Consumerism and the denial of values in economics

Neva Goodwin

Extracts from a paper by Neva Goodwin [1] were recently reported in Real World Economic Review blogs on 31 July 2021 [2]. These are the six extracts:

1. “ Twentieth-century economics pretended to be a value-free science. Among the values in fact adhered to and promulgated are two that turn out to be especially problematic: the goal of economic growth, and the elevation of consumerism. Growth is a macroeconomic issue, while consumerism plays out on the micro scale of individual motives, choices, and actions. Mediating between these are business enterprises, especially corporations. These are the actors whose interests are served by the promotion of consumerism and the belief that economic growth is good – indeed necessary – for everyone. ”
2. “ A culture of consumerism is one in which individual identity, self-respect and social position are strongly tied to the purchase of marketed goods; spending money is seen as a pleasurable and desirable end in itself; and there is encouragement for the belief that the purchase and use of high-end goods, in particular, will bring happiness. In the modern culture of consumerism, emanating from the United States but spreading widely throughout the world, the motivation for firms to sell what they produce has become a – perhaps the – great driver of economic behaviour. There are two major problems with a culture of consumerism. One is that such a culture appears to detract from overall well-being. The other is that it is hard to restrict growth in a culture oriented toward purchasing. ”
3. “ Economists often say – and the rest of the world has believed them – that the only alternative to economic growth is economic collapse. As an example, growth was seen as so essential that, in order to sustain the consumption bubble of the 1990s and the early 21st century, Federal Reserve Chairman Alan Greenspan felt it necessary to lower federal interest rates nearly to zero. Consumers were encouraged to borrow money on the basis of inflated house values, so as to be able to spend beyond their incomes. It became evident that the consumption bubble was unsustainable when it turned out that the value of many capital assets was to a considerable extent fictional.”
4. “ In contrast to the economic assumptions and promotion of ever-increasing growth and consumption, another discipline – ecology – teaches us that, in a contest between finite nature and endless economic expansion, humanity will inevitably be the loser. The reality of climate change is beginning to force a recognition that many aspects of our existing economic system are unsustainable. ”
5. “ Economists may point out that the literature in 20th-century economics includes many refinements – that the summary of the values embedded in 20th century economics just offered is far too simplistic. I would respond that the values cited here are, in fact, the ones that have been carried away from high school, undergraduate and graduate classes in economics, and they are the values often applied by decision makers, whether for personal or business decisions, or in public policy. These values are not only promulgated in classrooms; they have sunk deep and wide into a global culture to which very few societies in the world are immune.”
6. “ Contemporary media, operating largely in the interests of business, have taken off from economic theory to promote a set of ideas about what is desirable and admirable. From the sales point of view, the self-interest of business is served by a culture of instant gratification and simplified thinking that urges material purchase as the answer to any discomfort. This is not the culture needed for the 21st century, when it is more than ever important that citizens and politicians care about the long run, and are able and willing to address intelligently the myriad highly complex issues that face modern societies. “

Source:
http://www.paecon.net/PAEReview/ issue96/Goodwin96.pdf
https://rwer.wordpress.com/2021/07/31/ the-culture-of-consumerism/#more-40736

Dr Neva Goodwin was from 1995-2020 co-director of the Global Development And Environment Institute (GDAE) at Tufts University, and is now associated with Boston \university.