What's the alternative to a consumerist society? Is there one?

[melissel]

ETA: Rats, I meant to say "economy," not "society." Sorry!

 

Let me start by saying that I may not be expressing myself well at all. Macroeconomics is not a subject I know much about. Since the economy began tanking and the belt tightening began, I've just been thinking and wondering about this and wish I knew how to learn more. Reading Julie's "single-income family" thread finally prompted me to ask. Any recommendation for reading materials would be very welcome!

 

Here's what I'm wondering. We are such a consumption-based economy. When that kind of economy starts to fail and people start buying less, the economy sinks even more, right? We've talked a lot, in many threads, about how families could get by on less if they were really frugal and how US consumers' expectations of a "normal" lifestyle involve so many unnecessary things (smart phones, big TVs, iPads, etc.). If we actually managed to lower those expectations and get people consuming less, what does that mean for the economy as a whole? Is there an alternative type of economy that we could be working toward, rather than just encouraging people to buy more?

 

If the answer to these questions are really obvious, please don't laugh at me :D Finance and economics are topics that seem really overwhelming to me, so I have a hard time knowing where to start!

 

TIA for your thoughts.

Edited April 12, 2012 by melissel

[LAS in LA]

:bigear:

[enviromommy]

ETA: Rats, I meant to say "economy," not "society." Sorry!

 

Let me start by saying that I may not be expressing myself well at all. Macroeconomics is not a subject I know much about. Since the economy began tanking and the belt tightening began, I've just been thinking and wondering about this and wish I knew how to learn more. Reading Julie's "single-income family" thread finally prompted me to ask. Any recommendation for reading materials would be very welcome!

 

Here's what I'm wondering. We are such a consumption-based economy. When that kind of economy starts to fail and people start buying less, the economy sinks even more, right? We've talked a lot, in many threads, about how families could get by on less if they were really frugal and how US consumers' expectations of a "normal" lifestyle involve so many unnecessary things (smart phones, big TVs, iPads, etc.). If we actually managed to lower those expectations and get people consuming less, what does that mean for the economy as a whole? Is there an alternative type of economy that we could be working toward, rather than just encouraging people to buy more?

 

If the answer to these questions are really obvious, please don't laugh at me :D Finance and economics are topics that seem really overwhelming to me, so I have a hard time knowing where to start!

 

TIA for your thoughts.

 

Yes! Google Lester Brown and read his books. He's an economist and a McArthur Genius Award recipient who argues for a "steady state" economy that does not rely on constant growth, which is, of course, unsustainable anyway. He writes a lot about environmental issues, but it dovetails with what you were asking about. I think he wrote a book called "Steady State Economy" that specifically addresses the new economic paradigm where growth isn't required for health.

 

Edited to clarify that he may not be an economist - just looked up and I think he's more environmental activist, but I don't have time to fully refresh my memory. But he does address exactly what you were asking.

Edited April 12, 2012 by enviromommy
to clarify

[Amy in NH]

I've been thinking about this lately. Why can't things just stay a fixed price, and people get paid a fixed amount? People expect raises, which raises the cost of goods, which causes more people to need raises, which causes the cost of their goods and services to go up, ad infinitum. This seems so ridiculous to me. No-one is actually getting ahead.

[NASDAQ]

Sure, there are lots of alternatives to capitalist societies. There's communism, or feudalism, for example. They're just vile, that's all. Or at least, people rarely choose to live in those societies rather than capitalist societies.

[NASDAQ]

I've been thinking about this lately. Why can't things just stay a fixed price, and people get paid a fixed amount? People expect raises, which raises the cost of goods, which causes more people to need raises, which causes the cost of their goods and services to go up, ad infinitum. This seems so ridiculous to me. No-one is actually getting ahead.

 

Well not exactly. We're richer than we were in 1950, or 1900, or 1850. We eat better, live in larger houses, travel more, and spend more time in full-time education than we ever did before.

 

Prices are flexible because they have to respond to demand. What you are advocating is "wage and price controls." It is not a very successful policy: http://en.wikipedia.org/wiki/Price_controls

 

http://en.wikipedia.org/wiki/Incomes_policy

[enviromommy]

Sure, there are lots of alternatives to capitalist societies. There's communism, or feudalism, for example. They're just vile, that's all. Or at least, people rarely choose to live in those societies rather than capitalist societies.

 

I guess it's not a surprise that someone whose user name is a stock market is happy with capitalism! (In case you can't tell my tone, I'm totally joking. I just thought your user name was appropriate to your comment.)

