Capitalism is a recent discovery in the history of human societies. Beginning in the 16th century in Europe, consumerism developed as a way to improve living conditions, secure food resources, and support job growth during the early stages of the Industrial Revolution. By the 18th century, it was a practice that expanded into several different industries, including fashion and luxury goods.
At the core of consumerism is an active competition for revenues. Businesses must provide the best possible product or service to consumers. If they are not the best, then the customer will go to a competitor. That trend forces companies to look at the specific reasons why people purchase items, allowing them to create goods or services which meet specific needs.
Now the rise of consumerism is impacting the developing world as the developed countries mature. You’ll find new advertisements for goods or services around the globe. Debt levels rise as people buy items they want. Innovative products continue to call for a purchase.
These are the consumerism pros and cons to evaluate today.
List of the Pros of Consumerism
1. Consumerism stimulates economic growth.
When goods or services are demanded in a society, then businesses must work harder to produce those items. It creates a never-ending cycle of buying and selling which allows the economy to grow. Increased production levels lead to more jobs. Additional employment leads to better wages in local communities. Higher wages lead to more spending. As the cycle continues to grow, the standard of living continually rises. That process creates more home, food, and job security for the average family.
2. It also boosts creativity and innovation.
Businesses must continue to offer new goods or services to encourage ongoing sales. The only way to provide opportunities like this is to invest in research and development products. Consumers are always looking for the next product which solves their pain points better, cheaper, or both. That desire for something better places a lot of pressure on companies to continue producing better items. Then the cycle of economic growth continues.
3. Cost reductions are encouraged because of consumerism.
When a society focuses on consumerism, the goal is to create the best value promise possible for the consumer. To define value, companies must recognize the pain points of their targeted demographics. Then they must be innovative with their production techniques to keep manufacturing costs as low as possible. This combination keeps prices down, which then allows a consumer to purchase items without being overly indebted to the process.
4. It weeds out the poor performers naturally.
Companies are forced to stay innovative when managing consumerism. There is no other way to be competitive. Anyone can enter the market with relatively few barriers to entry. The consumers will then have the final say as to who gets to stay and who leaves, based on their purchasing preferences. Although that causes some companies to go out of business, which means fewer jobs the best and the brightest almost always stick around.
5. Consumerism encourages freelancing, entrepreneurialism, and self-employment.
People are encouraged to take risks in a society which encourages consumerism. You’ll find more freelancers working on their own, securing contracts to work from home, in this type of society compared to others. Entrepreneurs who run “lean and mean” organizations have an opportunity to strike it big. Self-employment becomes an option because individuals provide high-quality services at prices much lower than the average competitor.
It is in these areas where real economic growth occurs.
- 99.9% of all businesses in the United States are classified as a small business.
- There are 8 million minority-owned small businesses currently operating in the U.S. right now.
- 58.9 million people in the United States are currently employed because of the structure of consumerism.
- Over 20 million people are employed by agencies with 20 employees or fewer.
6. It creates safer goods for consumers.
When consumerism is the element driving society, then purchasers become familiar with their rights and responsibilities. They seek protection from faulty products or inadequate goods by holding companies to higher standards. If those standards are not met, then the purchaser follows a process to be made whole – often through the court system.
These standards may even include how the business treats their customers. If two companies sell a similar item at the same price, it is the customer service which will sway the value proposition.
7. Consumers are given more choices in this society.
You can find more choices today than ever before in several product categories. New beverage flavors from Coca-Cola and Pepsi are introduced more often than ever before. You can find new potato chip flavors, mooncake flavors, and much more. Consumers even have the option to choose which celebrities they prefer to support by purchasing items that they choose to endorse. That is how consumerism improves the economy. You get what you want if you’re willing to pay for it.
List of the Cons of Consumerism
1. The economy takes precedence over the environment.
When a society focuses on consumerism, the environment is usually the first element to see degradation occur. When consumers focus an increased demand for goods or services, the natural resources in the area come under pressure. Raw materials, water, and food products may experience scarcity. Because the best price possible is also encouraged, shortcuts happen too, such as using harmful chemicals to encourage a better price point. By the time all is said and done, consumerism does harm than good from the perspective of the environment.
