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1. 1 CONSUMPTION BEHAVIOR AND THE ENVIRONMENT HOW OUR CONSUMPTION PATTERNS AFFECT NATURE
2. 2 Quotes for the Week “The individual serves the industrial system not by supplying it with savings and the resulting capital; he serves it by consuming its products.” [John Kenneth Galbraith, The New Industrial State] “Inequality has the natural and necessary effect, under the present circumstances, of materializing our upper class, vulgarizing our middle class, and brutalizing our lower class.” [Matthew Arnold (1822-1888), English poet and the literary critic of Victorian times].
3. 3 I. Two general views concerning the “causes” of environmental degradation. Paul Ehrlich argued that there are three general causes of environmental destruction. This is his IPAT relation. Human impacts (I) depend on:
Population
Affluence (consumption)
Technology
Earlier, Barry Commoner had argued that there are two causes:
Technology
The economic system (capitalism)
4. 4 Notice that these can be combined to suggest that environmental destruction depends on: 1. Population levels; 2. Consumption; 3. Technology; 4. The economic system.
5. 5 We have previously considered population. Here we will look at consumption and the economic system as related and interdependent considerations in their impacts on nature. Following that, we will consider technology as a source of environmental degradation.
6. 6 Patterns of consumption are related to aspects of the economic system within which we are embedded. The opening quote from the economist John Kenneth Galbraith suggests that an important dimension of the industrial (and the post-industrial) state is the necessity to consume. Capitalism requires that we keep consuming so that jobs will continue to be created, so that incomes can continue to earned, so that people will be able to buy (to consume) that which is necessary for the economy to keep humming along.
The necessity to consume is thus part of the engine of capitalism, and it is from consumption that we attain status. Big homes, big (and bigger cars), the latest fashions…
The connection between consumption and status was explored (and satirized–indeed ridiculed—by the economist Thorstein Veblen in his book The Theory of the Leisure Class.
7. 7 Consider the connection between consumption and status. If one lives in a capitalist system, whose claim on our loyalty resides in its ability to focus the managerial mind on the efficiency with which goods and services are provided, then it follows that the acquisition of the “stuff” arising from that revered system is an important component in the acquisition of great status. The earning of an agreeable income in a capitalist system is a symbol of success in that system. And the purpose of more income is to permit more consumption. After all, what good is money in your pocket (or in the bank)? The purpose of money is to consume stuff, and the purpose of a job is to acquire money.
8. 8 This is precisely why Matthew Arnold could write about “materializing” the upper class, “vulgarizing” the middle class, and “brutalizing” the lower class.” The upper class is materialized by its affinity for what Veblen called conspicuous consumption—big fancy cars, outrageous houses, Caribbean vacations, uncomfortable but showy clothing (high-heeled shoes, jewelry). By being rich and ostentatious the rich affect a life style that the middle class seeks to emulate.
9. 9 The middle class is thus vulgarized by its mindless imitation of the life style of the upper class. The middle class seeks to consume as does the upper class, and imagines that, by consuming like the upper class, they will be thought to be a member of that class. And the lower classes are brutalized by the system in that the upper and middle class have but one goal in mind—and that is to consume at the lowest possible cost (prices). Small wonder there is widespread opposition to efforts to make life more pleasant for the very poor (including resistance to raising the minimum wage from its current level of $5.15 per hour).
10. 10 This is not a new problem. In 14th century England there were “sumptuary” laws that prescribed exactly the types of clothing and accoutrements that could be worn by different classes of people. Since the rich were firmly in control of the governance process, this can be understood as a measure to make sure that those beneath the upper crust (the “middle class”) could not dress like them (even if they could afford to)—and thereby confuse the rigid status hierarchy.
11. 11 In the early days of our own country, we had frequent clashes between the interest of capital (capitalists) and workers. Often, these clashes erupted over demands by workers that their 60-72 hour work week be shortened somewhat, their pay increased somewhat, and the horrible conditions in which they labored might be improved. And those demands were resisted with aggressive action on the part of capitalists, and city, state, and federal governments.
12. 12 In a local and unpleasant example of this, the governor of Wisconsin mobilized the local militia in the late 1880s to assault striking workers in Milwaukee. Several workers were killed in the melee. The action was justified (rationalized is a better word) on the grounds that if the workers were paid more, and if they were allowed to have a shorter work week, the profits of the factory owners (firmly embedded in the upper class) would fall.
