What is Consumerism?

With the exams now over or heading into its final stages, many parents can breathe a sigh of relief as they now begin to finalise their holiday plans. But before they actually get that far, first its “Black Friday/November Deals,” and the question on everyone`s mind right now is “Where can I get the best deals?”

However, in a time of economic downturn, it`s important that we look beyond just the price tags and ask ourselves some very important questions about who is really winning in all of this.

Therefore, this week with Friday the 29th of November actually set for Black Friday, our theme will focus on Consumerism.

What is Consumerism?

Consumerism is the idea that increasing the consumption of goods and services purchased in the market is always a desirable goal and that a person’s wellbeing and happiness depend fundamentally on obtaining consumer goods and material possessions. In an economic sense, it is related to the predominantly Keynesian idea that consumer spending is the key driver of the economy and that encouraging consumers to spend is a major policy goal. From this point of view, consumerism is a positive phenomenon that fuels economic growth.

Understanding Consumerism

In common use, consumerism refers to the tendency of people living in a capitalist economy to engage in a lifestyle of excessive materialism that revolves around reflexive, wasteful, or conspicuous overconsumption. In this sense, consumerism is widely understood to contribute to the destruction of traditional values and ways of life, consumer exploitation by big business, environmental degradation, and negative psychological effects.

Conspicuous consumption is a means to show one’s social status, especially when publicly displayed goods and services are too expensive for other members of the same class. This type of consumption is typically associated with the wealthy but can also apply to any economic class.

The History

Following the Great Depression, consumerism was largely derided. However, with the U.S. economy kick-started by World War II and the prosperity that followed at the end of the war, the use of the term in the mid-20th century began to have a positive connotation. During this time, consumerism emphasized the benefits that capitalism had to offer in terms of improving standards of living and an economic policy that prioritized the interests of consumers. These largely nostalgic meanings have since fallen out of general use.

So Who Benefits?

As consumers spend, economists presume that consumers benefit from the utility of the consumer goods that they purchase, but businesses also benefit from increased sales, revenue, and profit. For example, if car sales increase, auto manufacturers see a boost in profits. Additionally, the companies that make steel, tires, and upholstery for cars also see increased sales. In other words, spending by the consumer can benefit the economy and the business sector in particular.

Because of this, businesses (and some economists) have come to view increasing consumption as a critical goal in building and maintaining a strong economy, irrespective of the benefit to the consumer or society as a whole.