Much of the global North has been struggling since 2007 to regain its former economic vitality and the protracted post-crisis period has given rise to a “new normal” characterised by high unemployment, sluggish consumer demand, volatile financial markets, and political gridlock. Viewed against other trends like stagnating wages, widening income inequality, and contracting middle-class security these developments suggest an erosion of several important pillars of the post-World War II consumer society. While many of the long-standing cultural assumptions that have organised everyday life remain in place, they are showing increasing signs of strain.

Social psychologists have long noted the disparity that prevails between mental models of understanding and the corporeal world. We assemble our conceptions from a complex bricolage of lay and tacit knowledge, mimetic duplication, political rhetoric, personal and familial experience, social context, superstition, religion and more. Because large buffers generally exist between human activities and the world around us it is normally possible to tolerate significant discrepancies without incurring perilous harm. In other words, live in a world that allows for wide margins of error. However, as scholars of societal collapse have demonstrated, failures to properly conjure accurate interpretations of extent conditions can have extremely parlous consequences. For example, the contemporary situation surrounding global climate change is largely the result of poorly articulated feedback loops between biophysical reality and human understanding.

The crisis as a cultural dissonance

Similar divergence is at play in the realm of economic affairs. Statistical indicators of phenomena like unemployment and economic growth are embedded in various expert discourses that rely on politically contested interpretations. In addition, when extent circumstances shift, large cleavages open up between societal expectations and lived experiences and these gaps can, in turn, lead to marked indecisiveness. In short, it takes time for our mental conceptions to adjust to our new circumstances.

It appears that the current breach between dominant public narratives regarding the economy and actualised conditions in many Anglo-European countries is widening and an expanding pattern of dissonance is taking hold. Dissonance is typically understood to be an individualised condition but this conflictive condition can also become manifest at a societal level. We can use the notion of dissonance—or more specifically collective or cultural dissonance—to explore how the current period of economic instability is contributing to macro-scale discord in some of the most severely affected countries. The aim here is to examine how recent years of economic overreach, and the subsequent process of financial retrenchment, have led to disjointedness between prevalent expectations surrounding consumption and actual opportunities to consume.

The narrowing of dissonance typically occurs gradually, but the gap can also close abruptly and dramatically. With respect to the disparity between the grim fiscal condition in the United States and the continued willingness of investors to fund the country’s large deficit, historian Niall Ferguson writes in Civilization: The West and the Rest,

“Such complacency can persist for a surprising long time—long after the statistical indicators have started flashing red. But one day, a seemingly random piece of bad news—perhaps a negative report by a rating agency—will make the headlines during an otherwise quiet news cycle. Suddenly, it will be not just a few specialists who worry about the sustainability of US fiscal policy but also the public at large, not to mention investors abroad. It is this shift that is crucial, for a complex adaptive system is in big trouble when a critical mass of its constituents loses faith in its viability.”

And it is not only the United States that is exposed in this way. This is a lesson that several European countries—most notably Portugal, Ireland, Greece, and Spain have experienced with devastating consequences.

As destructive as the ongoing financial turmoil has been, we deceive ourselves by underestimating the frequency of such events. Over the past half century, there has been no shortage of economic transitions and these disruptions have typically opened up large fissures between societal expectations and lived experiences. For instance, the economic plans implemented by occupying military governments in the aftermath of World War II induced widespread cultural dissonance in Germany and Japan. For somewhat different reasons, mostly associated with the final stages of imperial decline and the debilitating burdens of two costly wars, the British public was forced to recalibrate its aspirations after 1945.

Though it may at times be difficult to conceive, change is inevitable and despite the common perception that we are tragically locked into lifestyles powerfully delineated by consumerism, new avenues will avail themselves.

The dissolution of the Soviet Union is though the most dramatic instance of economic transition in recent memory. Most of Eastern Europe and the Balkans also experienced a similar phase of reorganisation and it took years for societal expectations and lived experiences to realign, and in some cases pronounced public ambivalence, or indeed resistance, to consumerism remains a notable feature of everyday life in these countries. And these are only some of the upheavals of the last few decades. A more elaborate list would need to include China, Vietnam, South Korea, Chile, Cuba, and numerous others.

In all of these places, preexisting conceptual and institutional frameworks set the boundary conditions for societal hopes and desires. Either due to war, revolution, or the accumulated weight of internal contradictions, once-prevailing systems of economic organisation were supplanted by new modes. Because of lag effects, it took time for the affected populations to accommodate themselves to the new circumstances and during this period of adjustment they faced profound challenges. The experience was roughly analogous to trying to find one’s way through an unfamiliar city using an outdated map.

