I noted a while back that the U.S. savings rate was on the rise, that it looks like U.S. carbon dioxide emissions peaked in 2007, that President Obama was making a big push toward making America a nation of creators as opposed to consumers, and asked in May,0 “Is the U.S. consumption binge over?“ Well, I’m asking again:
Have you personally seen evidence of permanent behavior shifts or is this is just a small speed bump on the Autobahn to oblivion.
On Friday, a NYT piece, “Reluctance to Spend May Be Legacy of Recession,” made some similar points:
The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.
“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”
Of course, it’s a long way from Hummers to John Stuart Mill’s “Stationary State.” Also, the “the savings rate dipped to 4.2% from 4.5% in June and from 6.0% in May,” and even the 6.0% was only a blip to the 50-year average (the figure below is the 3-month centered average of the personal savings rate).
Still, the NYT notes:
On Friday, the Commerce Department said spending rose 0.2 percent in July from the previous month. But most economists see this activity as short-lived, pointing out that incomes did not rise. Some suggest the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.
And the piece offers this interesting factoid about gardening:
At a mall devoted to home furnishings, many storefronts were vacant, and survivors were draped in the banners of desperation: “Inventory Clearance,” “50% Off,” “It’s All On Sale.”
But at the Natural Gardener “” a lush assemblage of demonstration plots that sells seeds, plants and tools for organic gardening “” business has never been better.
Sales of vegetable plants swelled fivefold in March over past years. The company added a public address system and bleachers to accommodate hordes showing up for vegetable-growing classes.
Part of the embrace of gardening stems from concerns about the environment and food safety, says the company’s president, John Dromgoole. Momentum also reflects desire to save on food costs.
“People are very interested in shoring up against losing their jobs,” he said.
You tell me where we are on the binge-purge scale of 1 to 100, with the 100 (binge) being a Hummer in the garage of every 5,000-square-foot home and 1 (purge) being total collapse of the global Ponzi scheme and embrace of The Transition Handbook.
Andy Revkin at DotEarth has the comments of some economists at two posts, “An Upside to the Consumption Chill?” and “Are You On a ‘Hedonic Treadmill’?” Let me end with an excerpt (via Revkin) of one of my favorite thinkers, John Sterman, Director, MIT System Dynamics Group, Sloan School of Management, who lays out his own version of the global Ponzi scheme:
We have been consuming natural capital far faster than it regenerates, whether it’s fossil fuels, fish, forests, wetlands, or the capacity of the oceans and other sinks to take up greenhouse gases. Wackernagel et al. (originally in PNAS; see updates at footprintnetwork.org) document these dynamics, arguing that we have already overshot the global carrying capacity. Of course, carrying capacity is dynamic, partly endogenous, affected by technology as well as consumption, and a notoriously slippery notion to nail down. Nevertheless, a number of new studies are consistent with these results. In particular, the new “Planetary Boundaries” paper, forthcoming in Nature, makes the case that humanity has overshot the global carrying capacity in a variety of key areas, including GHGs [greenhouse gases], nitrogen, phosphorus, fresh water, land use, and biodiversity.Material consumption is critical to easing down below these limits and building a more sustainable society. And there’s tremendous scope for greater efficiency and de-materialization in our consumption. Through technological and organizational change, supported by proper pricing (internalizing the currently externalized costs and environmental risks of material consumption and waste production), we can almost certainly provide for the needs of the projected population, at a good standard of living. But of course that’s not enough. As long as the dominant ethos is the drive for more consumption per capita “” ever greater accumulation and consumption of material goods, energy, etc., then no amount of efficiency will suffice. For example, improvements in the efficiency of water or energy use just let water- and energy-constrained regions grow further until some other limit is reached, or water and energy once again becomes the constraint. And so on. As long as everyone wants more “” a bigger home, a bigger TV, a fancier vacation, more stuff, more consumption, more than they consumed last year, more than their neighbors “” there can be no technological solution to the problem. As Herman [Daly] has long pointed out, there is an essential moral character to the dilemma in which we find ourselves.
The ironic thing is that the pursuit of more, so stunningly successful so far, has not increased our happiness. Again, this is a contentious arena, and the science of subjective well-being is still emerging. But many studies, including the great work Danny Kahneman and colleagues have done, show that, for the developed economies at least, greater consumption per capita is only weakly associated with greater well-being (happiness, utility, life satisfaction). Consumption per capita in the developed economies has increased dramatically over the past half century, yet reported life-satisfaction is no higher. People tend to base their “needs” on habitual consumption, and on the consumption of those they observe around them through their social networks, in their neighborhoods, and in the media, feeling greater satisfaction when they have bigger houses and more expensive cars than those around them, and feeling deprived when they have relatively less. Economic theory used to suggest that as people got richer, the marginal utility of income would fall, so people would naturally shift their energies away from material consumption and towards higher pursuits. This doesn’t seem to be happening, as Keynes long ago feared. Instead, through habituation and social comparison, we find ourselves in a no-win situation in which no level of income or consumption remains satisfying for long “” the hedonic treadmill. The more people seek to boost consumption, the more income they require and the harder and longer they must work, undermining those activities that are actually fulfilling and satisfying: for example, Juliet’s work, and that of Kahneman, Krueger and Schkade (I hope I’m not overinterpreting) shows people spend far more time working, commuting, and doing other aversive, unpleasant tasks, while the time spent in satisfying activities such as building friendships and intimate relationships, athletics, spirituality, self-improvement, etc. is small. People move to distant suburbs far from their jobs so they can afford a larger house, thinking this will make them happier, but don’t adequately account for extra hours they must work to pay off the mortgage and the way their long commute erodes their happiness by stealing time they could be spending with their spouse and children, friends and community. Thus even if there were no environmental constraints to endless growth, even if the capacity of the planet to support material consumption where infinite, growth in material consumption, the never-ending quest for more stuff, is not taking us where we want to go.