 

But seriously, you don't need to leave the capitalist model to move towards steady state rather than endlessly growth oriented. I can't remember the full argument, but I remember finding it convincing at the time. (See my previous post.)

[NASDAQ]

But seriously, you don't need to leave the capitalist model to move towards steady state rather than endlessly growth oriented. I can't remember the full argument, but I remember finding it convincing at the time. (See my previous post.)

 

It's a lot easier to formulate a convincing academic argument than to actually run an economy.

[Bootsie]

Alan Blinder, economist at Princeton, wrote a book "Hard Heads, Soft Hearts" a number of years ago, which provides down-to-earth explanations of economic issues. It provides a "hard heads" analysis--a thorough understanding of economics--balanced with "soft hearts"--a care and concern about fairness and equity issues, as opposed to a cold, academic economic viewpoint.

[enviromommy]

It's a lot easier to formulate a convincing academic argument than to actually run an economy.

 

Obviously. But that doesn't mean we shouldn't have intellectual arguments at all, does it? Someone could have told John Locke that it was "easy for him" to argue for the right to life, liberty, and property - until his ideas actually got incorporated into our constitution.

 

Plus, it's a fact that a growth economy can't be sustained forever, since the earth isn't infinitely large, so hadn't we better be thinking about it?

[NASDAQ]

Obviously. But that doesn't mean we shouldn't have intellectual arguments at all, does it? Someone could have told John Locke that it was "easy for him" to argue for the right to life, liberty, and property - until his ideas actually got incorporated into our constitution.

 

I think I would be with Burke on this one. The vast majority of ideas on reforming the economic system are extremely bad ones. The vast majority of political ideas are also very bad, but at least occasionally we have a good political idea. We never have a good managed economy.

 

Plus, it's a fact that a growth economy can't be sustained forever, since the earth isn't infinitely large, so hadn't we better be thinking about it?

 

This only makes sense if you assume that people will always take up more physical space and resources, which isn't necessarily the case. Thanks to innovation, growth can continue.

[MistyMountain]

Sure, there are lots of alternatives to capitalist societies. There's communism, or feudalism, for example. They're just vile, that's all. Or at least, people rarely choose to live in those societies rather than capitalist societies.

 

 

Actually the economic spectrum is huge and straight up capitalism, communism and feudalism are not the only possibilities. The amount of resource use in the current system in this country is not sustainable at all.

[Kirch]

Well not exactly. We're richer than we were in 1950, or 1900, or 1850. We eat better, live in larger houses, travel more, and spend more time in full-time education than we ever did before.

 

I'm totally for capitalism, but I'm not so sure this is accurate. So much of this is stuff we (as a society) have gone into debt for--we may have a higher quality of life in some ways, but are we really richer if we're doing so much of it on loans and credit? Is the average household net worth actually higher when adjusted for inflation and amounts of debt that would make our great-grandparents roll over in their graves?

[NASDAQ]

I'm totally for capitalism, but I'm not so sure this is accurate. So much of this is stuff we (as a society) have gone into debt for--we may have a higher quality of life in some ways, but are we really richer if we're doing so much of it on loans and credit? Is the average household net worth actually higher when adjusted for inflation and amounts of debt that would make our great-grandparents roll over in their graves?

 

That's why I used non-fiscal measures. We eat better. We live longer. We consume more medical care. We live in larger, more comfortable houses. Even members of our society with negative net worth are eating better, living longer, and consuming more medical care than our great-grandparents did.

[Melissa in Australia]

I guess it's not a surprise that someone whose user name is a stock market is happy with capitalism! (In case you can't tell my tone, I'm totally joking. I just thought your user name was appropriate to your comment.)

.)

 

Oh! so it is. For some funny reason I never noticed that before, I thought it was a Russian name :lol:

 

 

( did I mention that I have Dyslexia and have trouble pronouncing words )

[Melissa in Australia]

 

This only makes sense if you assume that people will always take up more physical space and resources, which isn't necessarily the case. Thanks to innovation, growth can continue.

 

thought that was why countries are starting to seriously look at mining the moon.

Edited April 12, 2012 by melissaL
spelling

[Mama Geek]

That's why I used non-fiscal measures. We eat better. We live longer. We consume more medical care. We live in larger, more comfortable houses. Even members of our society with negative net worth are eating better, living longer, and consuming more medical care than our great-grandparents did.