2. It changes the moral fabric of society.
Consumerism focuses on the personal ability to secure the best-possible goods or services when required. There are no ethics involved in this transaction. If you could achieve the lowest price when solving the most pain points, then you’re the best. No consideration is given on how you got there.
Families experience this shift in the moral fabric too. They feel a “need” to purchase goods or services that are not required, as if shopping were an addiction. These purchases occur to facilitate an equality in a society where everyone has access to the same products or services as everyone else.
3. Consumerism encourages debt.
People take out short-term loans to meet the needs of consumerism more often than they do under different spending structures. Credit card purchases are frequent, especially during special events, holidays, or new product launches. For Black Friday 2018, consumers in the United States spent over $717 billion on items for the holidays, a 4.3% increase from the year before. Over $1,000 per person was spent for the first time. Compare that to 2005, when $496 billion was spent with an average of $734 per person.
The United States is often viewed as the world’s leader in consumerism. You’ll find the average American has 3 or 4 credit cards in their possession and are carrying a rotating debt of more than $16,000. When the net worth of a household is less than $5,000, their average credit card debt is just under $4,000.
4. It leads to health problems.
When people encounter debt that will not go away, higher stress levels are sure to follow. Constant exposure to stress leads to ongoing health problems, ranging from insomnia to depression and other mental health issues. The only way to be successful when your focus is on consumerism is to work harder, earn more, borrow more, and spend more time doing these things. You have less time for relationships, hobbies, or time to yourself.
5. Consumerism does not provide fulfillment.
Research consistently shows that people do not receive long-lasting fulfillment when their primary focus is on the materialism which occurs through consumerism. By the time someone starts earning $200,000 per year, the benefits of earning a higher salary disappear. People who make the most money tend to score the highest on a scale of negative emotions, reaching more than 50% by the time $360,000 is reached.
6. It can be used as a political tool.
During the 1950s, Americans were lauded for their approach to consumerism. Some messages were so strong that people were told they weren’t patriotic if they chose to save money instead of spending it. During that decade, the U.S. economy grew by 37%. Families had 30% more spending power in 1959 compared to 1950 figures. Unemployment during the decade dropped to 4.5% at one point.
Despite all those advantages, 1 in 4 people still lived in poverty despite all the spending. It was one of the highest rates of poverty ever seen in the country outside of the Great Depression and wartime efforts, yet because of all the spending and the politics involved, it is often remembered as the best decade in U.S. history.
7. Consumerism conflicts with various spiritual beliefs.
Jesus told the rich young ruler that all he had to do to enter heaven was to give away all that he had. Islamic law prohibits earning interest or paying it. Buddhism looks at hard work and steady efforts as a path toward prosperity and progress. Judaism believes in completing God’s creation while being smart stewards of money. Societies which are overly religious tend to avoid consumerism. Families who follow spiritual practices are often cast aside when living in consumerist lands. It is difficult to love money and God at the same time, and consumerism teaches that money should come first.
8. The poor are always left behind by consumerism.
If you don’t have the money to pursue a choice, then you’re left with no choice. You purchase what you can afford to meet your needs. There is a negative stigma in consumerist societies involving people who ask for help. Even if you’ve been cast aside through no fault of your own, when you don’t purchase, then you’re not participating. You are cut-off from the very fabric of society until you can provide yourself once again. That creates a cycle which is difficult to break. You can’t participate because you’re not employed or poor, but you can’t get a job because you’re not engaged with society.
These consumerism pros and cons are not intended to be a judgment on the state of any society, individual perspective, or personal belief. They are a look at the facts. When the priority of society is to accumulate items, it does create jobs, but debt is also created. The positive cycles of economic growth are complemented by negative cycles of indebtedness. That is why many households are choosing to avoid consumerism when they can, with many feeling their lives are better because of it.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.