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Meaningful Metrics for a Smart Society
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Date: 2018-02-17 Page is: DBtxt001.php L0700-SS-CONSUMPTION


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Does more consumption result in a better quality of life? GO InPage 'A'
More consumption is foundation for economic (GDP) growth GO InPage 'B'
More consumption enables more profit and financial wealth GO InPage 'C'
More consumption accelerates environmental degradation GO InPage 'D'

Does more consumption result in a better quality of life? GO TOP
The answer is YES and NO
When there is shortage of essential products ... that is goods and services ... more consumption means that the shortages have been alleviated and there is a better quality of life.
TPB Note: I am old enough to remember the shortages in the UK during the Second World War and for a long time afterwards. Rationing was a way of life lasting into the early 50s.The shorrtages in Continental Europe were considerably worse than in the UK during the war, but probably eased faster after the war courtesy of initiatives like the Marshall Plan.
In more recent times, shortage has given way to abundance in the world's rich countries, and the relationship between consumption and quality of life has changed. More and more people are eating too much and becoming overweight and obese. Health issues like diabetes are more prevalent with abundance thn with shortage.

More consumption is foundation for economic (GDP) growth GO TOP
This is true
But GDP is a dangerous measure ... its limitations were recognized by prominent economists like Kuznets who had a big role in developing the measure and political leaders like Robert Kenneday who described all its weaknesses in a famous speach in 1968.
It seems to remain in use for two big reasons:
The first is that the corporate world finds it a lot easier to generate profits when the economy is growing than in other conditions. Making GDP growth a goal of economic policy makes corporate management a whole lot easier.
TPB Note: I had a series of corporate financial positions in the late 60s and through the 70s. The GoGo years of the 1960s made profit growth easy, while the post GoGo stagnation of the 1970s were a whole lot harder.
The second is that there is a lot of intertia in modern governance.
TPB Note: I participated in a conference workshop several years ago (around 2007?) where several people who worked for the National Bureau of Statistics explained the steps that would be needed in order to change the way GDP gets calculated ... and the virtual impossibility of getting consensus about actually changing to something else, no matter how much better!

More consumption enables more profit and financial wealth GO TOP
True ... more consumption means more sales, more profits and more wealth
The problem is that more consumption means more production ... and production is a big problem for sustainability.
The phrase 'Its money that makes the world go round' might be better expressed with reference to profits. For a very long time, corporate decisions have been made almost exclusively in order to make more profit with a view to maximising stockholder value. Because maximising profit has been of such importance, business strategy has concentrated on doing whatever it takes to make more profit. The easiest way to make more profit is to have more sales, which happens when there is more consumption.
Advertising is one of the ways the corporate world invests to encourage more consumption. While the advertising talks about how much better the customer will feel, the underlying purpose is simply to get people to buy more stuff.

More consumption accelerates environmental degradation GO TOP
True ... and a very serious issue
The United States (and Canada) have extremely high standards of living and high levels of consumption. These countries are also the largest per capita emitters of greenhouse gases and have been responsible for all sorts of other environmental pollution.
Consumption requires production and a complete supply chain prior to final sale. Almost every element of natural capital is depleted or degraded by the supply chain required to support consumption.
In the main, the supply chain is driven by mainly by price without much consideration of the impacts within the supply chain of impact on people (mainly the workforce) and on the environment. Until very recently everything to do with 'externalities' ... that is impact on people and the environment ... has been ignored. Increasingly consumers are taking these matters into consideration, but reliable information about corporate behavior through the wholc of the supply chain remains very weak.
More and more, 'stories' are surfacing about the behavior of companies known to be suppliers of 'brand' goods being sold in rich countries ... but comprehensive information remains elusive. This is one of the challenges to be addressed by TVM and a wide range of activists and well-meaning collaborators.

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