Americans are obsessed with their mass accumulation of stuff. The bigger the heap of stuff they have, the happier they are. And nothing, not even loved ones, dare get in their way of amassing more stuff. People abandon their families for higher paying jobs and divorce their spouses because of avoidable money issues. Americans have reached a gloomy social frontier as they prioritize over-priced handbags over a genuine relationship.
Of course we could point fingers at the advertisers and marketers for mind-fucking the younger generation. However, a flickering banner ad is not enough to bring a whole country in a delusional mind-set. The real culprit lays in the structure our economy is built on: capitalism. America isn’t completely capitalistic – it does provide some social programs like well-fare and Medicaid, but it mostly relies on private decision-making and economic freedom. The free markets take charge in America and the free markets always know best. The idea that the markets will guide us towards what we collectively desire is not a novel one. This wisdom has been around for centuries, but only recently do we see its negative social repercussions.
The fact is - capitalism thrives on dissatisfaction. It’s true that the free market allows individuals to choose their optimum consumption bundles at a fair price, but what else is going on? Let’s scope in on the consumer’s mind-set when going through the decision process in maximizing utility. Imagine a consumer strolling down the labyrinth of aisles at his local Costco. He gazes at an ocean of stuff as he decides what he should buy. He pictures the stuff he already owns as he passes by newer and more expensive substitutes. He would only have the incentive to purchase a new substitute if he is dissatisfied with the one he already has. As he passes by more stuff he may realize he will be dissatisfied if he doesn’t buy that stuff.
Dissatisfaction is the fuel behind consumer spending and consumer spending is the crux behind GDP. And believe me, America cares about GDP growing every year. A recession is defined as negative economic growth for two or more successive quarters of a year. Just mentioning the word makes the market sentiment haywire (I apologize). With the government’s and the market’s incentive for growing GDP, they make sure Americans spend their achy breaky hearts out.
Pressured to spend, Americans adapted obediently as dissatisfaction became engrained in the culture. American’s discontent now extends beyond their aspiration for consumables. If you are dissatisfied with your family or girlfriend there supposedly exists a ‘free market’ out there for you to choose a better one. Things aren’t working out between you and your wife? Don’t worry, just return your current one and get a new one that fits you better! Commoditizing intimate relationships has never been this easy!
Americans have lost the ability to be ‘happy with what they have’ when it comes to consumables and relationships. By chronically being dissatisfied, they lose their happiness in the free market abyss.
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6 comments:
I'm not sure you can so easily pin this problem on free markets. The monetary system that drives this so-called "free market" is anything but free -- it is controlled by the central bank, and has a large impact on people's economic decision-making.
For example, did people rush out to buy so many giant new suburban homes in the last decade because they were inherently dissatisfied with their current homes, or because the cost of obtaining those new homes was made so low by central bank intervention that they would have been fools to miss out on the opportunity? Obviously, price is an incentive -- the very rationale for the bank's intervention was to keep people spending and avoid recession. They did this not by fomenting dissatisfaction, but by making loans cheap.
Now, you might say that these home buyers were fools for jumping at the chance to get a cheap loan on an overpriced house in the middle of nowhere with oil prices set to go through the roof. But what is the central bank doing to avert the present credit crisis but pumping out new money at a record rate so that housing prices remain high enough so people don't walk away from their mortgages. The Fed is in essence saying, "It is not the price of housing that is too high, but the price of everything else that is too low."
Why would they say such a silly thing? Because to do otherwise is to admit they were wrong to have kept interest rates so low over the past decade, to have implicitly encouraged home buyers to do exactly what they did. And if the central bank is seen to have been wrong, it could undermine the faith people (and especially banks) have in it, and this faith is in actuality the only thing underpinning the entire national monetary system. A collapse of this faith means an end to borrowing, the mechanism which creates over 95% of money in circulation, which means a collapse in the entire economy -- a Depression with a capital "D".
No, the nation, and indeed the world, can't afford for the Fed to be wrong. It is not the homebuyers who were fools to take cheap loans on overpriced homes, nor is it the banks who were fools to give those loans, nor is it the investors who were fools for buying those loans. It is the rest of us who were fools for not doing the same, because we will end up paying for their profits through inflation over the years to come.
That's how the system works. Either consume when told to consume, or pay for those who do. Is it any wonder that everyone consumes when told?
Ryan,
"...would have been fools to miss out on the opportunity"
You find it obvious that any rational person would jump on any "good deal" when he sees one. Wouldn't the person have to be dissatisfied with their current financial status before jumping on the housing boom? The central bank doesn't have to try hard to make us consume, because consuming is so deeply ingrained in our minds. If people were happy with what they had (including the mortgage companies) maybe this bubble would of never happened?
It's a good point that it's in our culture to feel we're not good people unless we spend so much time working that we miss out on the community ties that make us happy, and try to make up for it by buying stuff, which is all we can do with the money we earned by working. To get to the root of that pattern we probably have to go back to the agricultural revolution when the relatively easy hunter-gatherer lifestyle started to get crowded out by "civilization".
It's an interesting time now, because for maybe the first time since then, we produce more than enough for everyone. It will take a deep cultural shift to move away from continually trying to get ahead of everyone else and just be happy with what we have. The benefits of this decision are enormous for the individual, though, in my experience.
I am not sure what you mean by "crowding out" but it is true that the hunter-gather lifestyle competed against an agriculture lifestyle. It just became more favorable to switch over. (There exist modern forager societies mainly situated in the tropics because with an abundance of resources there was little reason to switch to agriculture).
Irrational people (overwhelming majority) will likely never be happy with what they have given the opportunity to have more.
Re: crowding out... What I've read usually describes the hunter-gatherer lifestyle as rather leisurely and the early farming lifestyle as very labour-intensive and difficult. Farmers produce excess food and therefore reproduce and spread more quickly than hunter-gatherers, crowding the latter out, by which I mean taking their resources and forcing them into the more difficult farming lifestyle themselves. This is argued quite eloquently by Jared Diamond in his essay The Worst Mistake in the History of the Human Race
Lol, I got my info from Jared Diamond as well; Guns, Germs, and Steel though. But the two theories can both be true.
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