Cash-Flow Culprit: Industrialization at the Heart of Modern American Consumerism

Given that our species, like others, is prone to ornamentation, it is tempting to suggest that consumerism, understood as the acquisition of goods and services beyond one’s immediate needs for survival, is simply social display, like the peacock’s tail. Indeed, evolutionary behaviorists like Gad Saad suggest that items like luxury cars are the human equivalent of a peacock’s tail: a display of “social wins” (Weissmueller 2:24). Author Viviana Zelizer also espouses the social significance of commercialization and claims that, no matter how much more Americans buy today than they have in the past, money will always have a social “life,” and will not render human experience “cold, distant and calculating,” as is popularly supposed (66, 2).

Still, recent years have brought to the United States and the rest of the developed world a steady habit of overproduction and over-purchasing that is unlike that of previous centuries. Peter Searns writes in Consumerism in World History that, although “full-blown consumerism, in terms of intensity, commitment to novelty and application to numerous social groups,” has existed for about 300 years, “there was a new surge around 1900” (viii). It appears that forces related to the shift away from an agrarian economy and toward an industrialized economy caused waves that have reverberated through the 20th century to bring us wages, cash, debt and consumerism in equal plenty.

After the industrial revolution brought machines and factories to Europe and the Americas in the late 19th century, it created a new class of workers: the wage earners. According to Louis Hayman in Borrow: The American Way of Debt, it was this group of people that changed the face of American. Instead of borrowing on assets the way farmers had done, wage workers turned their “future income into present consumption” (11). Lending to consumers, which was illegal in the 1800s was legal after the 20s in the United States. Naturally existing human dispositions to have more and to show more than combined with this cash flow to create the gusto for living that was the 1920s (Weissmueller, Hayman 11).

The great depression only put a dent in the rise of consumption and, after World War II, American consumers were openly encouraged to buy goods. “Economic recovery after a decade and a half of depression and war depended on a dynamic mass-consumption economy," suggests historian Elizabeth Cohen, and “the American consumer was praised as a patriotic citizen in the 1950s, contributing to the ultimate success of the American way of life” (“The Rise of American Consumerism”). Meanwhile, in America, the legal interest rate rose, making the financing of debt profitable (Hayman 7). Together with a revolution in the production of cars, homes and refrigerators, the perfect storm of demand, moral purpose and opportunity began to grow the American dependence on installment purchasing. Additionally, as Louis Hayman notes, “lenders could now, for the first time, resell their debt,” so pyramids of financial transactions began to build between the consumers who represented the risk and the lenders who held it (Hayman 7, 8).

Eventually, “more, newer and better” became a way of life, morally upheld as patriotic and encouraged by public officials (Maxed Out). Even though a generation of Americans held that “in the good old days nobody borrowed, [the] commodified debt enabled the growth of the twentieth-century economy” (Hayman 11).

Consumerism has many critics. One widespread concern is that consumers are misinformed, that financial institutions hide behind hidden policies, cryptic contracts and opaque business transactions to victimize buyers and to prey on those who can least afford it (Maxed Out). However, other critics suggest that, even when consumers are well informed, they tend to make decisions more in line with maintaining social status than with frugal finance. Gad Saad claims that consumerism is an “alluring trap to fall into,” even when we have information about why it is better to avoid buying unnecessary goods (Weissmueller 6:27). “The standard social-marketing perspective claims that consumers engage in behaviors that have deleterious consequences because they don’t have the right information,” he says. The implication is, “Teach them and they will behave better. But we know for a fact that’s not right” (Weissmueller 1:15).

In conclusion, despite the fact that acquiring goods outside of the needs of survival has had a long history in the human economy, it is since the industrial revolution of 19th-century Europe that consumerism, supported by a new wage-earning public, institutionalized, profitable interest rates and an endless supply of manufactured goods began to take shape (Stearns viii). Today, the installment-lending practices launched in the U.S. after World War I as a result of these forces still represent the way Americans buy homes, cars, educations and even hamburgers (Maxed Out). Despite this commoditization, however, money has not stripped the culture of its human elements. No matter how much we buy and how much debt we take on, the “social ‘life’” of money follows the social life of people (Zelizer 66). Which is to say that money only represents human value placements and does not generate them. What current trends in the information age do to economic over-indulgence in the future will be the source of discussion for analysts to come. If the past is any gauge, the forces to come will be neither directly predictable nor irreversibly catastrophic.

Works Cited

Hyman, Louis. Borrow: The American Way of Debt. New York: Vintage, 2012.

Maxed Out. Dir. James D. Scurlock. Docs, Inc. TopDocumentaryFilms.com, [date posted]. Dec 5, 2013.

Miles, Steven. Consumerism as a Way of Life. London: SAGE, 1998.

Stearns, Peter. Consumerism in World History: The Global Transformation of Desire. New York: Routledge, 2001.

“The Rise of American Consumerism.” The American Experience: Tupperware!. PBS Online, 2004. Web. 6 Dec. 2013.

Weissmueller, Zach. “Evolutionary Psychologist Gad Saad on Consumerism, Sex, Advertising, and Human Nature.” Reason.tv. Reason.com, 6 Dec. 2013. Web. 15 Nov. 2011.

Zelizer, Viviana A. The Social Meaning of Money. New York: HarperCollins, 1994. Print.