Consumerism is an economic and societal way of viewing and understanding the economy, which focuses on the idea of the consumption of a steady supply of goods and services by the citizens of a given country. The consumption of goods and services by individual consumers helps drive the economic engine of a consumerist society in that it creates jobs for workers and wealth for businesses owners. While consumerism as an ideology can be present in several different types of economic systems, it is most often associated with capitalism. In particular, consumerism plays an important role in modern democratic countries with mixed economies such as: the United States, England, France, Canada, etc. Furthermore, consumerism is an important component of the concept of supply and demand because it involves the supply of goods and services and the demand (consumption) of goods and services by individual consumers. To fully understand the significance of consumerism as an ideology it’s also important to understand its development throughout history.
CONSUMERISM – HISTORY
While people across many different civilizations and time periods have always purchased and consumed goods, the modern concept of consumerism is best understood to have begun in the late 1600s in Europe. From that point, consumerism intensified throughout the 1700s and 1800s and became a major societal phenomenon in which the consumption of products became a vitally important task for most people in society. As stated above, consumerism is generally associated with the economic system of capitalism. As such, consumerism as an ideology emerged alongside capitalism and spread throughout Europe, North America and the rest of the world as capitalism became the dominant economic system on the planet. During the early years of the development of consumerism, two major historical events came to play an important role, which included: Industrial Revolution and the Age of Imperialism.
During the Age of Exploration, which occurred from the 15th to the 18th century, European explorers ‘discovered’ large sections of previously unknown (to Europeans) land, such as: the Americas, Africa, Australia, and parts of Asia to the far east. This exploration by the main European nations of the time eventually led to widespread colonialism throughout the newly explored regions. The European nations (especially England, France, Spain and Portugal) established colonies throughout these regions, which is often referred to as the Age of Imperialism. This process fed the European nations with huge amounts of raw materials from all over the world and helped increase the rate of consumerism in several ways. First, the raw materials fed the industrial factories in Europe and were used to create countless numbers of consumer goods that were then distributed throughout the world. Second, the vast colonies allowed the European nations access to large markets of people in which they could then sell their products. For example, several of the European nations established sugar or tobacco plantations throughout the New World. These sugar and tobacco plantations then produced sugar and tobacco (often with slaves from the Atlantic Slave Trade) for transport back to Europe, where the resources would be used to produce other products. The products would then be sold around the world in the many colonies controlled by the European nations, as well as in Europe itself.
The Industrial Revolution also played a major role in the spread of consumerism. It first began in the 1700s in England and soon spread to many other countries in Europe and North America. At its heart, industrialization centered on the use of capitalist economic policies that led to the emergence of many different factories and mines. As a result of the economic freedom of the time period, these factories were able to produce countless number of inventions and products on a mass-scale. Before the start of the Industrial Revolution, goods were produced in a system referred to as the ‘cottage industry’. This means that the goods were created on a small scale often in people’s homes. As a result of this method, goods were often unique in nature and were not produced in large numbers. The Industrial Revolution fundamentally changed this and instead caused factories to be located in cities and towns where goods could instead be produced on a mass scale. This abundance of new and cheap goods meant that there were many different and affordable products for people to buy. This led to consumerism because it created the system in which people could reasonably afford a variety of goods. As well, the wealth accumulated by the business owners of the time period allowed them the ability to afford many more goods and helped intensify the consumerist societies of the time.
Before the start of the Industrial Revolution, and during the Industrial Revolution, societies in Europe and the North America were divided by large income gaps. This means that some people, such as the business owners, were making large sums of money while other people, such as the working class, struggled to make ends meet. As a result, many people in industrial societies were poor and struggled to afford the basic necessities of life. However, as time passed and socialist values emerged to support the working class, a strong middle class of people emerged. These middle class people were able to afford better houses, education, and consumer goods. As a result, many historians consider the emergence of the middle class in Europe and North America as a major contribution to the intensification of consumerism. Because they had higher incomes, they could afford to buy more luxury items and therefore consumed more goods.
Consumerism further developed in the 20th century. For example, some people consider the 1950s and 1960s as the ‘golden age of consumerism’. During this time period, goods became much less expensive and some products were able to sell on a very large scale due to effective marketing campaigns. In general, marketing refers to the advertisements that companies produce to sell their products to a large audience. Marketing had always been a popular method of selling a good but the marketing campaigns of the 20th century became much more sophisticated. For example, many of these campaigns promoted a sense of identity in relation to their products and caused people to associate their social standing in society with their level and quality of consumption. This caused an explosion in modern consumption rates, as marketing is still an important consumerist tool in the 21st century.
