American consumerism: an historic perspective

Here’s a statement about the US consumer:

“… certain dominant trends emerge: the increase in national income and in the purchasing power of a large section of the population; an increase in the availability of consumer credit; a sharp increment both in volume and variety of consumer’s goods available … and also acute choices between expenditures for familiar activities and for the new kinds of activities made possible by invention and technology; rising standards and adequacy and comfort in living … changes in availability of goods related to developments in transportation, communication and merchandising, and also substantial differences in the pressure to consume many types of commodities owing to regional differences; a multiplication in the influences playing upon the consumer and shaping his habits, with an apparently growing sense of conflict in our urbanized, secularized culture; and a resulting seemingly greater susceptibility to change as indicated by swifter fashion changes and the reported rise in consumer fickleness.”

This is actually from 1933, quoted in an interesting blog article from the New York Fed, which produces all manner of short, readable and interesting articles under the title Liberty Street Economics.

The same article quotes sources from the 1960s that argued that the American housewife’s thriftiness (high saving rate) allowed a high level of consumption because it was soundly based. In the last couple of decades it was mass access to credit that allowed high consumption (with very low savings rates). Real incomes for many people in the US have stagnated for decades so the only way to increase your standard of living was to borrow, but that has ended badly.

I don’t think Americans are uniquely consumerist and the fact that there have been periods of quite varying thriftiness then binge spending suggest that it is less a cultural than an economic phenomenon. Equally there is no reason to think that Chinese households will be very high savers for ever.

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