Economists use the theory of Consumerism in an effort to explain how the American market is influenced and shaped by the by the choice of the consumer. Consumerism has been an essential element in economies since the civilization of man and is the foundation to our free-market enterprise. Indeed, consumerism is good for the wants and needs of American society and may be described as a necessary evil.
In today’s modern society that is ruled by the cell phone, tablet and plastic credit cards, I argue that Consumerism is necessary in spurning healthy completion in successful markets and, as a highway in our goal of the “American Dream”, is successful in creating consumer “want” to drive markets forward. Consumerism inspires entrepreneurship, the building block of free-market enterprise and the basis of our economic systems. In American society, the need to invent is directly related to the need to consume and our economy is built solely on this concept. Our economy functions much differently then that of other economies, for example: Canada.
In Canada, consumerism was not as prominent as the in the U. S. since Canadian consumers generally focused more on “needs” as “wants”. But as consumerism evolves so does the wants of the consumer. For example, as opposed to 20 years ago, Canadians now spend two and a half more on goods and services (Canadian Bureau of Statistics). According to a recent report by CGA Association of Canada (Certified General Accountants), Canadians are ranked first in asset-to-debt ratio and, opposed to 20% of saved disposable income twenty years ago, Canadians savings have fallen bellow 1%.
This higher amount of disposable income spent on goods as services have aided Canada in growing their economy. Canadian spending has been increasing steadily since 1987 (Canadian Bureau of Statistics). Surprisingly enough, Consumerism also aids Americans views of popular culture. American consumers buy goods according to personal needs and what they deem “necessary to “have”. They also purchase goods according to social needs, to follow trends and become exposed to other products and services. It very apparent that American live in a society that uses the mentality “I am what I have” as a guideline to how we are viewed by our peers.
This mentality makes certain products appear more important, attractive and essential to consumers thus justifying a higher price. Once a product is produced and ready for distribution to the masses, advertisements and “image-branding” techniques are used to make consumers subconsciously make associations between products, social status and income level. And, in order for healthy competition, companies offer discounted prices and incentives for purchasing certain objects, and by doing so, attract a larger variety of consumers in various age-ranges.
Consumerism in most countries increase mainly due to industrial revolution. Consumerism also helps by making the gap between social statuses smaller. According to economist Deirdre McClosky, “the rise of middle class consumerism is one of the most significant and underrated turning points in the history of civilization. ” She argues that modern Consumerism began in 18th century England, during the Industrial Revolution. Wealth accumulation was celebrated instead of despised. Industry, commerce, and innovation unleashed the largest amount of wealth England had ever known.
At that time, individual income spiked from $3 per day to $125 depending on profession. This introduction of wealth ushered in a new age of abundance. Such abundance had usually been reserved for royalty and wealthy families, was now available to everyone and has remained true to today. Products such as iPhones, elaborate computers, and many other media-entertainment devices have been made affordable to a vast variety of people, regardless of social status. One could argue that Consumerism has “brought together” the masses though technology.
Since the American market is largely capitalistic in nature, company’s goals are to increase their sales by using elaborate advertisements and product placement to introduce their products. Also, companies don’t make the product most consumers think they are buying. By doing so, companies are sure not to fulfill the wishes of the consumer so that they keep coming back for another product. This is done by making products with a short shelf life and limited usability, essentially a product that “is made to break”. In conclusion, Consumerism had led to the development of luxury products that have become “status symbols”.
A majority of products, such as clothes, music, and popular electronic devices, tend to very easily go out of fashion and thus considered “obsolete”. This has led to many socio-economic as well as environmental problems. Consumerism has seen a small decline in the recent years largely thanks to widespread education of the consumers. However, markets still continue to flourish with buysers overindulging themselves and buying unnecessary but attractive products. It is a practice that consumers will continue to practice unless they are given some incentive to stop.