The Link Between Consumerism And Productive Societies

Consumerism is seen as a negative trend in most of today’s society. Because the behavior is associated with being pretentious, greedy, or even mindless. It doesn’t uphold the values of modesty and generosity. “Don’t buy what you don’t need.” is what most people would think when confronted with consumerism.

But what I would like to acknowledge is the fact that consumerism correlates with an important societal trait — Productivity. There is an interesting link between the two, sometimes even complements each other. To make my stance clear I am not advocating consumerism nor am I stating productivity is the causation of consumerism.

A Brief History of Consumerism

The term Consumerism began to be used regularly in the 20th century. With the industrial revolution taking place more goods were created which eventually led to overproduction. The excess of goods prompted manufacturers to persuade the market and manipulate consumer spending.

In the years after the end of World War II, the Americans found themselves with fewer consumer goods around because of the war production put in place. Job opportunities were available, wages were higher, this led to the rise of the purchasing power parity of the Americans. The American economy rose and it brought upon a moment of prosperity to the populous.

With more money and goods in circulation, more Americans started buying items that would help them in their lives. Appliances to the home were the justified reason for an increase in everyday spending. It gave rise to what today we see as American consumerism.

Though this isn’t necessarily bad since it helped the population modernize. Everything was within economic reach, the quality of life was as high as it ever been. America was at its peak.

Americans have risen out from a production society to a consumeristic society, while old generations will save the 1950s was a period where people started to consume and throw away. The abundant resources made consumerist behavior untenable, to put in perspective Americans only counted for 6% of the entire world population but they consumed 30% of the world products. Meaning Americans consumed five times more per person.

Now, this article isn’t meant to be a blow to the American consumeristic culture, rather I wanted to make a brief explanation of how consumerism started and how it has been correlated to productivity in the past. American history was just the perfect example.

How Productivity Fits Into All of This…

Wait, but how does productivity fit into the equation? Where is the “link” that I speak of? Well, productivity is related to a nation's economic growth. Essentially the more productive a society gets the more purchasing power they will have, thus the better quality of life they can have. Which leads to more productivity.

The Mindset of a Productive Individual

So, imagine it like a snowball rolling down a hill. Better productivity leads to a better quality of life which then leads to more productivity. How does this work exactly? Let’s say you’re an entrepreneur living in the states. You work 8 hours a day for five days, sometimes even six. You have this crazy schedule every day that you don’t even have time for yourself sometimes.

But you can’t live like that, you have cleaning to do, dishes to wash, cars to maintain. Spending more time doing chores limits the time you have to be more productive as an entrepreneur. So what could you do? To help yourself save time you bought a dishwasher, to help you clean your house you buy yourself a vacuum cleaner.

Now you have more time, but some time in your career you again have put yourself through more work than you can imagine. Sure, you are super productive but it results in you neglecting yourself. Then comes the service economy, this is where things get very interesting.

So, you call this guy that will clean your house for you, fix your car for you, and even wash your dishes for you in the dishwasher. Alright, although you might think I am exaggerating this is the basic idea of service as a product. You alleviate other people’s stress in return for money. People have made videos about this, videos about why you should delegate more to get more value out of your time.

Innovation Can Also Lead to Consumerism

Innovation and productivity are intertwined, to say the least. As innovations are the direct output of our productive actions. According to an article by Harvard Business Review, there are 4 types of innovation: Sustaining Innovation, Breakthrough Innovation, Disruptive Innovation, and Basic Research. I am not going to go through all 4 categories, but I will highlight the most important ones. Mainly, sustaining and disruptive innovations.

1. Sustaining Innovation

Sustaining innovations are improvements that can be done to our current processes. Essentially these types of innovations exist because everyone wants to get better at their current markets.

2. Disruptive Innovation

Disruptive innovations focus on making or improving the things that we didn’t know we need.

But How Does Innovation Relate to Consumerism and Productivity?

The consumer market gets larger every year. As more people join the middle class more people are able to afford items that were previously economically impossible to attain.

Big tech companies such as Google and Facebook base their entire business model on advertising products for consumers. By utilizing user data that is collected through their products they can then target specific advertisements to consumers based on their behavior.

This level of advertising was so accurate it is unprecedented. There was no point in time that companies have any capability to target specific consumers of their respective niches. The type of innovation done by big tech can be categorized as sustaining innovation. These types of innovation improve upon our current understanding of marketing and human behavior but increased it to an unprecedented scale.

Another example of sustaining innovation is Amazon and e-commerce in general. Never before have people been able to buy things on mere impulse. It does help business, but it also complements our consumerist tendencies.

What about disruptive innovation? The most famous example of disruptive innovation is Netflix. Nobody knew they needed an online streaming service, now almost everybody can’t live without it.

The Argument Against Consumerism

Consumerism has had its fair share of critics over the years. Consumerism is sometimes synonymous with hedonism. The latter is oftentimes encouraged by extensive marketing campaigns to manipulate unsuspecting consumers.

Consumerism Preaches the Wrong Set of Values

Counter-arguments to consumerism usually espouse community and spiritual values. Some might go to the extreme and attribute consumerism as a social disease. I disagree with such an outlook because it probably is too radical. Sure, consumerism has its downsides, added with the technological advantage big companies have over us. But I don’t see it as a disease more than it is simply a misunderstanding on how to conduct personal finances.

Little to No Financial Education

Another problem I see with consumerism is mostly conformity. Peer pressure is real. When we see our friends being able to buy things and spend money they don’t have, we would have a sense of normalcy towards that kind of behavior. People should be educated to not normalize irresponsible spending.

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” — Will Rogers.

The Best Way Is Forward

Thus, I think the best way forward is to be more responsible with our spending. I am in favor of teaching monetary responsibility to children from a young age. The benefits of having those kinds of knowledge would help them differentiate between need and greed. As consumerism does not make people happier, in the words of a wise man “Mindless consumption always turns into excessive consumption.”.

I also prefer the mindset of being an innovative consumer, not only as a passive consumer. For example, an individual with the right amount of skills can make a product for themselves. By being able to add value to the resources available to them, it signifies that these people are fully functioning members of the productive society.

As I see it, the problem with consumerism is not necessarily with consumerism itself. But the problem is with financial education and the lack thereof.