Introduction
?The world has enough for everybody?s need but not enough for everybody?s greed?
-Mahatma Gandhi (1869-1948)
This essay draws an insight from the paper by Carolan (2004):? Ecological Modernization Theory: What about Consumption?? which sparks the call to address the other side of equation in creating sustainable economy i.e. consumption.
This essay will discuss about the relationship between restrained consumption and creation of sustainable ecological economy and the ensuing impacts on population general well- being and environment. Firstly, it will outline the perils of capitalistic style of economics and the need for more comprehensive framework in the light of today?s environmental and social degradation. Secondly, it attempts to explore the underlying assumptions & roots behind the consumptive culture and the need of restrained consumption for environmental and social sustainability. Thirdly, the paper will look at Denmark and Costa Rica to illustrate an alternative life style of consumerism. Lastly, the paper will address the potential concerns and challenges in regard to restrained consumption. For the purpose of this essay, capitalism and Neoclassical Economy will be used interchangeably as they inherently share the characteristics of consumerism/materialism.
Ecological Economy: A Quest Toward comprehensive Framework
?The social responsibility of business is to increase its profit?, said Milton Friedman a Nobel prize-winning economist decades ago (Gallagher, 2005). In today?s business world, the dictum of ?maximizing the shareholders value? is still echoing in most corporate mission statements and business schools (Gallagher, 2005).?For many years, Neoclassical Econoics has dominated the world in which a good economy is characterized by a high stable growth, profit maximization and efficient allocation of resources (Costanza 1989, Adolphson 2004). ?Such paradigm is inherently flawed as its myopic nature to pursue infinite physical economic growth at the cost of environment degradation and social problems and any in disequilibrium will be corrected by ?invisible hand?(Hart & Milstein, 2003, Nelson, 2004, Korhonen & Jouni, 2006) . The consequence of such approach is that it treats the discipline as the end in itself rather than the means to achieve social and environmental sustainability.
Covey (2004) in describing his ?5 Ages of Civilization?s Voice?[1] also implicitly mentioned that although we are heading toward the Age of Wisdom, our way of thinking still lies somewhere between the Age of Industrial and Information where humans are still treated as a means rather than the ends i.e. in this case people are merely viewed as a market base and resources for profit making purpose.
Thus there is a need of new paradigm to provide the missing links in Neoclassical Economics, encompassing economy, social and environment and recognize the inter-dependency among those. Ecological Economics can be described as a discipline that addresses the relationship between ecosystems and economic systems by increasing economics awareness of ecological impacts and dependencies; the ecology more sensitive to economic forces, incentives and constraints with a common yet diverse set of conceptual analytical tools (Contanza, 1989).
However, due to its broad scope of Ecological Economics and its somewhat ?vague? role in commercial world, one may point out that due to the lack of clear set measurements, going green is simply a tactical move for marketing purpose and a cost of doing business (Saha & Darnton, 2005). Despite its lack of holistic measurements, it at least provides a blueprint for sustainable economy.
The Roots of Consumerism in Capitalistic Dominated Economy
Due to the nature of capitalism, it is widely understood that capitalism encourages the culture of consumerism. Why then there is a popular belief ?more is better[2]?, particularly in western society? The hypothetical answers are two folds: firstly, an advance in technology allows mass production at low cost which in turn promotes consumerism (Ozawa, 2003) and secondly, it is a widely accepted perception that the level of consumption to some extent defines one?s social status.
Contemplating the advance of technology due to industrial revolution (late 18th to early 19th century), it is arguably that post WWII (1945) followed by the emergence of baby boomer generation and enactment of Marshall Plan to re-build the Europe economies in exchange of capitalism ideology marks the beginning of consumerism as the ability to produce at much lower costs improved dramatically, coupled by a strong demand for US goods from devastated economies post WWII and domestic. Hence, there was a chain reaction: the production of goods increased, leading to higher level of employment and in so increasing level of income and eventually lead to stronger demand. It is also reasonable to presume that after all the sacrifice and hardship during the war period, citizens and ex-servicemen alike demanded a better a living standard on their government through better living standard, especially for ex-soldiers returning to private life.
