Saved by the crash

The recession that arrived in 2008 seemed to some to herald a change in direction in the West, a return to more balanced and healthy ways of living. Certainly, people began to borrow less and save more. In some respects this was a welcome, if unsurprising, development. However, higher savings rates are not the answer to climate change. Although they reduce consumption in the short to medium term, in the long term higher savings will only make the problem worse. Higher savings facilitate more investment and more investment fuels faster economic growth. Looked at another way, saving just means deferring consumption, and deferring consumption means more consumption later because savings earn interest. The answer lies in consuming less now and forever.

There is some evidence that Western consumers reacted to the recession by abandoning their profligate ways and returning to older values of thrift and moderation. Certainly, 2009 saw many stories about new community groups, books and websites telling us how to save money by economising, making things at home and buying second hand. Even Rupert Murdoch's Wall Street Journal began telling its readers how to have a 'want-free month', how to use the internet to barter for goods and how to cut off financial support to adult children.43

The new frugality takes various forms, including cutting back, bartering, buying second hand, making things last and downshifting—the voluntary decision to reduce income and consumption. Their common feature is that they represent a partial withdrawal from the market. The irony is that if these trends were to have an appreciable impact on consumer behaviour the recession would be prolonged because it is their opposites that make GDP grow. Prudence, moderation, delaying gratification—all of these behaviours, although of proven benefit to our wellbeing, are inimical to economic growth. The big question is whether they are a sign of a permanent return to earlier values of parsimony and restraint, or whether we will soon be overtaken by the hyper-consumerist values that defined the last boom. Certainly, the return to frugality would reflect a yearning in the West that has always run deeper than the desire for more stuff. A poll in 2004 found that most Americans believe that their society's priorities are all wrong. More than nine in ten (93 per cent) believe that Americans are too focused on working and making money, and not enough on family and community.44 Remarkably, nine in ten (88 per cent) also believe that American society is too materialistic, with too much emphasis on shopping. And at the height of the biggest consumption binge in history, 90 per cent said that excessive materialism meant people were living beyond their means and ending up in debt.

In a 1930 essay titled 'Economic Possibilities for Our Grandchildren', John Maynard Keynes imagined what life would be like after another century of economic growth, a state now reached by most people in affluent nations. For the first time, he wrote, humans will be able to choose to live 'wisely and agreeably and well'. 'It will be those people, who can keep alive, and cultivate to a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.'45 Is it possible to imagine a society in which we live up to Keynes' vision, one in which we are no longer obsessed with growth and consumption and instead cultivate the art of life? It would be a society in which we nurture the things that really do improve our wellbeing, rather than dreaming evermore of the things that only money can buy. In a way the recipe for such a society is simple. Sooner or later, we spend what we earn. So if we want to consume less we must earn less, and if we want to earn less we must work less. At least, we must perform less paid work. If that sounds shocking today, it is nothing more than a call to resume the great historical trend of declining working hours. Until the trend was disrupted in the 1980s, falling working hours were regarded as the surest sign of social progress. A return to the downward trend would mean a social choice to take less of the gains from productivity growth in money income and more in free time. Society could be just as vibrant and technologically innovative; the difference would be that we would have much more time for activities other than paid work, including caring for others, education, community work, hobbies and leisure. One of the most effective long-term policies that Western governments could adopt to tackle growing greenhouse gas emissions would be to redefine progress so that falling working hours became its foremost indicator. For that to happen we would first need to redefine ourselves.

So will the recession be an opportunity for new values to become entrenched, ones that will rule out a repeat of the rampant materialism and debt-fuelled consumption that marked the 1990s and 2000s? The depressing answer must be 'no', for in the course of the last long boom the marketers planted a poison pill deep within affluent society—a generation of children consciously moulded into hyper-consumers. Figures for the United States tell a frightening story of the results of the sustained campaign by marketers, beginning in the early 1990s, to target children. In 1983 companies spent $100 million annually advertising to children. By the end of the boom they were spending more than $17 billion. Each year children aged two to eleven see more than 25,000 television advertisements.46 Susan Lynn, Associate Director of the Harvard University-affiliated Media Center for Children, reinforces the message: 47

This generation of children is marketed to as never before.

Kids are being marketed to through brand licensing, through product placement, marketing in schools, through stealth marketing, through viral marketing. There are DVDs, there are video games, there's the Internet, there are iPods, there are cell phones. There are so many more ways of reaching children, so that there's a brand in front of a child's face every moment of every day.

Children now begin to recognise corporate logos when they are as young as six months. A British study found that for one in four children the first recognisable word they utter is a brand name.48 A generation of children, now reaching their late teens, has grown up in an unrelenting barrage of commercial messages, all with one underlying theme: that the path to happiness is through consumption. The marketers do not apologise for this; they brag about it. A professor of marketing speaks for them when he declares: 49

The positive effect I see is that they are able to function in the marketplace at an earlier age. And in a full-blown developed, industrialized society, that's where we satisfy most of our needs—in the marketplace.

This captive generation of children, whose minds have been shaped by marketing, will be the powerhouse that drives the next consumer boom. Their capacity to moderate their desires has been systematically dismantled from birth, and this weakness will naturally be exploited by companies everywhere. Who is going to stop them?

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