During this economic crisis we have heard a lot about people getting back to basics. From gardening, to carpooling and bicycling, to swap meets and barter, to mending clothes and appliances instead of throwing them out and buying new, people are rediscovering traditional values of frugality and community. The unanswered question is how much of this will stick once the economy recovers and people find themselves feeling a bit flush. Will people keep riding the bus once they can afford gas again? Will they trade that Ford Focus they bought under Cash for Clunkers for a big new SUV? A cynical view suggests that all the talk about the recession fostering frugality, living within one’s means, and the virtues of helping and being helped by one’s community is just talk, and that what’s actually happening is that people are building up a deep well of perceived deprivation, a backlog of buying, such that when the economy recovers we’ll see another binge of overconsumption, carrying us farther still from a satisfying life and speeding the collapse of planetary life support systems. I don’t believe this is inevitable, but it will take a lot of work to shift our lives from the self-defeating path we are on to a more satisfying, sustainable path.
Related Posts:
- Robert F. Kennedy challenged our Ponzi scheme pursuit of growth for growth’s sake, much as his heir, Barack Obama, does
- Revkin has leading system dynamics expert Sterman on NOAA’s 1,000-years-of-hell paper
- MIT Part 2: Tackling the biggest source of climate confusion
- MIT’s systems thinking on climate, Part I: SOTU
- Ponzi redux: Scientific American asks “Could Food Shortages Bring Down Civilization?”
Previous in TP Climate Progress
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
People (and psychology) are very diverse.
Dealing with — and learning from — the present situation will help some people understand, to differing degrees, that they can be happy with less and with living more streamlined, and in some cases natural, lives.
But, something else runs very deep. Humans are very social beings. We notice each other, “compete” for attention and friends and mates, and are status conscious — in differing degrees.
So, as long as very large numbers of people “use” and “leverage” that fact to advertise status to us — trying to convince us that we’ll be more cool and attractive and successful and so forth if we only buy Thing X — the whole “I can buy happiness” thing will still be a VERY powerful current in our mindset.
That’s why we do need to “examine” things and make some changes — at the minimum, aimed at achieving a more sustainable approach — rather than just assume that the present situation will help most of us adopt more healthy values.
Keep in mind: Other primates are also status conscious and hierarchical, and they don’t even have cars, top hats, or diamond necklaces. That doesn’t excuse us, of course, but it does suggest that more than a little “learning” will be needed to get us on a sustainable path.
Cheers,
Jeff
Purge-binge scale now: 99.99
And gas is now $3.049 here, just up another nickle…
Tangentially related to the topic.
Guardian launches 10:10 campaign:
http://blogs.nature.com/climatefeedback/2009/09/guardian_launches_1010_campaig.html
I don’t see anyone saying “Buy Less.” Borrow less, maybe, but not buy less.
Problem 1: The “western” world is focused on quarterly returns and 2-4 year election cycles. Nothing else really matters.
Problem 2: The OTHER 75% of our planet wants onto the gravy train. Any talk of “steady state” economy/ecology must assume 5 billion people get to raise their standard of living from Bangladesh to Baltimore. Some studies have noted that even with every energy resource we can muster, (including building 2 new nukes a week for the next 50 years), the energy requirements of a 10B person planet means every one on earth gets the standard of living of the current residents of Equatorial Guinea.
I sure hope the “Natural Gardener” in that mall is well stocked.
We need to stop dancing around the elephant in the room. Who’s going to be the first to suggest mass exterminations of population to save the planet? Anyone? Bueller?
It seems that nature is already pointing to a major human population crash. This is the standard outcome of ecological overshoot.
J.D. let me give you a hug! The Transition Handbook along with Consumed (Benjamin Barbers great book on the pro’s and con’s of a marketing driven world, should be the new bible for the years ahead of us. I may have spoken rather provocative rejecting the neatly assembled (read overcomplex) climate bill (which somehowe represents a shimmer of hope). But consumption and waste are still the main driving forces of climate change.