Thus, after having consumption been restrained to preserve materials for war production purpose and barely survived on basic necessities, a wide range of goods for the first time became available and advertising industry seized the opportunity to target the growing market of middle class. Hence, consumption of luxuries/non-necessary goods and services started to define hierarchal social status of individuals, the higher the level of consumption of an individual the better he/she would be esteemed in society. This notion is consistent with Veblen (1994) who points out that economic life is not driven by concept of utility, but by desire to advance in social hierarchy since pre-historic times and today?s society is simply the variation of early tribal life. That is, the notion of consumption has transcended beyond its original purpose e.g. a second hand Honda car can drive from point A to point B, what is the point to drive BMW that consumes more fuel, much more expensive to purchase and higher maintenance?
In similar vein, Cushman (1990) captivatingly notes that post WWII, particularly individuals in West; there was a need to fill the ?empty self? i.e. loss of family members, significant absence of community and tradition. It was ?a self? that continuously sought the experience of being compensated to combat the growing sense of alienation and fragmentation of its era by consuming goods, experiences, romantic partners etc (Cushman, 1990). It was later augmented by capitalistic model of economy that required a strong demand on consumer goods in addition to deployment of selling products via identification of ?imaginary state of being? to dispel customers? feeling of inadequacy (Cushman, 1990).
Given the America dominant status as the world economy power, the consumerism lifestyle has spread over the world through the increasing trend of globalization without much thought on the impacts on environment and society in the long term.
Impact of Consumerism on Environment and Society
As consumerism demands a better technology with greater efficiency and less material usage, would not it solve environmental problems? Mathematically, the increased efficiency and conservation is not enough in itself in the long run as long as the level of consumption continues to increase e.g. American Council for an Energy-Efficient Economy cited that energy usage was reduced by 17% between 1990 and 2000 however, the total emissions increased during the same period by 14% due to 39% increase in economy activity (Carolan, 2004). It is even suggested that we need to revert to as far as the Stone to Bronze Age in order to stop the ?bleed? of raw materials consumption and environmental waste (2009, UN Systems-Wide Earth Watch).
Even the daily non-technology consumptions that we often overlook such as pork, beef, chicken produce enormous greenhouse gas e.g. to produce 8 ounces of beef requires 25000 liters of water, farm animals reportedly consume 95% of world soybean crops and 16% of the world methane is produced by belching flatulent livestock (2004, National Geographic) not to mention the energy required to transport and resultant of externality costs.
Although the consumerism has been credited for lifting the standard of living (at least materially), promoting technology innovation, job creation and wider range of choices, consumerism has caused perils to society as well. Today?s society needs to work longer hours, incurs higher debt to sustain its consumptive life style and in general less happy and healthy according to several studies of life satisfaction survey in more than 65 countries (Mayell, 2004, National Geographic). Still from the same survey, it was reported that the level of self-reported happiness grows at much slower rate in proportion to increase in additional income (Mayell, 2004, National Geographic). At global level, capitalism driven consumption has also created social injustice around the world. According to a report by UN for World Summit on Sustainable Development 2002, developed countries consume 10 times as much fossil fuel as developing nations (2002, UN Johannesburg Summit Report).
From psychological perspective, it was found that materialistic individuals invest least in relationship and are more likely to compete against each other rather than cooperate (Kasser, 2002, pp.70-72). Thus, it is clear that there is a need of new paradigm on how we view our consumption pattern.
Lessons from the Happiest Place on Earth
Do we need to deprive ourselves of conveniences for the sake of environment? Is it wrong to indulge ourselves after all the hard work? Would not the economy go backward should we reduce our consumption e.g. loss of employment? ?Those commonly asked questions are mainly concerned with defending human?s status quo on this planet. Presuming the pursuit of happiness is the universal goal of mankind, perhaps the ?right? question is: How do we achieve the state of happiness and simultaneously lives an ethical responsible live as a citizen of this planet earth?
Not surprisingly, Denmark and Costa Rica being two of contrasting countries, in terms of technology and economic advancement, share similar traits of what make a happy and green country on earth[3]. Unlike most economically advanced western countries, Denmark has one of the highest income tax rate countries in the world ranging between 50-70% of their income (Weir & Johnson, 2006, ABC News) thus circuitously dispelling free-market neo-liberal type of economy which usually driven by low tax rate. So what is the single denominator do they share in common?
