Consumerism Demystified - Doing Well Is Not The Same As Being Well
Consumerism is an ideology as much as it is an activity.
Marketing is what ingrains this ideology.
Profit and market share are its targeted consequences
In the first two decades of the 20th century, manufacturing in America expanded manifold. Its biggest example was Henry Ford’s automotive giant, the Ford Motor Company. A visionary and pioneer, he created assembly line production. Yet, Ford was famously apathetic to giving consumers much, if any, choice. This opportunity was grabbed by Alfred Sloan at General Motors. Since capital investment in manufacturing was a massive investment, it became necessary to accelerate consumerism to ensure payback. It was also necessary that consumerism grew without fundamental, defining, ‘capital guzzling’ changes.
The 1956 Chevrolet Bel Air was designed to create an irresistible upgrade. Hereafter, obsolescence was seeded via sharp marketing. The creation of desire for the ‘new, better and improved’ became the core purpose of marketing second only to awareness building. It helped grow the world economy and utilise the massive industrial base that had been created during the 1939-45 period. It accelerated globalisation.
‘Au courant consumerism’ became a catalyst for the private economy. Loyalty was demonstrated not merely through repeat purchase but through the act of upgrade purchase. Self-esteem was redefined in terms of ‘staying forever upgraded’.
Of course, the planned upgrade is a consumer choice. But, the fact that diminished return was the spur that moved consumers is something that is not much socialised. It is not about the new possession. It is about the endorphin rush.
Marketing has associated consumerism with images of modernity, freedom and power. Brands have moved way beyond selling products or services, to experiences. The energy lies in making something distinctive, unique, and ‘worth it’.
In 1932, a few years before World War II, an association called “Phoebus Cartel” was convened in Europe. It was founded by William Meinhardt of Osram and Anton Philips, the founder of the eponymous Dutch electrical giant. Its aim was to organise obsolescence. Its method was to impose an agreement on what the lifespan of a lifebulb ought to be. Any manufacturer who defied the cartel would be run out of business. The signatories included the who’s who of global electrical business of the time from GE to Tokyo Electric. It has come to represent the most classic case of consumer action being dictated by large corporations. There is a counter-argument in support of this which argues that , by keeping people buying, the agreement helped save capitalism and democracy when the world lurched into a world war and walked on the edge of economic depression for years.
The central idea of Homo Economicus –is characterized by the infinite ability to make rational decisions. The consumer is rational, selfish and with unbounded willpower to make repeated purchases. Herbert Simon, a critic of the assumption of unlimited information processing capabilities suggested the term “bounded rationality” to describe a more realistic conception of human problem-solving capabilities.
It is considered “rational” for people to adopt rules of thumb as a way to lessen the cognitive load. Retreats from rationality emerge both in judgments and in choice. Understanding how judgment moves away from rationality has been pioneered by Daniel Kahneman, Paul Slovic, and Amos Tversky. The most significant concepts are of expectant optimism, the bandwagon effect , the ‘availability heuristic’ and the ‘representative heuristic’.
Cognitive biases act as mental and emotional filters to external stimuli. We understand things and act on stimulus after interpreting them based on biases. They influence and impair our ability to evaluate information objectively and logically.
Of the cognitive biases -from a sociological standpoint- the ‘Bandwagon Effect’ is the most significant. The Bandwagon Effect leads the individual to make decisions based on the opinion and decision of the majority. Loosely called ‘herd behaviour’ it is seen in all phases of human life. It leads the consumer to perceive obsolescence through social pressure, fashion and media influence. People are more susceptible to the herd effect in situations of uncertainty, panic or in times when there is pressure for decision-making. People feel more comfortable and secure when they are part of groups, while the feeling of being excluded or unrecognized is often disagreeable and pressure inducing.
We must think long and hard about the phenomenon of upgrade and its moral boundaries. The day is not far when humans themselves will get ‘upgraded’ to superior, enabled versions of their plainer ‘natural’ selves. Anders Sandberg a Senior Research Fellow at the Future of Humanity Institute at Oxford University has called this ‘Speciation’.
We need to think long and hard on how to promote meaningful consumerism by blessing it with our spending.
Doing well has to mean being well.