There is also a useful insight here for critics of consumerism. The relative frequency of economic transitions suggests that the dominant organisational logic of Anglo-European countries is not as immutable as it sometimes seems. Though it may at times be difficult to conceive, change is inevitable and despite the common perception that we are tragically locked into lifestyles powerfully delineated by consumerism, new avenues will avail themselves. Despite the claims of prominent development economists, a high mass-consumption society is not the endpoint of history. Could it be that a postconsumerist era, with hardly any notice, is already creeping up on us?

Ecologic transition through austerity?

Indeed, it is becoming increasingly apparent that the current phase of economic instability is not just a periodic downturn in the customary cycle of capitalist boom and bust, but is rather emblematic of a more extensive process of structural reorganisation. A correspondent for the Los Angeles affiliate of a major news organisation captured the spirit of the time when he intoned back in 2008, “Is this the end of the consumer society? The evidence is growing that America is undergoing a fundamental economic restructuring…[and there is] the possibility that some radical cultural shift is taking place…How does America adjust to a zero growth economy? Can we live without all the toys of a hyperconsumer society?”

Let us adopt the perspective of the longue durée. The dominant mode of economic organisation over the past 250 years has progressed from agrarianism to industrialism to consumerism. The early consumerist era was distinguished by a Fordist model of production and consumption—later subsumed by its Keynesian successor—whereby relatively well-paying jobs provided worker-consumers with the income necessary to assimilate growing volumes of mass-manufactured goods. As wages and purchasing power began to stagnate during the late 1970s, the virtuous cycle started to dissipate. However, bank deregulation and the attendant revolution in consumer finance injected unprecedented credit into consumer markets. This infusion enabled consumers to artificially maintain their lifestyles and to catalyse a period of robust consumption-driven economic growth. This process of expansion ebbed and flowed until 2007 when efforts to increase purchasing capacity through ever-more innovative techniques came crashing down in a wave of worthless credit-default swaps, impenetrable derivative deals, and various other financial products of dubious integrity.

In the aftermath of this implosion, analysts began to observe some intriguing trends, some of which had actually been set in train prior to the financial collapse. For instance, several nations appear to have reached the point of “peak car” exemplified by declining vehicle-fleet size, vehicle miles travelled, and licensed drivers (within the younger age cohorts). The reasons for this situation likely vary across countries, but they can be attributed to a combination of more volatile commodity prices (especially oil), increasing automobile operating costs, expanding and revitalising public transport systems, reurbanising metropolitan populations, untenable congestion levels, demographic shifts, and widening income inequality.

Are these developments harbingers that the consumerist era of continually growing volumes of resource throughputs is coming to a close? An observation by Andrew Benett and Ann O’Reilly (2010), writing in The Atlantic magazine, merits attention.

“The simple truth is that the elements that permitted hyperconsumption to flourish (near-full employment, easy credit, plentiful natural resource) aren’t coming back anytime soon, if at all. The employment sector is in upheaval, way many job categories obsolete. Easy credit has all but evaporated, and the world’s burgeoning middle classes will only intensify the pressure on our increasingly scarce resources. So even if the consumer masses wanted to go back to mindless excess, they could not.”

A growing number of observers are beginning to grasp this situation and the austerity policies being implemented in Europe and the United States are likely to hasten this transition by dampening purchasing power. This development imposes an ironic and perhaps unexpected twist on efforts to transcend currently ecologically untenable modes of consumption—sustainable consumption is being triggered by privation rather than affluence.

Sustainable consumption is accordingly coming to be operationalised through a multitude of efforts: alternative agro-food networks, community-energy schemes, worker-owner cooperatives, passive home construction, transition towns, and planning projects to reappropriate the public streetscape for nonmotorised activities. These are commendable initiatives, but like most social experiments they are cutting against the organisational logic of a disabled, but still intact, consumerist system. It will be a major undertaking to scale up these schemes to a level where they might meaningfully challenge dominant lifestyle modes.

A precarious American dream

Let us briefly explore current developments first in the United States and Europe before shifting to consider the potentially instructive case of Japan.