Greetings, Ed
Those advocates of exterminations and mass extinctions are short-sighted people, at best. Talk of these things are not helpful to situation at hand, and we who are trying to make a difference would appreciate any chilling of the chicken little on PCP routine.
Gracias,
Steve H
Where can I get a copy of the Planetary Boundaries paper?
Sterman is clairvoyant. I’m guessing fresh water will be the first resource that constricts human population. Anyone have an idea of when this will start to happen? I highly doubt we’ll ever reach 10 billion.
Steve H: I don’t think anyone, anywhere, is advocating that. I just think there are many who believe NOT facing up to the issue of population is the REAL short-sightedness.
Population combined with high per-capita consumption Rockfish. Not that you didn’t mean otherwise. And throw personal disconnection from nature in there somewhere.
Telling people not to want more is like telling people not to want sex. It’s human nature. The trick is making that human nature work for society instead of against it. For most mature people it’s more fulfilling having one partner than running around chasing one night stands. Similarly, getting people to consume less is going to take pointing out the advantages to doing so, not sitting around depressed that we can’t afford the next thing. I don’t think we can expect a recession to accomplish this any better than a night of striking out is going to convince the lady’s man that it’s time to settle down and have a monogamous relationship. What we’re seeing here seems to be a little of both, though. Some people will return to their old spending ways (once they cure the hangover), others are starting to see the light. The surest way to reverse this trend is through forced deprivation. People have to want to consume less.
Suggesting genocide or preaching the inevitability of mass extinction isn’t going to convince people that they want to combat climate change. The natural response to that is, “We’re gonna’ die anyway, might as well live it up while we’re here.” We have the technology to support the current population at a pretty high standard of living, it’s just a matter of will to make the necessary small sacrifices (i.e. working) to get that technology produced and distributed. It’s going to take generations to do so, but we’re no where near the point where people should be throwing out genocide as a plausible solution. This kind of talk just turns people off to even considering making those small sacrifices.
Carlin, water is already constricting population growth. The deaths in Darfur are largely due to water wars.
I haven’t seen the data yet, but I would bet there has been a lot of people dying prematurely because their access to clean water is diminished and their food sources are degraded due to water shortage.
Current projections are that we won’t exceed 9 billion. Population growth is drastically dropping in most of the developed world.
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But as for the “US consumption binge over?” question – recall the dotcom boom and “It’s a new economy”? And recall just a very few months ago when the economy was “spiraling into a dark deep hole from which it will never recover”?
Cycles. Think reoccurring cycles. We’ll likely go back to buying stuff just as soon as we can and when the next boom hits we’ll likely buy more than we need and can afford.
Now. What we need is to get energy efficient, sustainable goods on the shelves and into the showrooms so that when people pleasure themselves by buying they won’t be damaging the planet as much as was happening during the last binge.
I do not believe that over consumption is human nature. I feel that the American public has been conditioned by incessant advertising to consume till they drop. If advertising were not effective just why is the budget soooo large? Yes a certain level of survival comfort is a human condition and should be considered a basic human right, however a SUV in every carport is a product of advertisement pure and simple.
“Telling people not to want more is like telling people not to want sex. It’s human nature”
I don’t agree with that. People can be conditioned to want all kinds of things that they don’t really need. In fact a huge problem with modern society is that most people have no real idea what they actually need vs what they want. Total cluelessness on the matter for the most pact. Much of the American advertising industry has no respect or concern whatsoever for what people actually need. Blind leading the blind.
Leif – I suspect if we were to look back at when we were all hunter gatherers we would see plenty of times when we over consumed. I’ll bet you that there were piles of berries that rotted when we picked way more that we could eat. And plenty of sore bellies from too much stuffing.
At least when the picking was easy.
Ever hear how Native Americans were known to drive herds of buffalo over cliffs and then just eat the choice parts, leaving the rest to rot?
And we could certainly look back in more recent history to rich people who accumulated vast amounts of “goods” before advertising became part of our world.
Over consumption is likely a valuable survival technique. Eat too much, store up the energy so that you can get through the hungry times.
That’s a major reason why we are getting so fat. We’re genetically programmed to heavily consume fats and sugars when they are handy because our bodies want to live through the times when they aren’t.
We over consume when times are good and cut back when they aren’t. Right now we’re on a “goods diet” because the effort to get goods has increased. And advertising is still pouring at us.
Next economic boom and we’ll likely pack our closets and storage units with stuff we don’t need once more.
If United Staters see themselves as being deprived for the moment, they will go out and buy the goods in their list of unmet needs. Who among you does not own at least 10 items you never use? Will you replace your broken dishwasher with a new one or will you start washing dishes by hand? Who can resist the cheap but ecologically expensive appliances which are made in China, India or Mexico? We want comfort and we don´t want to work hard at doing things which can be done by machines or little gizmos such as the salad shooter. Then there is the green consumption which will presumably reduce the carbon footprint of the well to do but will only allow them to keep having their comforts in a future full of energy scarcity. Meanwhile most Americans will suffer and really feel deprived without heat or air conditioning or cars.