Hey, big spenders

In an article in May, the Economist praised France for resisting the worst effects of the global economic crisis. France and Germany appear to have fared well in comparison with Britain and the US. The magazine attributed these differences to the role the state plays in each economy. France is the most statist country, Germany less so and Britain and the US are least state-protected. The Economist usually chides Europeans for not embracing the free market. Hence it rushed to claim that France’s success cannot last and that it and Germany will have to move in the Anglo-Saxon direction in the long run.

Yet there is another difference among these nations—the extent to which they have been afflicted by the western disease of consumerism. The French and the Germans have been less willing to work longer and harder—and to sacrifice the rest of life’s pleasures—in order to buy more goods.

And so the crisis prompts the question of whether, when the British and American economies begin to hum again, we should return to business as usual or consider a different way of living, closer to the continental one. To do so we would have to end the obsession with making ever more and consuming ever more than the next person. But we must also ask: what should we devote ourselves to in future? What will we work for and how should we spend our leisure time?

Profound transformations have occurred in the past in the definition of “the good life” and the importance ascribed to economic success and conspicuous consumption. Before the spirit of capitalism swept across much of the world, neither work nor commerce were highly valued pursuits—indeed, they were often delegated to scorned minorities such as Armenians and Jews. For centuries in aristocratic Europe and in Japan, making war was an admired, chivalrous profession. In China, philosophy, poetry and brush painting were highly respected during the Qing dynasty. Religion was once the dominant source of normative culture; following the Enlightenment, secularism was viewed as the normative foundation in some parts of the world. In recent years, though, there has been a significant increase in the influence of religious values, for instance in Russia and, of course, the Muslim world.

Cultural transformations have occurred throughout history, although not all can be said to have elevated the human condition. We may well be due for another one. Indeed, crises such as the current one often accelerate historical changes.

So what kind of transformation is called for? I believe what needs to be eradicated, or at least greatly tempered, is consumerism: the obsession with acquisition that has become the organising principle of much western life. This is not the same thing as capitalism or consumption. To understand why, consider psychologist Abraham Maslow’s famous hierarchy of human needs. Maslow’s hierarchy is shaped like a pyramid. On the bottom layer are physiological needs such as food and water; one level up are safety needs such as security. Once these are sated, satisfaction is then drawn from affection (friendship and so on), self ­esteem (achievement or respect by others) and finally self-actualisation (creativity and morality). As long as consumption is focused on satisfying basic needs­­, those at the bottom of the hierarchy, it is not consumerism. But when the acquisition of goods and services is used to satisfy the higher needs, consumption turns into consumerism ­­and consumerism becomes a social disease.

The link to the economic crisis is obvious. A culture in which the urge to consume dominates the psychology of citizens is one in which people will do almost anything to acquire the means to do so: ­­working slavish hours, behaving rapaciously in business and even bending the rules to maximise earnings. People will also buy homes that cost beyond their means and run up credit ­card debt. It seems safe to say that consumerism is, as much as anything else, responsible for the economic mess. But, even when this is pointed out, consumerism will not just disappear from its central place in our culture. It needs to be supplanted by something.

To accomplish this kind of change, it is neither necessary nor desirable to imitate devotees of the 1960s counterculture, early socialists, or followers of ascetic religious orders, all of whom have resisted consumerism by rejecting the capitalist project. On the contrary, capitalism should be allowed to thrive, as long as it is within clear and well­ enforced limits. This position does not call for a life of austerity nor of altruism. And it does not call on poor people or poor nations to be content with their fate; the capitalist economy must provide for the basic needs of all people. But it does call for a new balance between consumption and other human pursuits.

There is strong evidence that when consumption is used to address higher needs­ it is ultimately Sisyphean. Studies have shown that among nations with annual incomes above $20,000, there is no correlation between increased income and increased happiness. The studies also indicate that many people in capitalist societies feel unsatisfied, if not outright deprived, however much they earn and consume. This is because others make and spend even more—it is relative rather than absolute deprivation that counts. And since, by definition, most people cannot consume more than most others, consumerism will always throw up this dilemma. True, it can be hard to tell a basic good from a status good, and a status good can turn into a basic one (air conditioning, for instance). However, no one can be said to need a flat-­screen television, not to mention a diamond as a token of love or an old master’s painting as a source of self­ esteem.

And consumerism afflicts not merely the upper class in affluent societies but also the middle class and many in the working class. Large numbers of people in all classes believe that they work merely to make ends meet. Yet an examination of their shopping lists and wardrobes reveals that they spend a good part of their income on status goods such as brand­ name clothing and other items that they don’t really need.

This mentality may seem so integral to western culture that resisting it is futile. But the economic downturn has already caused people to spend less on luxury goods and lavish celebrations and even to accept lower salaries or unpaid breaks. So far, much of this scaling ­back has been involuntary, the result of economic necessity. But this is the perfect opportunity to help people to realise that limiting consumption is not a reflection of failure. Rather, it represents a chance to abandon consumerism and focus on other things.