The term “American Dream” was coined by James Truslow Adams in 1931 to capture public resilience during the Great Depression. Current usage of the expression is multifaceted and encompasses economic opportunity, freedom, financial security, happiness, employment satisfaction, homeownership, and wealth. While there has always been disparity between the American Dream as an aspirational heuristic and its realisation, the fit over time has been sufficiently close to ensure the legitimacy of the general idea. In 2010, 67% of the public reported that they had confidence in being able to attain it. This level of resolve may seem surprising given the actual status of the American Dream. A recent status report by Robert Borosage and Katrina van den Heuvel in The Nation magazine is instructive.

“Every element of the dream is imperilled. Wages for the 70% of Americans without a college education have declined dramatically over the past forty years, although CEO salaries and corporate profits soared. Corporations continue to ship good jobs abroad, while the few jobs created at home are disproportionately in the low-wage service sector. One in four homes is underwater, devastating what has been the largest single asset for most middle-class families. Healthcare costs are soaring, with nearly 50 million uninsured. Half of all Americans have no retirement plan at work, pensions are disappearing and even Social Security and Medicare are targeted for cuts. College debt now exceeds credit card debt, with defaults rising and more and more students priced out of higher education.”

Throughout the post-World War II period, the suburban house has been at the heart of the American Dream. Less readily acknowledged is that this housing style—and by extension consumer society in the United States more generally—has received massive subsidies specifically targeted at relatively wealthy homeowners. These inducements have been delivered primarily through the tax deductibility of mortgage interest and the provision of federal guarantees on home loans. There is though growing recognition that such favourable treatment is no longer affordable (estimated to cost US$100 billion annually) and the issue of how best to reform mortgage lending is moving up the political agenda. It will take time to garner action on such a coveted entitlement, but the thirty- or forty-year mortgage, a mainstay of American consumerism, is no longer viable in an era when homeowners have few inhibitions about exercising their strategic default option.

New social movements of the middle class?

The precariousness of the American Dream is also attributable to the income dynamics affecting the country’s shrinking middle class which is becoming polarised between a relatively small cadre of extremely affluent consumers and a far more sizeable group of people engaged in basic household provisioning supplemented by occasional forays to deep-discount retailers. It is unsurprising that incipient social movements on both the right and the left sides of the political spectrum are using the growing elusiveness of the American Dream as a springboard.

In the face of this roiling tumult, there seems to be conspicuous inability to acknowledge that the giddy, credit-fueled days prior to the Great Recession are unlikely to return. With little prospect of reversing wage stagnation or recharging access to unbridled consumer credit, attention has turned instead to tax cuts as the next best way to supplement personal incomes. The primary problem with this strategy is that household consumption is inseparable from public investment. The personal automobile, for example, has little value when governments cannot maintain the roadways.

There is nonetheless a point at which short-term accommodation to challenging economic circumstances elides into the status quo. A tendency exists to presume that many younger entrants to the labour market (members of so-called Generation Y) are simply biding their time until the employment situation improves. But what happens if a return to robust job growth takes a decade or longer to achieve, and in the meantime provisional arrangements of, say, living at home with parents, become entrenched? It is plausible that avoidance of onerous housing payments and a more streamlined lifestyle will gain acceptance in exchange for engaging in more creative—but less remunerative—activities.

One manifestation of the uncertain current and future status of the American Dream, both as an idea and a realisable objective, is the vigorous debate taking place over American declinism versus exceptionalism. As interesting as this dispute may be as an intellectual exercise, both sides may be misreading the evidence. It is likely less a matter of demise or inimitability and more a case of fundamental economic realignment, one where familiar organisational logics are being upended.

Low growth in Europe

Europeans, of course, do not subscribe to an equivalent synthesising cultural narrative predicated on economic opportunity, material accumulation, financial independence, and libertarian freedom. The closest approximations to a “European Dream” are founded on colonialist nostalgia or a combination of social democracy and trans-European integration. However, these aspirations are now being challenged by the imposition of harsh austerity measures to curtail public expenditures, to prevent further deterioration of bond ratings, and (for countries in the euro zone) to preserve the common currency. The requisite budgetary belt-tightening has led in recent months to high unemployment, violent riots, tax boycotts, and government collapses. The orthodox view is that aggressive cuts will reduce bloated public bureaucracies, restore investor confidence, and set the stage for renewed economic growth. While some headway has been made on the first two objectives, it seems clear that reversion to business as usual is not going to occur as quickly as proponents have promised. It may be the case, for better or worse, that much of Europe will be looking at low growth (or conceivably degrowth) for the foreseeable future.