13. 13 We see a contemporary version of this in the outsourcing of semi-skilled work to countries whose wages and work conditions are very much inferior to those prevailing in the U.S. Another version is the success of firms such as Wal-Mart that pay very low wages, do not offer workers fringe benefits such as health-care plans, and generally are known to be harsh employers. When Wal-Mart is criticized for this treatment of their work force, others will defend them on the grounds that their prices are low. So low prices become, in a market economy, a reason to pay wages that cannot possibly lift a full-time employee above the official poverty line. At $5.15 per hour, gross earnings for a normal work year of 2,000 hours come to $10,300. The official poverty line for a household with two adults and one child is $12,682.
14. 14 And so persistent and “affordable” consumption of “stuff” is the overriding imperative of capitalism. Recall that in the aftermath of the September 11, 2001 attacks in New York and Washington, there was concern that we would stop traveling, avoid New York City, stop eating out in restaurants, stop going to concerts and the movies. In other words, that we would stop consuming. Or that we would change our consumption patterns in a way that would somehow harm the economy. Political leaders announced that it was “patriotic” to consume. That is, if we stopped consuming this would be a “victory” for the terrorists who wished to bring our economic system to its knees. And they were (and are) right. If we stop consuming, the whole thing collapses.
15. 15 We also see the importance of consumption (and jobs that feed consumption) when environmental problems arise. Imagine a factory polluting a river. Efforts to stop pollution are usually met with objections that doing so will cause jobs to be “sacrificed for a few fish.” Those who are polluting will openly resist any change in their industrial processes and in doing so will appear to be an ally of their workers. Once again, aspects of the economic system and our vision of its purpose (create jobs so that there is more income and also more “stuff” for us to consume) can be advanced as a defense of pollution.
16. 16 The issue in thinking about the global environment has less to do with population growth than it does with levels of consumption by those living. A life style driven by the “need” to acquire more stuff holds profound implications when compared to a life style in which the acquisition of stuff reaches some saturation point and people begin to choose more leisure and less work—and thus become less prodigious in their acquisition of material possessions.
17. 17 The point here is one of reaching a level of material satiation The economic concept is that of the “consumption function” given by
C = aC + ?Y
Where
a=autonomous consumption that is independent of income
?=marginal consumption (also called the Marginal Propensity to Consume, or the MPC)
? varies depending on current income. If you are very poor, ? could be quite large (0.99) meaning that you spend virtually ALL of your additional income (and thus save very little).
If you are quite rich, you might consume only a small share of additional income (0.5) and save (invest) the remainder.
Or, you might decide to work less, earn less income, and scale back your consumption (your acquisition of stuff).
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19. 19 Let us look at several assumptions about economic growth, leading to higher per-capita incomes, and thus giving rise to several scenarios of increased consumption. To do this, we need to introduce the concept of a “Standard Consumer Unit” (SCU). An SCU is the level of consumption by an “average” individual member of the world’s population given the average level of income at the time we determine the SCU (in this case, the base year will be 2000). We need the concept of an SCU because the age composition of the world’s population will change over time and we need to “normalize” consumption as we move through time.
20. 20 In 2000, the average per capita GDP for the approximately 6 billion people in the world was approximately $7,200. That is, each individual had available approximately $7,200 to be allocated between savings and the consumption of stuff. If we assume that the vast majority of this available income went for the consumption of goods and services (not all of which would qualify as “stuff” since they might purchase the services of a lawyer or a hairdresser), we see that the money available for consumption by approximately 6 billion people, at $7,200, is approximately $44,000,000,000,000.
21. 21 As the world’s population increases over the next 50 years, reaching the predicted level of, let us assume, 8 billion, we want to know the expected level of consumption of this larger population of people. We can return to our concept of a “standard consumer unit” to speculate about the income level that will be associated with that entity over the next 50 years.
22. 22 If we make the unreasonable assumption that the per capita income of the future population will not increase in real (that is, purchasing power) terms as we move forward in time, then each SCU will have the same level of “purchasing power” into the future as they now have. In that case, future consumption per SCU would not increase over the level for an SCU in 2000. But of course this does not seem plausible. It is more reasonable to suppose that economic growth will continue at some modest pace into the future. That is, I do not assume that future economic growth will be impeded (stifled) by scarcity of natural resources and other inputs.
23. 23 This implies an average SCU in the future will have more income than it has in the year 2000. Our task now is to work out what this means for future trajectories of consumption across a slowly growing, but peaking, world population. The already-rich countries are not expected to grow very much, nor can we expect the poverty stricken countries of sub-Saharan Africa to grow much. The expected growth will be in the developing countries that now account for almost 50 % of total world population (China, India, Brazil, Indonesia, Russia).