 

Nasdaq, I am right there with you all the way on Capitalism.:) That being said, I don't agree with some of your non-fiscal measures that you use for examples and thought it might make for interesting conversation.:D

 

I don't think most people eat better. When was the last time that you really got fresh meat and veggies at the grocery store or while eating out? I have had food fresh out of the garden or from a butchered animal. It is so much better than what the typical person who doesn't farm can get. Yes there is more food available, and lots of variety, but I don't think that means we eat better. Although if you have food vs not having food then that is better.

 

We do live longer.

 

Consuming more medical care is not always to our benefit. I agree whole heartedly with the advances in medicine and the life saving procedures that are out there for various illnesses. In this country there are so many unnecessary medical procedures, tests, etc. that has partly caused the cost of health care to sky rocket. I only see that getting worse in the future.

 

Yes we are living in larger houses, but for the most part they are not as well built as houses that were built even 100 years ago. One of the things that has stuck in my mind for years was something that I learned after one of the big Florida hurricanes. There were areas where entire neighborhoods were wiped out, with the exception of habitat houses. They had been built with larger members, say 2x6's instead of 2x4's, they typically had more nails joining members, the members were spaced closer together, etc. They were stronger better built homes.

 

Just some food for thought.

[Onceuponatime]

Years ago, I heard about an essay called "Capitalism, the Last Great Idea." If there is a better idea, it would require a huge shift in the global mindset.

 

Many countries in the world are just getting their first taste of capitalism. I wonder if they will believe us in if we (the U.S.A) decide something else is better. Maybe they will experience the after affects of a consumeristic orgy quicker than we have. Maybe if a developing developing country had wise leadership, it would come up with a new model that we could emulate.

 

One problem here is we just have so much inertia. Plus, government has become so involved in the economy that there is a real question as to wether we still live in a truly capitalistic society. I think there has always been that tiny voice that questions, "Is basing a society on hope of personal gain, really the best way?" Then there is the other question, "What other way is there that doesn't require excessive use of force?"

 

Truly, it would require an acceptance of a new philosophy of life.

[Mama Geek]

Years ago, I heard about an essay called "Capitalism, the Last Great Idea." If there is a better idea, it would require a huge shift in the global mindset.

 

Many countries in the world are just getting their first taste of capitalism. I wonder if they will believe us in if we (the U.S.A) decide something else is better. Maybe they will experience the after affects of a consumeristic orgy quicker than we have. Maybe if a developing developing country had wise leadership, it would come up with a new model that we could emulate.

 

One problem here is we just have so much inertia. Plus, government has become so involved in the economy that there is a real question as to wether we still live in a truly capitalistic society. I think there has always been that tiny voice that questions, "Is basing a society on hope of personal gain, really the best way?" Then there is the other question, "What other way is there that doesn't require excessive use of force?"

 

Truly, it would require an acceptance of a new philosophy of life.

 

I think capitalism can only work where there are shared values. If you are going to try to cheat people or are suspect of everyone those values are long gone. I know many here disagree with me, but the country as a whole has lost faith in God. He is the basis of our freedom. I don't think any society will prosper as a whole without that.

[stripe]

However being a consumer society doesn't mean "buying random junk" all the time. In Japan, for example, citizens buy stuff -- but they demand higher quality items and, especially as most have very tiny homes, they buy fewer items. Americans like to have lots of stuff. These are two different ways of living a capitalist/consuming society -- and in one, it should be noted, a lot of it isn't produced in the home country anyway. And the American mania for cheap food has led to inappropriate foods being fed to animals so as to "grow" them (corn being fed to cows, for example) and lots of chemicals being used. Is this really healthy or even delicious? Not really.

[Jane in NC]

Not an economist nor a person with answers to economic questions. But like you I was intrigued by Julie's thread which is perhaps why a recent Planet Money blog entry was so fascinating to me. "What America Buys" can be found here. If you scroll past the first diagram, you'll find a comparison of American spending patterns from 1949 and 2011--a good comparison in light of Julie's thread. What is clearly obvious is how Americans today spend much more on housing. What is not so obvious is mentioned at the end of the article.

 

In 1950, the average new house was less than 1,000 square feet; in 2000, the average new house was over 2,000 square feet.

 

We have supersized in more ways than one.

[Jane in NC]

However being a consumer society doesn't mean "buying random junk" all the time. In Japan, for example, citizens buy stuff -- but they demand higher quality items and, especially as most have very tiny homes, they buy fewer items. Americans like to have lots of stuff. These are two different ways of living a capitalist/consuming society -- and in one, it should be noted, a lot of it isn't produced in the home country anyway. And the American mania for cheap food has led to inappropriate foods being fed to animals so as to "grow" them (corn being fed to cows, for example) and lots of chemicals being used. Is this really healthy or even delicious? Not really.