Given these circumstances, ordinary people, especially in the most severely affected countries, have begun to face up to this new reality. Amidst all of the disillusionment, emphasis on fiscal rectitude, and efforts to recatalyse consumer spending, numerous grassroots social innovations are being pursued. It is admittedly difficult to assemble these developments into a complete picture, but they merit careful attention. In the interests of space, let us take up two national cases from opposite ends of the continent.

In the UK, a harsh critique of capitalism has gained considerable ground. This appraisal is not random or directionless, but rather is being shaped by an active politics of energy and climate change. By one count, more than 500 community renewable energy projects were being pursued and the government’s Low Carbon Community Challenge recently attracted over 500 expressions of interest. With respect to agro-food systems, numerous local organisations in cities such as Manchester are working at the interface of food security and environmental justice to develop alternative provisioning networks.

It seems clear that reversion to business as usual is not going to occur as quickly as proponents have promised. It may be the case, for better or worse, that much of Europe will be looking at low growth (or conceivably degrowth) for the foreseeable future.

In the case of Greece, we find a country that is locked into an extremely debilitating downward spiral. Burdened by massive public debt and precluded from pursuing currency devaluation, the government has been slashing wages and public expenditures. European negotiators have been compelling bondholders to take “haircuts” in exchange for assurances that remaining debt will be repaid. Unemployment is spiking dangerously upward, more than 25% of Greek businesses have been forced into bankruptcy since 2009, and Chinese investors are buying up the country’s ports and other infrastructure at fire-sale prices. Offsetting this forbidding situation, a growing numbers of people are reclaiming disused or neglected family farms and Internet-based barter networks are proliferating. Concomitantly, the country’s historically low level of female labour-force participation is evolving as Greek women increasingly become the primary source of household income.

It though must be acknowledged that these nascent activities in both the UK and Greece constitute only one dimension of a putative European economic transition. Survey data, as well as more visible signs of public rage, suggest that interethnic hostilities are escalating. In addition, recurrent political difficulties in Belgium and more urgent calls for Scottish succession suggest a redrawing of the European political map. The new governments that have come to power in Greece and Italy are wobbly at best and the youth unemployment problem—more than 50% in Spain and almost 5.5 million in the whole of the euro zone—poses enormous challenges. Across the continent’s southern tier, suicides are increasing and already low birth rates are falling further, both signs of serious societal distress. At the same time, Germany has consolidated its influence over several important European institutions and the country has taken advantage of a weakened euro to enhance its own international stature. These developments are creating palpable angst in neighbouring countries where living standards are slipping. The resounding political answer to this array of problems may very well be to kickstart customary kinds of economic growth.

A grown up Japanese economy

This trans-Atlantic comparison brings us finally to the intriguing Japanese case. For more than two decades, Japan has been portrayed as the “sick man” of the international economy, a country overwhelmed by massive public debt, “zombie” banks, “hollowed out” industries, and anaemic economic growth. According to this view, the Japanese economy never recovered from the collapse of the twin real estate and stock market bubbles of the late 1980s and early 1990s and a succession of ineffectual governments failed to wake the country from its torpor. Gross domestic product (GDP) peaked in Japan in 1995 at approximately US$5 trillion and for the past seventeen years has fluctuated between stagnation and decline. Because of lapsing demand, consumer prices have been in a vicious deflationary spiral. The country’s population is shrinking, its median age is increasing (the highest in the world at 44.8 years), and there is growing consternation about how to respond to tightening Chinese hegemony in Asia. Japan’s leading industrial firms are—especially in the wake of the triple disaster of earthquake, tsunami, and nuclear meltdown of 2011—reconfiguring their supply chains and moving production to lower wage nations.

But have the “lost decades” really been so bad? Is the customary interpretation correct, or is something else going on? A contrarian reading contends that Japan constitutes the leading edge of a transition toward postconsumerism.

Various indications suggest that the Japanese are taking their diminished status in stride and at the same time asking penetrating questions about topics typically beyond the pale in other countries. For instance, the influential economist Noriko Hama recently wrote that a modified understanding of so-called Japanisation “could be all about affluence, maturity, refinement, and leisureliness. It could be all about being grown up. A grown up economy that is the envy of the rest of the world. That could be Japan’s position in today’s scheme of things.”

