Author: Paul Wallbank

Anand Giridharadas in his NY Times article on A Yearning for the Soul in Two Nations describes how he believes some in India and China are seeking alternatives to the affluence models of the developed world. He says;

“In this view, there is too much mimicry of Western models, regardless of their fit. There is too much attention to money, and not enough on culture and values. Journalists, Mr. Ji said, don’t ask him what he thinks or how China might be changed; they concentrate on his Forbes rich-list ranking.”

But is this really a Western value, or the result of a half-Century of consumerism?

Up until the Second World War, most Western societies operated just like the “traditional” societies of Asia where extended family and the community looked after their old and sick with it being quite normal for four generations to be living in one small house.

Post World War II, the advent of the nuclear family and increased material wealth allowed us to dispatch Nana to the nursing home, where we’d expect the state to pay for her dotage. This allowed debt laden working age families to get on with working two jobs to bring up two kids in a five bedroom house on the outskirts of town where we could retreat away from the surrounding community into the soft comforts of mass entertainment.

Has that model of the consumer society reached it’s limits?

In the West, the last two decades have been focused on ever elaborate mechanisms to put consumers, government and societies into greater debt in order to sell more plasma televisions, bigger cars and empty bedrooms in oversized McMansions. In turn government borrowed more to sustain the illusion that this material wealth could be enjoyed throughout retirement.

The Global Financial Crisis was the undoing of this as the mechanism to continually fund debt and bankers profits stretched to its limits and finally broke. Today, we have the bankers being bailed out by governments which in turn have to be bailed out by supra-national organisations like the IMF or European Union.

While Anand’s right in pointing out that some Indians and Chinese are questioning the Western style rush for consumer driven growth, it would be wrong to assume that nobody in Europe, North America or Australasia questioned this as well.

In the west, these voices were drowned by the obvious attractions of having a ice cream maker and espresso machine in every kitchen but they were there nevertheless. Today they are being heard.

We in the developed nations have reached the maximum point of the consumer society – we have enough plasma TVs in our households and many of us have reached the limits of how fare we can commute in a day. We were able to sustain this for a while after we passed the point we could afford it as cheap credit became easier to obtain but even that is now exhausted.

So we’re looking at a period where consumer spending is not going to drive the world’s developed economies the way it has for the past few decades.

In some respects this will mean a nominal reduction in our standard of living as we won’t be able to buy that third car, fifth iPad or go on overseas holiday every year and it will mean some industries based on the extremes of consumer spending will shrink.

But overall it may not be a bad thing as it will force us into spending more time with our local communities and families with our incomes and debts being tempered to more sustainable levels. We’ll invest in sustainable and important matters like our health and environment rather than speculate on overleveraged assets.

This will be great challenge to businesses and industries built around servicing every increasing consumer demands and many won’t cope with the change. Are we, and our governments, prepared for this change?

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