consumerism Archives - Ameritecture

Crisis & Liberation: Toward a New Prosperity

British economist John Maynard Keynes warned in his thesis of the “Paradox of Thrift” that if everyone started to save more during an economic recession, a commensurate drop in aggregate demand would actually result in a drop in aggregate savings making everyone worse off. But his thesis doesn’t consider the social and political effects of crisis—of the psychosocial dynamics that also offer the prospect of liberation. His thesis, like those of today’s economic gurus who proclaim econometric prescience may fall victim to an aggregate yawn. Regardless of whether we save more or less, or if the economy rebounds quickly or slowly—or at all—we may all be better off if we embrace the opportunity crises provide: liberation.

If crises accomplish nothing else, they bring to question all the givens—the assumptions that prevailed pre-crisis. They offer an opportunity to cleanse us of beliefs and behavioral norms that rose to prominence not on the backs of principle, but on the exhilaration of deception. The promise of a benevolent technocracy that would assure everyone a piece of the American dream, and the continued benign and covetous admiration of the world are over. The no-money-down McMansions are an artifact that will make cultural anthropologists giggle for many years to come. Our challenge is to find and exploit the silver lining of crisis and affect our liberation; to stop praying at the altar of spending. To step off the treadmill of consumerism and pursue dreams that mean something. To thumb our nose at Mr. Keynes and move on.

This anti-consumerism notion, blasphemous though it may be, could be just what America needs. We may actually win our future back. On the domestic side, we might learn to enjoy the experiences of life, rather than worship the banality of false prosperity. While GDP and taxes would fall, it may finally reign-in our useless elected leaders who continue to spend money we don’t have while lining their pockets with lobbyist’s ‘appreciations.’ Families may have to take care of their own, rather than point their finger at the government. We may have to participate in the education of our children, while schools return their focus to core subjects and away from stylized babysitting programs. We may have to banish our sense of entitlement and replace it with the principles of equity. In short, we may have to become stronger individuals, closer families, and more effective communities.

On the global front, can you imagine the hue and cry from countries like China if the American consumer found greater happiness in less stuff? Can you imagine a world where Americans consume less fossil fuel? We would stop funding our enemies, while improving both our environment and health. Do we really believe that the rest of the world would stop adopting (and/or pirating) our inventions? What if we brought our troops home and decided to reduce our global military footprint? Would we be worth hating anymore?

It’s time to pursue liberation—to question the givens and turn those away who leverage our future with a kaleidoscope of deceptions. To honor our capitalist heritage and allow creative destruction room to work. Isn’t it about time we freed ourselves to apply our unique skills and make something new—something truly great? Crisis and liberation allow us to craft a new perspective and a new, more resilient, identity that just might make us stronger, happier, and yes, even more powerful. Let’s not let this opportunity pass.

The Spending Myth

In George Cooper’s The Origin of Financial Crises: Central Banks, Credit Bubbles and the Efficient Market Fallacy, he credits a relatively prolific Norwegian-American economist, Thorstein Veblen, for coining the term “conspicuous consumption.” Veblen studied the “leisure class” at the turn of the 20th century and used the term to identify markets where demand actually increased as price increased for the same amount and quality of goods—suggesting that markets were, perhaps, far from perfect. He was one of the first to suggest that the tidy models of economic behavior were false; they ignored man’s capacity to make irrational choices—an appetite of irrationality that would prove insatiable and cause Federal Reserve Bank Chairman Alan Greenspan (many years later) to, reluctantly, warn of “irrational exuberance.” Of course, this irrationality was largely contained in Veblen’s day by the small number of people who had the financial capacity to behave irrationally, ergo the “leisure class”—a pleasing term for those with more money than sense. But that would change.

As the 20th century unfolded and American power expanded after each of the first two World Wars, the numbers of those reaching a level of affluence rose steadily together with a hubristic claim to perception of value defined more frequently than not by price. More people had more money and, therefore, the capacity to make irrational assessments of price and value. We segued from “conspicuous consumption” to “Keeping up with the Joneses,” a phrase originated by Arthur R. “Pop” Momand in a comic strip of the same name in the latter years of World War I. The expansion of the “leisure class” meant our answer to the question, “What is wealth?” would be defined not by savings or investment—by Robber Barons’ tally of track miles or oil wells—rather, by consumption.

Cultural anthropologists must salivate about where we are today. They have more than one hundred years’ evidence of our ingenuity and stupidity. A perfect storm of brilliance and madness, frequently quelled by theological innovations replacing Calvinist notions of sacrifice with televangelist’s promotion of prosperity as the new benchmark of piety. We traded the Sermon on the Mount (Matthew 5) for Luke’s prescription to enjoy the fattened calf (Luke 15:23). Let the feast begin! We embraced consumption—how much we spend—as the definitive yardstick of wealth. No money? No problem; just charge it. In doing so we placed our future in the hands of those who find value not in price, but in our debt. We tethered the future of our children and grandchildren to a pirate ship. We are betting on mercy where ingenuity and innovation once stood. We have succumbed to our perversion of price and value.

This is the unique, albeit shameful legacy of my generation, of those who rose to the challenge of Sputnik; found freedom at Woodstock; and embraced the alchemy of Reagan, swagger of Clinton, and hubris of Bush. Our masterpiece of contrivance was papering the world with ether-backed credit default swaps—vapor paper—trillions of dollars of securitized myth that makes Bernie Madoff look like rounding error. Our current prescription? Spend more! We continue to measure our prowess by total spending rather than savings and investment. Our military is presumed to be most powerful because we outspend the rest of the world, combined. Yet, suicide bombers and improvised explosive devices bring us to our knees. We believe we have the greatest healthcare and education systems because we spend more than anyone else, while forty-plus million go without care and our high school rankings in math and science plummet. Every data point we stare at to forecast an economic recovery is fathered by spending. As the economy sputters, we contemplate more “stimulus.” After all, it got us where we are and that can’t be all bad, right? Wrong.

It is time to straighten the irons. It is time to change the discourse of wealth. It is time to return consumption to the altar of avarice and rebuild America. It is time to save, invest, and yes, sacrifice. Wealth enables spending; spending does not create wealth.