24. 24 China has 22 % of the world’s population, and its annual rate of growth has been almost 10 % each year over the past decade. China’s people seem poised to enjoy enormous increases in per capita GDP over the coming 20-50 years. India contains about 18 % of the world’s population, and it is easy to predict growth in per capita GDP of approximately 4-5 %. Brazil has about 3 % of the world’s population and a rate of growth in per capita GDP of 2-3 % does not seem unreasonable. Adding Indonesia and Russia brings us up to one-half of the world’s population expecting vigorous growth over the near term.
25. 25 If we start with the idea that one-half of the individuals in the world (our SCU) will enjoy annual increases in income approaching 4 %, it is not hard to envision increases in consumption approaching that level. That is, individuals in these countries surely have marginal propensities to consume (MPC) that are close to 1.00. So, let us assume that total disposable income (that available for discretionary spending on stuff--and services) grows at an annual rate of 4 % among people inclined to spend almost all of it on stuff.
26. 26 This growth and spending is seen in the top line in Figure 1. This forecast is based on changes in population levels, multiplied by increments of per capita GDP that will be enjoyed by individuals (standard consumer units) into the future. Below the “high-growth” consumption path, the burgundy line maps out a more modest consumption trajectory that is predicated on very modest growth prospects in all nations.
27. 27 Figure 1
28. 28 The issue here is a joint one of possible trajectories of economic growth, and how that growth will show up in various levels of future consumption. Recall the consumption function: C = aC + ?Y The crucial issue then concerns the composition of the “additional consumption”—the ?Y—to arise from future income growth.
29. 29 The obvious concern to emerge is the tension between wishing to improve the economic well being of the billions of the world’s poor, and the realization that with higher incomes they will consume in ways that reflect (mirror) the consumption habits of the already rich in the “developed” world. The “moral” obligation to lift people out of poverty runs into a “moral” concern about the implications for nature of their new-found income and wealth.
30. 30 We see here that the extent and composition of future consumption is highly dependent on the extent to which individuals seek to emulate the beliefs and attitudes associated with contemporary “culture” as reflected in American values and artifacts that dominate world media. Specifically, certain consumption patterns bestow status. Why do certain things give status?
Why do we care about status?
We are taught to feel this way by the belief system within which we are embedded. Because it is all we know, we cannot but imagine that it is normal—natural, right.
31. 31 We see that our actions are informed by our beliefs. These beliefs serve to suggest the “correct” normative guidelines for choice (called rules in the diagram), and then these rules structure the domains of action for each of us.
32. 32 This brings us back to Barry Commoner’s view that the fundamental threat to the environment is the economic system. And of course the economic system is also a reflection of our belief system. We would not have capitalism if we did not imagine that it was a good, correct, and normal system. Commoner insists that as long as the environmental debate is conducted in terms of the physical limits to growth rather than the MORAL purposes of growth, the instrumental logic of price and physical abundance will prevail.
33. 33 And this reminds us that much of our current approach to nature is to “instrumentalize” it—to see it as nothing but an instrument (tool) for our material gains. Recall Galbraith’s observation that we serve the modern industrial state by consuming its products. Our economic and political systems celebrate consumption—and it is this that Commoner regards as the most serious issue for the long run.
34. 34 This follows from the fact that the purpose of our economic system is to foster consumption, to create jobs. To see this we need the concept of endogeneity. Something is endogenous when it is part of the system and it therefore influences the outcome of that system. But by being endogenous it is in turn influenced by the system of which it is an integral part.
35. 35 Finally, a few words about technology First what is technology?
Technology is properly thought of in two regards:
Technology allows us to do new things
Technology allows us to do the same things more cheaply than at the present
36. 36 Technology Has Two Aspects Knowledge
A technique (a tool) which is itself embodied knowledge
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So in one respect, new technology is new knowledge put to use
37. 37 Technology Is Not Inherently Good or Bad Polio vaccine seems good
DDT helps control malaria and thus seems good
Air conditioning seems good
Electricity seems good
The automobile seems good
38. 38 The issue therefore must concern not technology per se, but the manifestations, entailments, and implications of technology The inevitable dialectics of technology
Is it good or bad? Why?
The role of technology as a mediator between humans and nature
And this brings us back to the central role of beliefs and behavior
39. 39 THINKING ABOUT BELIEFS AND BEHAVIOR