Another important aspect of consumerism in recent years has been the concept of outsourcing. In general, outsourcing is when companies in western countries such as the United States and Canada send their manufacturing to other countries such as Mexico and China. Companies do this to lower the overall cost of wages when developing a product because workers in countries like China and Mexico will work for much smaller wages than similar workers in the United States and Canada. Outsourcing as a concept became popular throughout North America and Europe throughout the 1980s and continues still today. It is a very controversial process because some people view it as positive while others view it as negative. Those that view outsourcing in a positive light think that it keeps the cost of goods low and helps companies remain prosperous in a competitive economy. Whereas those that view it negatively think that outsourcing has caused a loss of manufacturing jobs throughout North America and Europe. Regardless, outsourcing helped to intensify consumerism throughout the world. First, it kept the cost of many goods low which allowed more mass production and distribution of consumer goods. Second, it caused other countries, such as China and Mexico, to develop their own consumerist societies which furthered the rate of consumerism on a global scale.
Today, consumerism continues to intensify with influential marketing campaigns, outsourcing, and a cheap and steady supply of both resources and goods.
CONSUMERISM – SIGNIFICANCE TO THE ECONOMY
The significance of consumerism lies in its strong influence on the economy and society. Economically, consumer spending is a major driver of growth for modern capitalist economies. When people buy goods and services, companies earn profits, workers get paid, and governments collect taxes. As such, this creates a cycle that keeps the economy active and leads to higher level of employment. Consumer demand also encourages competition and innovation, pushing businesses to develop better products, improve quality, and lower prices. For example, the demand for smartphones has led to continuous technological advancements, benefiting consumers around the world. However, it should be noted that economists have identified several positive and negative impacts of consumerism.
CONSUMERISM – NEGATIVES
In general, there are five main negative aspects of consumerism, including:
- Causes more pollution.
- A major contributor to resource depletion.
- Leads companies to develop low quality products.
- Promotes poor labor standards and pay for workers.
- Does not necessarily lead to increased happiness beyond a certain point.
The first main negative of consumerism as a system is that it can have devastating effects on the environment. As stated previously, consumerism developed and intensified alongside the events of the Industrial Revolution in Europe and North America. As part of this process, society shifted away from small home-based production to the factory system. The factory system is a term that historians use to refer to the development of centralized factories or mills that produced goods on a mass scale. These factories created large amounts of air and water pollution as a byproduct of the production process. As consumerism intensified throughout the 20th century pollution levels increased and spread around the world as factories moved to parts of Asia. Also, another effect of consumerism is the amount of waste or trash it produces. For example, it is common for the packaging of a good to be immediately thrown into the trash after the consumer has opened the product. As a result, modern societies have struggled to deal with the large amounts of waste produced by constant consumerism. This has led to incinerators (burning of trash) and large landfills (burying of trash) which caused further pollution of the environment. Therefore, consumerism has led to a polluting of the environment and has cost society in environmental loss of expense.
The second main negative of consumerism is resource depletion. Simply put, resource depletion refers to the idea that human beings are using up the resources on the earth as an ever increasing rate such that we will ‘deplete’ or completely use up some resources. This issue is related to consumerism because the creation of goods and services is using up some resources on the earth at an incredibly fast rate. This is due in part to the increased rates of consumption throughout the last century, especially in consumerist societies in Europe and North America. An example of resource depletion is the over use or overfishing of fish in the oceans. Due to a range of different issues, among which over consumption is one, large fish in the world’s oceans are depleting at a very fast rate. Some studies claim that there will longer be any large fish in the world’s oceans by the midpoint of the 21st century. Therefore, consumerism is putting immense pressure on the environment and the resources that human beings depend on.
The next major negative impact of consumerism is that it has led to the creation of low quality goods. Consumerism is a common attribute of societies based entirely or partially on the principles of capitalism. For example, the capitalist principle of competition is vitally important in a consumerist society. It promotes the idea that companies should compete with one another in the production and sale of their products. As such, this competition pushes companies to offer goods as lower prices than their competitors. In order to do this, many companies have lowered the quality of the products. Further to this idea, modern companies practice a technique called ‘planned obsolescence’. In general, planned obsolescence is best understood as products that are designed to fail. Modern companies do this to encourage consumers to repurchase a product over and over again. As such, some modern products are designed with short lifespans with further intensifies the pollution and resource depletion discussed the in the previous paragraphs.
The fourth main negative impact of consumerism is that is leads to low working standards and pay for workers. Similar to the last paragraph, consumerism leads to competition between companies. This competitive drive between companies causes them to seek ways to decrease the price of their products. One of the ways that companies do this is by outsourcing their manufacturing to other countries, usually in parts of Asia. In general, outsourcing is when companies in western countries such as the United States and Canada send their manufacturing to other countries such as Mexico and China. Companies do this to lower the overall cost of wages when developing a product because workers in countries like China and Mexico will work for much smaller wages than similar workers in the United States and Canada. Outsourcing as a concept became popular throughout North America and Europe throughout the 1980s and continues still today. This is negative because it causes people in North America to lose their jobs while also promoting low paying jobs in other parts of the world. Some of the manufacturing jobs in Asia are often criticized for containing long hours, dangerous work and little pay. This means that consumerism promotes poor working conditions for some people while causing others to lose their jobs altogether.
