Is consumerism bad?

     Ellen Goodman, in her 12/15 column (here’s a LINK to it), is one of those rejoicing that materialist consumerism, at which they’ve always sneered, is falling victim to the recession, as people cut back spending. They applaud this as a simply wonderful retrenchment, a return to sanity and virtue.


         But why are we in a recession? Because people are cutting back spending. None of the other factors would actually cause a recession if they weren’t causing spending cutbacks. When people buy less, businesses need to produce less, so they need fewer employees. So people lose their jobs; then they too will spend less; so then even more people lose their jobs. And Ellen Goodman thinks this is a good thing?


         “Materialist consumerism” is people buying stuff that other people think they shouldn’t. But a free society has to mean people pursuing happiness by doing things–like spending their own money as they choose–that others disapprove. Some social critics just hate this. They’d prefer it if right-thinking moralists like them got to tell everyone else how to live.


         Such people, like Goodman, do believe that an economy based on consumerism is somehow an offense against virtue. But what else, actually, could any economy be based on? The “economy” means you produce goods and services that I buy, and I produce stuff that you buy; which makes us both better off. That production of things people want is the source of all wealth and income, our entire standard of living. It doesn’t come from heaven, or “society,” or government. You may sneer at consumerism, but you don’t want consumers to stop buying what you yourself are employed to produce; you’d be out of a job. And if all consumerism stopped, we’d all be out of jobs.


         A fine virtuous society we’d have then. 


11 Responses to “Is consumerism bad?”

  1. Therese Says:

    Happy New Year, Frank!

  2. PREETESH Says:

    i understand wat u r saying but currently people dont have enough money to spend.. so r u saying that they spend even the little amount that is left with them ?? so this is kinda paradox!!

  3. Scott Perlman Says:

    Preetesh, you ask a question if this is a paradox. Keynes would say so and called it the paradox of thrift or the paradox of savings. This paradox states that if we all saved money during “bad times” total demand will fall and, in turn, lower the actual savings for everyone. The argument is that if everyone saves, consumption decreases resulting in a reduction in economic growth. An example of this phenomenon would be Japan over the last several decades. Their internal rate of savings restricted their economic growth.

    Wikipedia’s overview does a decent job explaining this so I will quote it. (
    “The argument is that, in equilibrium, total income (and thus demand) must equal total output, and that total investment must equal total saving. Assuming that saving rises faster as a function of income than the relationship between investment and output, then an increase in the marginal propensity to save, all other things being equal, will move the equilibrium point at which income equals output and investment equals savings to lower values.
    In this form it represents a “prisoner’s dilemma” as saving is beneficial to each individual but deleterious to the general population. This is a “paradox” because it runs contrary to intuition. One who does not know about the paradox of thrift would fall into a “fallacy of composition” wherein one generalizes what is perceived to be true for an individual within the economy to the overall population. Although exercising thrift may be good for an individual by enabling that individual to save for a “rainy day”, it may not be good for the economy as a whole.
    This paradox can be explained by analyzing the place, and impact, of increased savings in an economy. If a population saves more money (that is the marginal propensity to save increases across all income levels), then total revenues for companies will decline. This decrease in economic growth means fewer salary increases and perhaps downsizing. Eventually the population’s total savings will have remained the same or even declined because of lower incomes and a weaker economy. This paradox is based on the proposition, put forth in Keynesian economics, that many economic downturns are demand based.
    Non-Keynesian economists criticize this theory on two grounds. First, if demand slackens and prices fall, the resulting lower price will stimulate demand, which tends to limit the decline in demand. Second, and perhaps more important, “savings” represent loanable funds; an increase in the supply of loanable funds tends to lower interest rates and stimulate borrowing, and so a decline in consumable goods with a short time horizon is offset by an increase in production in sectors with longer time horizons. The demand for personal electronics, as an example, may decline, but the demand for such things as real estate may be stimulated by favorable borrowing conditions.”

  4. Gregory Kipp Says:

    Isn’t this another case requiring balance, as I keep arguing for many problems facing todays world. Consumerism isn’t bad or evil per se, it’s the excesses that cause problems. When people consume just so they can keep up with the “Jones’, or if they over consume because the purchase of an item brings temporary happiness like a drug, but they need more once the high recedes; or when people over consume and create economic bubbles such as happened recently with the housing market; or they charge all their purchases on credit cards and end up in financial trouble with huge credit card debt at outrageous interest rates.

    Let’s face it, excess of anything, including consumerism can be bad. But people have to consume. It’s a question of balance.

