Henry Badger explores the multifaceted impact of consumerism on the wellbeing and evolution of our society.
The word ‘consumerism’ has often been used to describe our modern culture of spending. Many skeptics accuse our consumerist culture of suppressing creativity and culture whilst fostering the production of wasteful items that provide no real additional benefit; this lead many to believe that the benefits of our materialistic culture are outweighed by the drawbacks. However, is consumerism really that bad? Alternative to the classic anti-consumerism philosophy, it should be explored whether consumerism is an imperative driver for the creation of innovative industries, the motivation of entrepreneurs, and a necessary driver of economic growth and the success of an economy.
A Force for Innovation
At the most basic level of consumerism, the retail industry generated nearly seven-hundred billion dollars in revenue during the holiday season of 2017. This influx of demand generated more than seven-hundred thousand new jobs and the holiday season revenue has steadily increased in nominal growth every year. However, the concept of consumerism has arguably a much greater scope of influence beyond the retail industry. Consumerism can be defined as the promotion of the consumer’s interests. Through the placation of these interests — breakthrough firms such as those in California’s Silicon Valley are able to thrive.
Silicon Valley has contributed to our world’s rapid progress in technology and industries that have innovated the world; allowing consumers to be more connected and productive. The constant expansion of consumer interests opens the door to hundreds of new industries. A prime example is the company Tesla, Inc which has allowed tens of thousands of consumers to purchase eco-friendly electric vehicles. The emerging electric automobile industry alone has generated billions of dollars in revenue to date, and the industry is continuing to rapidly expand. The electric vehicle industry is not alone. The most successful Fortune 500 companies have created a product or service that attempted to fix a consumer problem; with some of these companies even creating entire new industries through the founding entrepreneur’s ambition.
To expand upon this claim, consider the company Uber. Before Uber, the taxi service operated a monopoly within major cities and suburbs with autonomy over the price and availability. Excluding public transportation and private cars, if a consumer wanted to get from point A to point B, the taxi cab was one of the dominant providers. Uber changed and disrupted the taxi service industry by allowing the consumer to order taxi rides more conveniently and cheaper than the traditional taxi system. Uber was able to dominate the market by promoting innovations that appeal to the consumers’ desire to find superior methods of transportation against overpriced taxis and crowded public transportation. These startup companies ultimately displace the powerful firms through listening to and acting on the consumer needs within an existing industry and by offering a truly preferable product or service. In this way, consumerism acts as the force encouraging firms to continually innovate and add value in order to keep their market relevance.
An Inefficient Allocator of Resources
Does consumerism ensure that the market produces in the most efficient way and that the variety of goods offered truly benefit the common individual? In the United States alone, a total of 254m tons of trash was pure waste. Up to 60% of the waste in our bins could be recycled in the UK. On average, around eight million metric tons of waste pollutes our oceans annually; spoiling our planet over microbeads and carbonated drinks.
In many ways, consumerism furthers the disparity in global wealth, causing ‘the rich to get richer and the poor to get poorer’. Statistically, the top 10% most affluent individuals consume 59% of resources whilst the bottom decile only consume a mere 0.5%. If the total revenue generated from cigarette sales in Europe alone ($50bn) was collected and redistributed, our world could be vastly improved and revitalized. For example, we could invest that money in things like education and infrastructure. Instead, consumerism encourages irresponsible spending habits and unsustainable extraction of resources when our world is in dire need of redistribution to focus on essential developments.
The Darwinian Nature of the Consumer Market
The Dot Com era in the 1990s is a perfect historical case illustrating that if businesses wish to survive they must offer the customer intrinsic value in their products. The adoption of the internet inevitably led to the birth of hundreds of startups; all attempting to capitalize on this unprecedented emerging industry. This grew into a large speculative bubble and when the bubble eventually burst during 2001, it forced hundreds of over-valued companies to go out of business. The companies that promoted consumer benefits and interests were the corporations to survive the crash (e.g: Amazon, eBay, Oracle, Adobe, IBM). Hence, a virtue of consumerism is that it only ensures the survivability of products that consumers find beneficial. At the same time, these products and their companies will cease to exist once another entrepreneur develops an innovation that disrupts the current industry. In other words, both consumers’ fickle mindsets and desires, and disruptive competitors determine the future of entire markets. A great illustration of this is how Netflix replaced the store Blockbuster because the latter failed to adapt their business model to changing consumer demands and Netflix’s innovations. Consumerism is unforgiving to any company that becomes stagnant. The powerful group of corporations FAANG (Facebook, Apple, Amazon, Netflix, Google) long-term security relies on their ability to keep moving the needle. Faced with these conglomerates, many consumers understandably feel a lack of power — but collectively consumers have more power than any corporations do. After all, it all boils down to consumers’ spending habits.
It is important to consider the negative impact of consumerism on the well-being of society. The consumerist mindset changes frequently, which the constant evolution of new fashion trends and technological devices shows. This may very possibly cause more of a burden on consumers as they try to stay current. Zara, a fashion brand, features over 10,000 new designs every year. Endless adverts telling consumers to buy more clothes can hardly be good for both their mental well-being and wallets. The word ‘affluenza’ describes this feeling of un-fulfillment. Affluenza is when individuals are in pursuit of money, wealth, and material possession at the expense of other sources of self-esteem and contentment. Some aspects of consumerism may thus inherently be unhealthy and redundant. Instead, we need to focus on the intangible relationships and experiences that grant us true satisfaction. Shockingly, Americans save on average only 4% of their income with 33% of the population in debt. It is possible that by simply slowing the detrimental pursuit of burdensome consumption we may be able to afford investing our hard-earned money into better alternatives — if not, our world may need to restart from the ground up; forcing us to redefine the concept of ‘true happiness’ to encourage less materialistic possessions and grant more self-fulfilling experiences.
Whether consumerism is a benefit or a burden to our society as well as our economy raises some great points for discussion. On the one hand, consumerism is largely inefficient and wasteful for the environment, in addition to increasing the wealth gap even when we could spend the money on more pressing issues. On the other hand, consumerism is one of the core reasons for the extensive technological progress that shapes our world today. Does the consumerist mindset encourage over-valuing materialistic possessions, or innovation? Is consumerism good or bad? Whatever opinion you have developed, it is clear that consumerism will be a topic of debate for many years to come. As with many anthropological questions a true judgment may never be agreed upon.