The final main negative aspect of consumerism is that it does not necessarily lead to higher levels of happiness for people. In general, consumerism as a whole has increased the standard of living and quality of life for many people, and therefore has increased happiness levels. However, some researchers have suggested that beyond a certain point consumerism cannot increase happiness forever. For example, they point to the fact that consumption has increases dramatically throughout the 20th century but happiness levels have remained relatively stagnant. As such, when consumerism is dealing with a person’s basic needs (food, shelter, clothing) it increases happiness but beyond that it has a much less impact. This evidence suggests that ever-increasing consumption does not make us happier and may actually decrease our quality of life with the increases in pollution and resource depletion.
CONSUMERISM – POSITIVES
In general, consumerism has five main positive elements, including:
- Increases economic output and creates jobs.
- Leads to increases in wealth for companies.
- Promotes competition between companies.
- Allows for a large variety of goods and services.
- Improves the quality of life for people.
On the positive side, economists consider consumerism to be important to the development of the economy on both a national and global level. At its heart, consumerism is the idea that people buy goods on a mass scale from producers (business owners). This system is vitally important to the economy because it is a major factor in job and wealth creation. For example, in a consumerist society, the constant consumption of goods provides many different people and industries with jobs. This includes the people who own the businesses that produce the goods as well as the people who work directly in the design and manufacturing of the specific product. These people could include factory workers, engineers, advertisers, etc. As well, there are many secondary (not directly related) jobs created in transportation and construction. More specifically, since many of the current goods are manufactured in places such as China and sold in North America and Europe, there are many people needed to ship the goods by sea and then over land. Furthermore, the expansion of large businesses creates construction jobs for people as they build warehouses and stores for the products. This job creation is important because it is the major factor of economic well-being in a consumerist society. For example, the jobs created from consumerist activity is an efficient means of distributing the wealth through society as it passes from the consumers to the producers and then to the workers.
The second positive element of consumerism is that it is generally beneficial to businesses and can lead to a large accumulation of wealth for the business owners. For example, throughout the 20th century many major transnational corporations have developed due to consumerism. These types of companies operate around the world with their manufacturing, distribution and sales all occurring in many different countries. As a result of this growth, some transnational companies have been able to accumulate large amounts of wealth. Some examples include Apple, Walmart, Nike, etc. Therefore, consumerism has been beneficial to the growth of businesses and the overall economy. It has created a system that promotes the growth of businesses which in turn arguably creates jobs and wealth for the rest of society.
The third positive element of consumerism builds off of the growth of businesses. While consumerism had helped businesses to flourish, it has also led to competition between the differing companies as they compete for sales in the economy. Competition is a key factor in economics and is a central principle in right-wing economic systems such as laissez-faire capitalism and free market economies. Laissez-faire capitalism, which emerged in the timeframe of the Industrial Revolution, introduced the idea that individuals and businesses should compete against each other and their success should be determined by the market forces of supply and demand. Therefore, consumers had the ability to decide the success of a business based upon whether they purchased the good or service. Laissez-faire capitalists argued that competition benefited society in a number of ways, including: it lowered the price of goods and service as producers competed for the business of consumers, and it fostered innovation of goods and services as companies compete to outdo each other. For example, modern companies such as Apple and Samsung compete for consumers’ business which causes them to innovate their phones with new features, while still trying to keep costs as low as possible.
The next main positive element of consumerism is related to the previous one in that the system of competition that led to constant innovation among companies also led to the development of a large variety of goods and services. As consumerism intensified throughout the 1800s and 1900s it led to an explosion of new and different products and services that were available for consumers. Because companies were competing with each other this led them to constantly seek new ideas for their products. As a result, people today have many options available to them in relation to their own level of consumerism. This has arguably benefitted the lives of people today in a variety of ways, including standard of living. In general, standard of living refers to the variety and amount of goods that a person has available to them. A person with a high standard of living generally has the ability to purchase many different types of goods and services, while a person with a low standard of living does not. Countries based on consumerism (such as the United States, Canada, Britain and France) generally have the highest standard of living levels in the world. The people in these countries benefit not only from having access to luxury items (such as phones, electronics and household items) but they also benefit from the consumerist impacts on services such as healthcare and education. Therefore, consumerism allows people greater access to the goods and services that improve their lives.
The final point for the positives of consumerism is that it generally increases people’s quality of life. Quality of life is a measurement of a person’s happiness in regards to having their basic needs met. As stated above, consumerism is vital in helping people meet these needs. For example, consumerism has created a process by which people can access different goods and services related to fulfilling their basic needs, such as: food, clothing and shelter. By helping people meet these needs, consumerism has improved the lives of many people.
