US consumerism — citizens driven excessively to buy goods and services and accumulate consumable wealth — is cursed almost everywhere. Many environmentalists blame it for global warming. Critics of the current economic disasters often point to home-buying gluttony as the cause. Many see consumerism behind the borrowing that makes the US the world’s greatest debtor nation today. Moralists of otherwise diverse motivations agree on attacking consumerist materialism as against spiritual values. Educators blame it for distracting young people’s interest from learning. Psychologists attribute mass loneliness and depression to unrealizable expectations of what commodities can deliver to consumers. Physicians decry the diseases, stress, and exhaustion linked to excessive work driven by desire for excessive consumption. Yet, for a long time, exhortations by all such folks have mostly failed to slow, let alone reverse, US consumerism.
The question is why? The answer is not advertising, since that begs the question of why that industry should have been so successful in the US and grown to such influence. Nor is it plausible to attribute some national personality flaw to our citizens.
A big part of the answer lies in the unique history of US capitalism. From 1820 to 1970, over every decade, average real wages rose enabling a rising standard of consumption. These 150 years rooted workers’ beliefs that the USA was a “chosen” place where every generation would live better than its parents. This was “the good news” of US capitalism for the workers. The “bad news” was that the average worker’s productivity — the amount of output each worker produced for his/her employer to sell — rose even faster. This was because workers were relentlessly driven by employers to work harder, faster, and with ever more (and more complicated) machinery. Thus, alongside rising workers’ wages, faster rising productivity brought even bigger gains for employers.
An unspoken, historic deal defined US capitalism for those150 years. Capitalists paid rising wages to enable rising working class consumption; the workers had to provide rising work effort, rising profitability, and thus the even faster rise of profits. Because the rise in workers consumption was slower than the rise of their productivity — the output that they delivered to employers — the gap between workers and employers widened across US history. A fundamentally unequal society emerged, one that forever mocked, challenged, and undermined the ideological claims of the US to be the land of equality and opportunity. The working class labored ever harder, consumed more, and yet fell ever further behind the minority who lived off the growing difference between what workers produced and their wages.
This deal might have collapsed at any time if US workers rebelled against the organization of production in the US. This could have occurred if rising wages did not suffice to make them ignore the growing inequality of US life, or if they rejected subordination to ever more automated, exhausting work disciplines, or if they refused to deliver ever more wealth to ever fewer corporate boards of directors of immense corporations ever further removed from them in power, wealth, and access to culture. For that deal to survive — for US capitalism to have been “successful” for so long — something had to emerge in US society that prevented any of these deal-breakers from happening. Enter consumerism!
The idea settled into US culture that consumption was the proper goal of work and the measure of personal worth, of one’s “success” in life. Business boosters and ideologues pushed that idea, but they were hardly alone. Advertisers made it their constant message. Trade unions focused also on raising wages and consumption — just what US capitalism could and did deliver — rather than challenging the organization of production. So too did most left movements. Economists did their part by building modern economics on the unquestioned axiom that labor was a burden for which consumption enabled by wages was the compensation. This definition of economics required banishing the alternative of Marxian economics from schools. The mass media proceeded as if it were likewise obvious common sense that all any employee really cared about was the size of his/her wage/salary. Of course, some dissident voices — especially on the left — rejected these ideas and this capital/labor deal, but consumerism usually all but drowned them out.
Consumerism’s deep roots in the psyche of US workers explains their reactions when real wages stopped rising in the 1970s and since. They simply kept on buying more commodities. To pay for them, workers took on more hours of labor and borrowed vast sums. Worker exhaustion rose accordingly, likewise the number of family members sent out to work (straining “family values” to the breaking point). Anxiety intensified over frightening family debt levels. In this situation, the current scandal of sub-prime mortgages was a predictable disaster waiting to happen.
The 150 year deal has been broken. The business side no longer needs it; it hasn’t since the 1970s. That is why real wages stopped rising. Most workers just postponed facing that reality and its implications: by having more family members do more work and by heavy borrowing. Meanwhile, able and willing laborers abroad who accept wages far lower than in the US beckons. US corporations are moving to produce there. They will ship “home” the goods and services they produce abroad so long as US citizens can afford them. When that no longer pays, they will redirect shipments to the rest of the world market.
Consumerism was a necessary component of US capitalism from the 1820s to the 1970s. As an ideology uniquely suited to that capitalism, it was articulated, cultivated, and supported by different social groups. Whatever fun comedians and critics poke at consumerism, it was not some lovable human foible, nor some quirk of our culture. It was the glue holding US capitalism together for a long time. Even more important, business dissolved that glue in the 1970s, and now US workers have exhausted ways to postpone the results of that dissolution. Storms are rising.
Rick Wolff is Professor of Economics at University of Massachusetts at Amherst. He is the author of many books and articles, including (with Stephen Resnick) Class Theory and History: Capitalism and Communism in the U.S.S.R. (Routledge, 2002) and (with Stephen Resnick) New Departures in Marxian Theory (Routledge, 2006).