  5. Kat Says:

    OMG I totaly agree with this! you just helped me with my school paper
    and here I thought I was the only one thinking about the big picture

  6. rationaloptimist Says:

    Hi Kat,
    Thanks for your comment. Tell me who you are and about your paper!

  7. Kat Says:

    I go to Saint Martin de Porres, I’m a senior. We are writing a paper on “Is consumerism a bad thing.” It’s for my religion class (ewww) but anyways, I’m probably one of the only people thinking that it isn’t a bad thing a people are only looking at the negative instead of the positive.

  8. world cities Says:

    Happy New Year, Frank!

  9. Hans Says:

    Perhaps the ‘basic’ notion of consumerism in a more pure and unadulterated form may not be so vile. What is rather ridiculous and repugnant is the idea of producing things FAR in excess of true need, thereby creating excess waste, pollution, and taxing the earth’s resources. then too, there is the rather idiotic idea of producing things that are essentially made break and throw away, which is an insult to decency AND to the planet we live on. I believe if a thing is to be made then it out to be made to be the very BEST it can be, to provide the longest possible use and re-use. That would be the most sensible and respectful and rational. People in Cuba still drive old DeSoto’s – they rebuild them. WE should ALL be doing that too. I think the only reasonable thing we can do is to improve things – so that they last longer , are more efficient, save more energy and use fewer resources overall. To “do” things simply for the purpose of providing employment and generating an income seems vapid, if not completely inane. we could get by with far less and have a MUCH higher quality of life. I’d like to see the elimination of the use of ‘chemicals’ altogether except where deemed absolutely necessary. nature should be held in greater reverence – without it – we are nothing

  10. rationaloptimist Says:

    Dear Hans Thanks for your comment. I agree that “To “do” things simply for the purpose of providing employment and generating > > an income seems vapid.” Products and services should be produced > because they satisfy human needs. That is how wealth is created. > Otherwise, consumption of labor and resources is indeed wastage. Regards Frank

  11. Scott Perlman Says:

    To your first point I fully agree. Producing anything to excess is waste.
    Your next point is unclear. You state that “producing things that are essentially made to break and throw away…in an insult to decency and to the planet we live on.” You then state that if something is to be produced, it should be made the best that it can be and reused. Your conclusion is that this would always be the most sensible and respectful and rational.
    If I understand you correctly, you are condemning any product that is disposable. In addition, you are also concluding that you cannot optimize the production of anything that is disposable because your definition requires it, first, to be reusable.
    While I appreciate the point you are attempting to make, your statement’s absoluteness makes it patently false and detracts from a decent concept. Let’s take your Cuban Desoto as an example. A properly maintained durable good can be made to last a very long time. However, is that really optimal? If we all continued to repair our “Desoto’s” (and “Desoto-like cars) there would be a significant number of low mileage, leaded fuel consuming autos that had marginal safety standards. They would have no air bags, no antilock brakes, and emit higher level of toxic fumes than current models. The unintended consequences of this could be that more people would die. Some of these people who die could have been the one(s) that solve the answer to cold fusion or find the cure for cancer. So I do not agree that, as you say, “we should all be doing that too (rebuilding our Desoto’s).
    You then state, “I think the only reasonable thing we can do is to improve things – so that they last longer , are more efficient, save more energy and use fewer resources overall.” While I cringe with your qualifier that this is the only “reasonable thing” nonetheless, I agree with the intent of your statement. We should strive to make things better. Period.
    Your statement that we could get by with less and have a higher quality of life is again, a gross overstatement and one that places your sense of right as a standard for all. I may be happy consuming more than what you need to consume to make you happy and that is not only all right, it will actually improve life for all. I will work harder and become more innovative to improve my productivity and allow me my “excess” (your words, not mine) consumption. In so doing I will drive down the costs and improve the products that will make your life better, even if you only use half as much of them.
    You conclude with a statement that is so bizarre that a rational response is a challenge. You state, “I’d like to see the elimination of the use of ‘chemicals’ altogether except where deemed absolutely necessary. Nature should be held in greater reverence – without it – we are nothing”
    Who decides where the use of chemicals is absolutely necessary? And eliminating them completely is just plain silly. I could list many uses of chemicals that would make total sense to you. Does that mean I do not think we should respect nature? Of course not. As a tip of my hat to our blog’s host, we must be rational in our ideas, attitudes and actions. I believe a rational statement that would be supportive of your positions is as follows:
    Producing anything in excess of demand is waste and as such, we should continually strive to match output with real need. Products that are produced should be made as durable as practical and we should always take into consideration the holistic cost to society of its production. Finally, we should always strive to minimize the irreversible harm our existence causes to our planet.
    Now there is a statement I can support. Of course, given that I wrote it, is that such a surprise?

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