 

In complete agreement with Stripe. I want to add though that in today's economic models, it seems that labor is completely undervalued. Even so there are a few people who are content to do with less and pay living wages or pay for higher quality goods. Case in point: I pick up my first CSA box of the season. The veggies might be initially cheaper at the big blue box but whether they would be as tasty, last as long as my freshly picked items or be as nutritious is questionable. And I like knowing my farmer by his first name.

 

Planet Money which I mentioned in my previous post has been commenting on the micro entrepreneurs that are springing up now as people start making stuff again. Getting rich may not be the ultimate object of many of these start-ups. Having a meaningful life is entering the equation for some.

[nono]

Well I see "consumerist" and "capitalism" as two separate things. For capitalism to work its best, one needs thinking, responsible individuals all through the process. So, consumers would thoughtfully consider their debt, their food choices, etc. The individuals in the companies do their best at bringing forth the best products/services without cheating (others/environment/etc). The governments sets the rules (doesn't get in the game!) so that both sides are treated as fairly as possible. When either side of the equation, the companies or the consumers, cross the line from thoughtful offerings/purchases, they push into a "consumerist" mentality. This can't be sustained long-term, so a necessary contraction will happen after the unsustainable expansion. All of this will still work out if the capitalist society allows its government to tweak the rules to help out the ninnies who can't get it right on their own :D. BUT, if the government starts getting in the business and providing artificial alternatives, it really interferes with natural market processes.

 

I'm not anti-government. But I really wish we had a government that had its first priority of being rule-setters for a fair game, so that all could reasonably participate in the capitalist system, including making some mistakes along the way, and allowing for the system to inflict some pain for bad mistakes.

[melissel]

Well I see "consumerist" and "capitalism" as two separate things.

 

This is where my thinking is right now. I never thought of giving up on capitalism. I don't think there's a better model out there, really. But I feel like we're teetering at the top of this huge pile of STUFF that we all must keep buying to keep the economy going. If no one's buying the stuff anymore, there's going to be economic collapse.

 

I guess I'm wondering if there's away for us to move away from this crazily consumption-oriented society where we buy anything and everything and have no savings and too much debt and our government exhorts us to help the economy by buying even more. Is there a way to do this without economic collapse? Without decimating all those jobs related to the transportation, marketing, and sales of all that stuff we don't need and shouldn't be buying, and won't have the money to buy soon anyway? (This is the stuff I sweat over as I lay in bed late at night :001_huh:)

[stripe]

We have supersized in more ways than one.

What's really striking is the giant houses -- where maybe the family (or single adult) has one kid, and no one is ever home anyway! Whereas when my mother was a kid, people with three or four kids had three bedroom homes with one bathroom, typically, not six bedroom houses. For that matter, my grandma shared her bed with multiple siblings growing up (in the US), staggered (so she says) so that some slept with their feet by the others' heads. She now lives alone in a house with two bathrooms.

 

I saw a program on Oprah years ago, with a single mother who kept saying how she wants to give her daughter everything. She leaves the house to go to work (it's a long commute because of living out in the suburbs) before the girl woke up in the morning; the girl ate by herself and put herself on the bus. The girl then came home to an empty house. The two of them spent almost no time together, and the mother certainly didn't spend much time at home. It struck me as a tragic interpretation of the "good life."

[Mama Geek]

Have any of you guys heard of HS Dent? He has theories based mostly on looking at population sizes over the course of history. He is predicting a big period of deflation due to the aging population of this country. They will be down sizing homes, not buying nearly as much, and so forth. I am not saying that he is right but it is an interesting theory.

[MamaBearTeacher]

What if the capitalist economy was based more on services and less on goods?

 

Is there a modified version of capitalism that might work?

 

While most people have bigger and bigger houses and more stuff I do see a trend where people are interested in downsizing and living more frugally even when they can afford not to financially. What if this trend continues? Will it necessarily hurt the economy?

[Kirch]

That's why I used non-fiscal measures. We eat better. We live longer. We consume more medical care. We live in larger, more comfortable houses. Even members of our society with negative net worth are eating better, living longer, and consuming more medical care than our great-grandparents did.

 

I get what you're saying, I just don't agree that a better quality of life equals "more rich." Yes, overall we are better off, but I guess I understand the phrase "more rich" to mean "higher net worth." There are plenty of prisoners in the US who eat better and have access to more entertainment/medical care/higher education opportunities than some of the poorer citizens of the US, but I wouldn't say they were richer. Unless you are actually fully funding your better lifestyle, I don't think you can say living that way makes you more rich than previous generations. Easier/better quality of life? Maybe. I just don't see how someone could be considered rich if they're in debt to live that way.

