retrieved May 23, 2022, from https://www.cnbc.com/2022/03/08/as-prices-rise-64-percent-of-americans-live-paycheck-to-paycheck.html
An overview of Federal Regulations and the rulemaking process. (n.d.). Retrieved May 23, 2022, from https://sgp.fas.org/crs/misc/IF10003.pdf
Safety+Health. (2022, May 20). Nearly 37 percent of Americans regularly eat fast food, study shows. Safety+Health. Retrieved May 23, 2022, from https://www.safetyandhealthmagazine.com/articles/17784-nearly-37-percent-of-americans-regularly-eat-fast-food-study-shows
Shah, A. (n.d.). Consumption and consumerism. — Global Issues. Retrieved May 23, 2022, from https://www.globalissues.org/issue/235/consumption-and-consumerism
U.S. Bureau of Labor Statistics. (2019, April 1). Consumer expenditures in 2017 : BLS Reports. U.S. Bureau of Labor Statistics. Retrieved May 23, 2022, from https://www.bls.gov/opub/reports/consumer-expenditures/2017/home.htm