These sensibilities appear to be asserting themselves especially among younger Japanese who display less enthusiasm for luxury goods than earlier generations. Moreover, automobiles of all makes and models have become especially prominent targets for disavowal among youth and the term “kuruma banare” (roughly translated as demotorisation) has been devised to capture this trend.

In time, we may find that the prevalent interpretation about Japan has been precisely backwards. In a postconsumerist world of scarce resources and impinging biophysical limits, the country’s high savings and employment rates, relatively equitable income distribution, and modest material consumption relative to GDP are likely to become envied—and perhaps emulated—characteristics.

Which institutions for a post-consumerist society?

Contemporary discussions of transitions tend to treat societal transformation in unambiguously positive and ineluctable terms. For example, the frequency referenced notion of “creative destruction” suggests that periodic reinvention ultimately contributes to human betterment. This idea is anchored in an Enlightenment understanding of continual improvement and the prevailing view is that change is tantamount to progress.

There is though no skirting the fact that sequential transitions from agrarianism to industrialism to consumerism were wrenching and often bewildering for people caught up in the throes of change. Laws were rewritten, new infrastructure was built, and familiar routines were torn asunder. One need only read the work of nineteenth century political economists to appreciate the havoc caused by the wholesale shift from a primarily agricultural system of production to an arrangement based on industrial manufacturing. The more recent process of deindustrialisation that began in the second half of the twentieth century was (and continues to be) similarly disruptive. The abandoned hulks that still stand in many former industrial districts, and the dispirited people that often occupy the neighbouring areas, are evidence of both the disarray that accompanies new modes of economic organisation and the inevitable incompleteness of any transition.

In the UK, a harsh critique of capitalism has gained considerable ground. This appraisal is not random or directionless, but rather is being shaped by an active politics of energy and climate change.

The nineteenth and twentieth centuries generated various initiatives to accommodate first the shift to industrialism and then the move to consumerism. For example, public health officials were strong proponents of the early automobile as a way to rid densely packed cities of the problems of horse-drawn transportation and to disperse urban populations (to reduce the spread of disease). They also championed land-use planning because is offered ways to relocate polluting industrial facilities away from residential districts. The construction of large public housing complexes in deindustrialising cities was another well-intentioned, but ultimately ill-conceived, policy idea that concentrated poverty in places without adequate employment opportunities. As discussed above, the mass infusion of credit into the consumer economy was only the most recent attempt to ameliorate one problem but turned out to be catastrophic in the end.

We now stand on the brink of a transition from consumerism to postconsumerism. It is befitting to acknowledge that such changes take place within the context of complex adaptive systems and we are truly novices in anticipating the complexity of such transformations. Experiences from the past provide some instructive guidance, but each transition poses its own challenges and expresses itself in different ways. This is thus a call for caution as we move forward. The weltanschauung of consumerism is deeply woven into contemporary culture—it provides the operating system for people to negotiate their way in the world—and it would be both unwise to expect uncomplicated adoption of an alternative.

Nonetheless, awareness that we are unlikely to be able to do everything should not be interpreted as a call to do nothing. Most importantly, we should not let ourselves fall into romanticised traps. As we seek to catch a glimmer of a dawning era of postconsumerism, it is critical to remain forward looking and cognisant that efforts to reinvent an idyllic past are bound to fail. Postconsumerism is unlikely to be effectively premised on lifestyles grounded in either urban or rural repeasantisation. Neither will it be based on the perpetuation of expensive middle-class perquisites instituted during the twentieth century. At the same time, there are not many truly new ideas in the world and we need to gather up the threads of the past and carry them forward. The logic of a postconsumerist future will need to entail clever combinations of urban agriculture, individual and communal provisioning, labour reskilling, infrastructural retrofitting, low-carbon technologies, carbon rationing, and hyperconnected modes of social interaction. We will need to be patient as agile minds struggle to assemble these elements into workable configurations.

In the meantime, it is incumbent on all of us to formulate imaginaries that can begin to reveal the outlines of a postconsumerist era. It is useful to recall that the onset of industrialisation was preceded by a long period dating back to the Middle Ages in which proto-industrialists sought to bring industrialism into view. Similarly, both far-sighted companies and marketing visionaries did much to anticipate (and to create) the current era. Similar engagement will be necessary to supplant the fraying consumerist age with a viable successor.

Beyond Growth/Degrowth
Beyond Growth/Degrowth

The focus of this edition is on the debate over economic growth - can economic growth continue? And if not, what alternatives might exist?

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