Consuming Culture

The National Post has an enlightening piece entitled “Consuming passion.” The subtitle summarizes well the cultural and societal shift that we may be facing when they write: “Changing Fortunes: Is this the end of the big spend?” As Canadians and Americans are faced with a faltering economy, the will have no choice but to cut back in spending. This will be difficult as we have built a society founded on a culture of consumption and spending. We will have to address this, and this is one of the goals of this blog. Below, an excerpt from Consuming Passion that is well worth reading.

The economy may well dictate a need to curtail consumption habits, but in the era of walk-in closets, three-car garages and televisions in every bedroom, will people really be able to stop buying goods?

Cultural anthropologists suggest that modern identities are so entrenched in shopping that in a weakening economy, people will simply adjust their spending rather than surrender the only way of life many have known.

Grant McCracken, an author and culture analyst, notes that modern consumers — and people like him who study them — are challenged by their lack of experience in dealing with waning fortunes.

“My guess is that people will gear down. That’s the tricky thing. We don’t have a routine or a ritual or a set of instructions for gearing down,” he said. “What happens is people go, ‘I am obliged to start stopping spending, but what does that mean exactly?’

“Every purchase has a less expensive version of itself and in a mechanical way, that’s the way some people will make the decision.

“They’ll choose the thing less expensive than the thing they otherwise would have bought … It doesn’t mean necessarily that people buy less – it means that they buy different. So, more time at Canadian Tire and less time on Bloor Street.”

The transformation of shopping from a utilitarian task to a means of entertainment and indulgence began as far back as the 15th century, when people first used consumer goods to signal their status, says Mr. McCracken. Previously, he said, there had been limited means in fashion to distinguish oneself.

The use of material items to make status claims continued well into the era of 1950s post-war prosperity, when consumers began snapping up split-level homes and purchasing showy cars with fins. The 1960s and ’70s saw somewhat of a repudiation of a consumer society, which was later reinstalled in the 1980s.

Despite economic downturns that have taken place at least once every decade since the 1980s, consumers have rarely been without the means to keep spending, often taking on debt and leveraging their assets in order to do so.

George Rosenbaum, a market researcher and co-founder of Chicago-based Leo J. Shapiro & Associates, believes the high debt loads can be blamed in part on consumers intoxicated by the idea of affluence.

“We’ve been really feeding in large part off our home wealth to attempt to improve our standard of living as measured by what we buy and own,” he said.

“We have had an emotional attachment to shopping as a consequence of prosperity and high debt. As home prices increased almost continuously over the past 15 years, people felt more affluent, many took out home-equity loans, which by some were used just to buy things.”

Until American consumers began in large numbers to default on their mortgages, many had grown dangerously comfortable living well on credit, says Frederick Langrehr, a marketing professor at Valparaiso University in Indiana.

“Your house became your ATM. You would renegotiate your mortgage, get a lower rate so you get a bounce right then and you’d also pull some equity out.”

The compulsion to live beyond one’s means is rooted in the consumer’s desire to improve their standing in life, he said.

“If you work with the assumption that people would rather maintain or increase their level of living and they want to have at least the same as what they had when they were growing up … or more than what their parents had — then people will try to do as much as they can to maintain that, to keep that level,” he said.

Robert Fischer, professor at the University of Alberta School of Business, said he has observed a staggering difference in his parents’ relationship to money as compared to that of his children.

“For our parents growing up, I know my parents didn’t have a car until they were married for four years. They probably couldn’t borrow money and they just didn’t think it was the right thing to do; to consume more than you were earning,” he said.

“When I look at my own kids, I think because house prices have gone up so much and even though they seem to have much more availability to credit than I did at their age, they are certainly using it in a more generous, undisciplined manner … We send young people into the world with a really good sense of just how difficult it is to get out of debt once you’re into it and the value of delayed gratification. I think things are going to change now.”

Meg Meloy, a marketing professor at Pennsylvania State University, expects an economic downturn will be especially challenging for those consumers, particularly younger ones, whose sense of self-worth is realized in the activity of shopping.

“People who want to be the innovators, they derive so much benefit to their psyche from having the latest, being very, very up to date and current, that I think for them, if they can’t do that, it will be enormously hard on them.

“I think shopping is tied into their self-esteem. So, it’s not just pleasure, but it’s good for their self-esteem to buy.”

Those attitudes go a long way toward explaining why the fixation with shopping has remained strong despite the recent onslaught of economic pressures that would suggest contrary behaviour, but experts are beginning to see some hints of change.

Mr. Rosenbaum, the market researcher, noticed a change in consumer behaviour that began with gas price increases and stalled income growth about a year ago. “What’s happening now … is really a transformation of the consumer,” he said.

“The emotion there is the drive that people have to continue to be bigger consumers. This is now, starting about a year ago, reversing. But so far, this reversal is not causing a lot of pain. The reason it’s not causing a lot of pain for middle [income] and more affluent households is because they are dropping price points by shifting where they shop. You’re still acquiring most – if not all of the goods – you just may not be buying a preferred or popular brand.

“We’ve had so much fat in our consumption that downsizing it is not so painful.”

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2 Responses to Consuming Culture

  1. You know, I have to tell you, I really enjoy this blog and the insight from everyone who participates. I find it to be refreshing and very informative. I wish there were more blogs like it. Anyway, I felt it was about time I posted, Ive spent most of my time here just lurking and reading, but today for some reason I just felt compelled to say this.

  2. thepennypincher says:

    Thank you! It is always nice to know that someone is reading.

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