“Consumption is the sole end and purpose of all production,” Adam Smith unhesitatingly announced in The Wealth of Nations in 1776. Smith’s quote is famous, though it was in an earlier work, 1759’s The Theory of Moral Sentiments, that Smith singled out the social and psychological impulses that push people to accumulate objects and gadgets.
People were stuffing their pockets with “little conveniences, and then buying coats with more pockets to carry even more,” he observed. Quite rightly, tweezer cases, elaborate snuff boxes, and other “baubles” might not have much use. But, as Smith pointed out, what mattered was that people looked at them as “means of happiness”.
People have always “consumed” the necessities of life – food, shelter, clothing. Though they have always had to work to get them or have others work for them, there was little economic motive for increased consumption among the mass of people before the 20th Century.
Stopping GDP growth
In the course of the 20th Century, capitalism shaped the ordinary person into a consumer. Reflecting on the implications of the conspicuously wasteful US consumer binge after WWII, John Kenneth Galbraith pointed to the possibility that this “gargantuan and growing appetite” might need to be curtailed. “What of the appetite itself?” he asks in his 1958 essay.
“Surely this is the ultimate source of the problem. If it continues its geometric course, will it not one day have to be restrained? Yet in the literature of the resource problem this is the forbidden question.” It reminds me of the numerous articles, letters to the Editor, and fb posts in the last seven years regarding stopping the growth of the GDP as the ultimate solution to having a better environment. A crazy idea, if ever there was one. The question should be how to grow sustainably, not whether to grow. Of course, out of the thousands who appeal for less GDP growth, very few indeed would be willing to forego the extravagances they call necessities.
The question should be how to grow sustainably, not whether to grow.
True, our homes are now full of electronic gadgets. The list is endless. I too have my share of them, though I am resisting, for the moment, buying a smart mirror equipped with advanced facial gesture recognition technology that turns on by simply ‘seeing’ me stand in front of it, or a Robotic Kitchen Chef that has learned from the best by observing and mimicking the movements of top chefs in the industry and can cook me a meal from recipes on my app library while I am driving back home.
Economists were not alone in discovering consumption. The larger movement included states, social reformers, and consumers themselves. Attention turned to the “standard of living”, a new concept that entered the lexicon of household budgets from Boston to Berlin and Bombay.
President Herbert Hoover’s 1929 Committee on Recent Economic Changes waxed lyrical on an “almost insatiable appetite for goods and services” and envisaged “a boundless field before us … new wants that make way endlessly for newer wants, as fast as they are satisfied”. In this paradigm, people board an escalator of desires (a stairway to heaven, perhaps) and progressively ascend to what were once the luxuries of the affluent.
“Keeping up with the Joneses” became a parable where envy of those just above oneself in the social order incited consumption and fuelled economic growth. People were encouraged to give up thrift and husbandry, and to value goods over free time. It was an idea put forward by the new “consumption economists” such as Franco Modigliani and Milton Friedman. Many business leaders eagerly embraced it.
New needs were continuously created, with advertising brought into play to “augment and accelerate” the process. Politicians soon joined the bandwagon, encouraging ever-increasing aspirations and promising “a high standard of living”. They still do. The promise of a high standard of living was one of the mantras of the EU membership campaign in 2004.
Buying fuel-guzzling SUVs, Lacoste shirts (to be worn not more than a dozen times, lest somebody might think we cannot afford the latest ones), Android TVs, iPhone 13s, Rihanna gym shoes, has become an imperative. God forbid if our circle of friends whisper behind our backs at the Marsa Sports Ground Clubhouse that we are wearing a Seiko Astron GPS Solar 5X Series Perpetual Chronograph Quartz watch costing a measly €1,230 when most other are wearing a Patek Philippe Calatrava white gold watch costing €31,400, or the Mrs is wearing a Panthère de Cartier yellow gold watch costing €6,800 rather than an Audemars Piguet Royal Oak Lady’s rose gold one costing €57,200.
Now, of course, we need to own a yacht to keep up with the Joneses. If we are not seen at Mġarr ix-Xini anchoring our Sunseeker 65 sport yacht costing €2.4m, we do not belong. We have to be content with anchoring at Mellieha Bay to join all the other wannabes with our Sunseeker Manhattan 50 costing just €386,000. The former obviously are anxiously awaiting a spot at Ian Borg’s new Marsascala marina.
The promise of a high standard of living was one of the mantras of the EU membership campaign in 2004.
Joining the capitalist system has become the imperative for many countries. The final seal was given when 30 years ago Deng Xiaoping launched “capitalism with Chinese characteristics” and started the process of making Communist China a world industrial power. Who would have ever thought that The Theory of Moral Sentiments would win the heart and mind of Chinese premier Wen Jiabao?
Of course, capitalism and the consumer society are dependent on a logic of never-ending growth. In his classic 1928 book Propaganda, Edward Bernays, one of the pioneers of the public relations industry, put it this way: “Mass production is profitable only if its rhythm can be maintained.” He argued that business “cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda … to assure itself the continuous demand which alone will make its costly plant profitable”.
Charles Kettering, general director of General Motors Research Laboratories, equated such perpetual change with progress. In a 1929 article called “Keep the Consumer Dissatisfied”, he stated that “there is no place anyone can sit and rest in an industrial situation. It is a question of change, change all the time – and it is always going to be that way because the world only goes along one road, the road of progress.”
The number of dissatisfied customers has grown exponentially since then. Whether it’s a bad day at work or something to celebrate, retail therapy is something most of us have indulged in at least once, right? Turns out, there’s a psychological reason behind that impulse to spend. The plastic cards have never worked so fast and continuously.
“Some people are simply more inclined to spend, using shopping as a way to lift their spirits,” says Simonne Gnessen, founder of Wise Monkey Financial Coaching. When other issues, such as anxiety and unhappiness, come into play, there’s no end to the financial risks we are prepared to take.
Confronted by the plenty it creates, consumerism has often been confronted by threats to its very existence. The 1990s gave birth to the idea of sustainable consumption, a commitment championed by the United Nations in Rio de Janeiro in 1992. Price incentives and more-efficient technologies, it was hoped, would enable consumers to lighten the material footprint of their lifestyles.
Since then, there have been many prophecies and headlines that predict “peak stuff” and the end of consumerism. Today, climate change makes the future role of consumption increasingly uncertain. People in affluent societies, it is said, have become bored with owning lots stuff. They prefer experiences instead or are happy sharing. Dematerialisation will follow.
Such forecasts sound nice, but they fail to stand up to the evidence. In today’s world economy, services might be growing faster than goods, but that does not mean the number of containers is declining. And, of course, the service economy is not virtual, and requires material resources too. In Malta, people drive thousands of miles annually to do their shopping — that involves a lot of rubber, tarmac, gas, and new, wider roads. Digital computing and WiFi absorb a growing share of electricity. Low-cost airlines like RyanAir and accommodation-sharing platforms like Airbnb have likely increased frequent travel and flights, not reduced them.
Moreover, people may say they feel overwhelmed or depressed by their possessions but, in most cases, this has not converted them to living more simply. Whether and how consumers can adapt to a world of climate change remains the big question for the 21st century.