The Future of Consumption

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From: max_sawicky
Re: umansky’s question

My basic stance in relation to the appeal by McKibben, and to what Vanderbilt calls the “voluntary simplicity” movement, is antagonistic. Is this the biggest problem we can think of? I certainly don’t think so.

Certainly a reduction in consumption will slow down economic growth (conventionally defined) at least in the short run. This means a likely rise in our currently low unemployment rate. On the other hand, it is possible that the increased savings will increase capital formation in the U.S. and raise growth later.

But if we all work and consume less, then there is less growth now and later. I’m not convinced this is a good thing. Economic growth, even by conventional definition, is the basis for solving problems, including those pertaining to the environment. We can afford to be more altruistic individually and collectively, and past experience suggests that we tend to behave in this way.

Fixing environmental problems can be expensive. For instance, rebuilding our cities and thereby reducing congestion, pollution, and the elimination of green space, in short, the reversal of “suburban sprawl,” is going to cost a lot. Research and development to devise and commercialize fuel-efficiency has costs which private industry is not sufficiently eager to embrace. Environmental clean-up for existing damage has a large tab.

One canard that floats over this discussion is the notion that over the past 20 years, and particularly in the bad 1980s, we experienced a consumption boom, a wave of profligacy and personal indulgence. This is bunk. Consumption growth was not different in the 1980s from prior years. What did change was income growth. Income fell relative to consumption. Trends in people’s habits did not change, but their way of financing these habits did. If wages had not stagnated since 1973, families would have borrowed less and we would have seen less of the so-called “consumption boom” in the sense that savings rates might not have fallen as much, if at all.

The other question is about me the consumer, as opposed to economist. I would like to be able to achieve greater self-discipline in my own consumption, but this has nothing to do with any social good but purely what would be good for my family. I would not like to explain to my four-year-old why she should do with fewer toys, books, Chuck-E-Cheese expeditions, etc. One reason, other than her own state of mind, is the benefits to my own time (not money) that result from her ability to occupy herself. Consumer products facilitate the use of leisure time, as well as exhaust such time. Fewer products might result in more time, but not necessarily time better spent.

Of course, we would like consumption to reflect humane values, and in a market-based system the necessity of profits endangers such values. Note that this is a concern along numerous points of the political spectrum, including the right. Markets are amoral. They sell what people want, think they want, or are convinced they want, and often we decry the social and personal consequences of this process. There is a place for discussing how to regulate markets for the sake of promoting ethical, social values, but I don’t think we get there by exhortations to buy less.


Max B. Sawicky

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