[stripe]

That's why I used non-fiscal measures. We eat better. We live longer. We consume more medical care.

Consuming more medical care is not always a great thing, frankly. For one thing, a healthy person doesn't generally require much. Additionally, I think most people would rather avoid diabetes, or have less invasive treatment, than, say, getting a lot of limbs amputated. Ditto for constant dialysis. I also think more interventions in labor and a high rate of c-sections such as is now the state of affairs, is too much of a good thing. Yes, it's certainly good not to have laboring women languishing away or bleeding to death after birth, BUT that doesn't mean everyone needs a c-section. Also given that most health care is given out in the last 6 months of life suggests there is a problem here.

 

We live in larger, more comfortable houses. Even members of our society with negative net worth are eating better, living longer, and consuming more medical care than our great-grandparents did.

What is a person with "negative net worth"? I know a great deal more "middle class people" with mortgages and car loans than "poor people" with all those associated debts. Frankly, I think there has become too great a willingness to forget what a debt is. The idea that one "owns" a home/car/furniture/electronic item despite not having actually paid for it yet, is interesting to say the least.

[justamouse]

Small is Beautiful.

 

 

Small is Beautiful is the perfect antidote to the economics of globalization. As relevant today as when it was first published, this is a landmark set of essays on humanistic economics. This 25th anniversary edition brings Schumacher's ideas into focus for the end-of-the-century by adding commentaries by contemporary thinkers who have been influenced by Schumacher. They analyze the impact of his philosophy on current political and economic thought. Small is Beautiful is the classic of common-sense economics upon which many recent trends in our society are founded. This is economics from the heart rather than from just the bottom line.

[justamouse]

I'm not anti-government. But I really wish we had a government that had its first priority of being rule-setters for a fair game, so that all could reasonably participate in the capitalist system, including making some mistakes along the way, and allowing for the system to inflict some pain for bad mistakes.

 

Nono for President. :001_smile:

[mommaduck]

Yes! Google Lester Brown and read his books. He's an economist and a McArthur Genius Award recipient who argues for a "steady state" economy that does not rely on constant growth, which is, of course, unsustainable anyway. He writes a lot about environmental issues, but it dovetails with what you were asking about. I think he wrote a book called "Steady State Economy" that specifically addresses the new economic paradigm where growth isn't required for health.

 

Edited to clarify that he may not be an economist - just looked up and I think he's more environmental activist, but I don't have time to fully refresh my memory. But he does address exactly what you were asking.

Looked them up. There is an actual "center for" site. They strongly believe in population control :glare:

[NASDAQ]

Consuming more medical care is not always a great thing, frankly. For one thing, a healthy person doesn't generally require much. Additionally, I think most people would rather avoid diabetes, or have less invasive treatment, than, say, getting a lot of limbs amputated. Ditto for constant dialysis. I also think more interventions in labor and a high rate of c-sections such as is now the state of affairs, is too much of a good thing. Yes, it's certainly good not to have laboring women languishing away or bleeding to death after birth, BUT that doesn't mean everyone needs a c-section. Also given that most health care is given out in the last 6 months of life suggests there is a problem here.

 

We live longer. It's hard to argue with that. Dying young is generally inexpensive. We are also much more likely to deliver our babies alive. The country most lauded as having the lowest c-section rate, the Netherlands, is significantly more likely to lose a baby in birth than the United States or (iirc) Canada.

 

What is a person with "negative net worth"? I know a great deal more "middle class people" with mortgages and car loans than "poor people" with all those associated debts. Frankly, I think there has become too great a willingness to forget what a debt is. The idea that one "owns" a home/car/furniture/electronic item despite not having actually paid for it yet, is interesting to say the least.

 

Legally you own the mortgaged house. Negative net worth would be when you owe more than your assets are worth. This would be uncommon in a mortgage situation (though significantly more common in the US in the last few years) -- referred to as being "underwater." Generally a mortgage is for less than the house.

[nono]

Nono for President. :001_smile:

 

Could never happen. I make Gov. Christie look like Mr. Congeniality.

[melissel]

Could never happen. I make Gov. Christie look like Mr. Congeniality.

 

Well, then, I have just the campaign song for you:

 

[justamouse]

Could never happen. I make Gov. Christie look like Mr. Congeniality.

 

:lol:

 

It's a NJ trait.