We need a culture that extols sources of human flourishing besides acquisition. The obvious candidates are communitarian pursuits and transcendental ones. Communitarianism refers to investing time and energy in relationships with other people, including family, friends and members of our community. The term also encompasses service to the common good, such as volunteering, national service and politics. Communitarian life is based not on altruism but on mutuality, the idea that deeper involvement with others is rewarding to both recipient and giver.

Transcendental pursuits refer to spiritual and non-functional activities including religious, contemplative, artistic and even sporting ones. The lifestyle of the Chinese literati, centred around art and philosophy, is a case in point, but a limited one since it was practised by an elite and based in part on exploitation of others. In modern society, transcendental pursuits have often been emphasised by bohemians, artists and others. Again, however, these people make up only a fraction of society. Clearly, for a culture to move to satisfying higher human needs with transcendental projects, the option to participate in these pursuits must be widely available.

All this may seem abstract, even utopian. But one can see a precedent for a society that emphasises communitarian and transcendental pursuits among retired people. Retirees often spend the final years of their lives in pursuits such as painting not for the art market or galleries but as a form of self­ expression, socialising with each other, volunteering and taking classes. Of course, these citizens have already put in the work that enables them to lead this kind of life. For other age groups to participate before retirement, they would have to shorten their working week and working day, refuse to take work home, turn off their BlackBerries and otherwise downgrade the centrality of labour to their lives. This is, in effect, what the French tried to do with their 35-­hour working week. Mainstream American economists­­—who argue that a modern economy cannot survive unless people consume ever more and hence produce and work ever more­—have long scoffed at these societies and urged them to modernise.

A society that downplayed consumerism in favour of other organising principles would not only limit the threat of economic meltdown and enjoy a happier populace; it would have other advantages too. It would, for example, use fewer material resources and therefore be much kinder to the environment. It would also exhibit higher levels of social justice.

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Social justice entails redistribution of wealth, taking from those disproportionately endowed and giving to those who are underprivileged through no fault of their own­­, for reasons ranging from past injustices and their lingering contemporary effects to globalisation and genetic differences. These redistributions have been surprisingly limited in free societies because those who command the “extra” assets tend to be those who are also politically powerful. Promoting social justice by forcing those in power to yield has had limited success in democratic countries and led to massive bloodshed in others. So are there other ways to reduce the resistance of elites to redistribution?

The answer is to have the elite derive their main source of contentment from activities that are neither labour nor capital intensive and hence do not require great amounts of money. Communitarian activities require social and communication skills as well as time and personal energy, ­­but nominal material or financial outlays. The same holds for transcendental activities such as prayer, meditation, music, art, sports, adult education and so on. True, consumerism has turned many of these pursuits into expensive endeavours. But when people break with this mentality they will find they can engage in these activities with minimal expense. No one needs designer clothes to enjoy the sunset or fashionable shoes to benefit from a hike. Chess played with plastic pieces is the same game as the one played with marble ones. And the Lord does not hear prayers read from a leatherbound Bible more clearly than those read from a plain one. In short, people who embrace simpler lifestyles will find that they can achieve high levels of contentment even if they give up most of their surplus wealth.

So how could this come about? The main way that societies will determine whether the economic crisis does, indeed, lead to cultural transformation is through a process I call “moral megalogues”: mass dialogues over what is right and wrong. Megalogues involve millions of members of a society exchanging views with one another at workplaces, during family gatherings, in the media and at public events. They are often contentious and passionate and, while they have no clear beginning or end, over time they lead to changes in culture and people’s behaviour. Societies are constantly engaged in megalogues but typically only one or two topics dominate these at any given time. Recent major issues include the legitimacy of the Iraq war and, in the US, gay marriage. In earlier decades, women’s and minority rights were topics of such discussions.

The megalogue about the relationship between consumerism and human flourishing is now flickering but has yet to become a leading topic. Public intellectuals, pundits and politicians are best ­positioned to set the proper scope for the discussion—from what we teach in schools to the culture of the workplace. Legislation has a role to play too. Taxes can discourage the purchase of larger houses, cause people to favour public transport over cars, and so on. Government can also strike a blow against consumerism by capping executive pay.

Is all this an idle, abstract hypothesis? Not necessarily. Plenty of religious Americans have already embraced versions of these values. And those whose secular beliefs lead them to community service are in the same boat. One such idealist named Barack Obama chose to be a community organiser in Chicago rather than pursue a more lucrative career in law.

People will not move away from consumerism overnight. Some may keep one foot in the old value system even as they test the waters of the new one. Societies shift direction gradually. All that is needed is for more and more people to turn the economic crisis into a liberation from the obsession with consumer goods and the überwork it requires ­­and, bit by bit, rethink their definition of what it means to live a good life.