Above 90% of Danes belong to at least one social club, they choose profession based on their calling rather than on income, image or status due to its high income tax rate, the level of trust is high among them and interestingly although they can afford cars, they choose to bike instead that show no economical status and environmentally friendly (Weir & Johnson, 2006, ABC News). Similarly, Costa Rica, being the happiest and one of greenest countries on earth in 2009 according to a British NGO, places a strong emphasis on ?pure life? and connection to environment (2009, ABC News). In short, both nations place a strong emphasis on social connectedness not ?stuff?. Consistent with the finding above, a study by Myers and Diener (1996) shows material wealth is a poor indication of happiness[4], instead, close personal relationship through marriage; friendship and social support group such as religious affiliations positively contribute to a person?s well-being.
Certainly such studies and findings are prone to criticisms. For instance, in poorest countries material wealth certainly would contribute to general well-being of the citizens, similarly in oppressed countries, political freedom might place a higher value on happiness rather than social life. Moreover, a necessity in developed countries for daily activities such as access to technology and internet access might be a luxury in developing countries. Albeit the inherent subjectivity, these studies at least illustrate that social bonding not consumerism that contribute to general well-being. This further may enforce the susceptibility for ecological economy.
The Challenges
Despite global urgency to achieve social and environmental sustainability, it is na?ve to assume everyone would be on the same page when it comes to consumption. It is especially true for developing countries like China, starting to enjoy rapid economic growth and westernized life style of high consumption. Likewise in developed countries, are the citizens willing to reduce consumption they have so much enjoyed for the sake of planet and future generation?
The challenges go beyond economic issue; material consumption/economic advancement blindly pursued have been the root of conflicts all over the world either through military intervention or multinational companies. President Woodrow Wilson recognized this during WWI when he said:?Is there any man, is there any woman, let me say any child here that does not know that the seed of war in modern world is industrial and commercial rivalry??(Smith, 2000, p.58). It is so pervasive that even a super power government would turn blind eyes when its energy supply is under threat. This is illustrated in 1995 incident where Shell and Nigeria were under scrutiny after the execution of Ken Saro-Wiwa of Ogoni, US which depended 40% of its oil supply from Nigeria, was tacitly avoiding the possibility of oil embargo (Schultz et al, 2002, pp.77-78).
Thus it is evident that restrained consumption and ecological economy requires not only a ?wholeness? actions incorporating various stakeholders i.e. businesses, communities, scientists, governments but also a complete different mindset (arguably the most important) i.e. consumption as the means not the ends. It is an arduous task, but history has shown us that noble endeavors carried in zealous spirit will ultimately triumph when the time is ripe. For instance, less than 80 years ago, racism was considered a norm, but today it is considered illegal and unethical in most parts of the world thank to courageous individuals like Martin Luther King Jr.
Educating the public on how their consumption pattern adversely affects the environment and the relationships with ecosystem and fellow human beings is perhaps the first and the foremost steps. Al Gore?s ?An Inconvenient Truth? is just one of such exemplars. The second step is to address public fears associated with reduced consumption and more efficient production. Unfortunately, some fears appear to be unfounded. Contrary to popular belief, a reduced consumption and more efficient production would not necessarily lead to job losses. In fact, according to a study published by ILO suggests that there would still be a small net benefit in employment rather than a loss through a shift within economic sectors e.g. jobs in public transport and its equipment manufacturing will compensate a decline in private car industry (2007, The Magazine of ILO). Additionally, externality costs would be much lower e.g. less costs to clean up pollution, less costs to accommodate environment refugees etc, not to mention the free time afforded for not having to work harder and longer hours to maintain environmentally and socially unsustainable life style.
Having kept that in mind, further researches could focus on the impacts of voluntary reduced consumptions in high consumptive societies on environment and their general well-being. Unlike scientists who mainly deal with material objects and have a lab to experiment in. Economists and social scientists deal with free-willed people who have their own agenda and interests. Yes, it can be managed to some extent mechanically, for instance, by internalizing the cost of waste disposal into production costs as in Germany (2009, United Nations System-Wide Earth Watch), ratification of Kyoto Protocol, tax on high polluting industry and so on. However, unless all stakeholders are on the same page on the view of consumption, we will still dissipate our energy, time and resources unnecessarily to resolve around conflict of interests for a common issue that is so significant and pertinent for all of us and the future generations to come.
Conclusion
Capitalistic model of economy, although credited for raising the standard of living materially, has come at the expense of environment and social degradation.? This is owing to the inherent flawed assumptions that fail to take into account externalities and rely on high consumption to fuel economic growth. Although the scope of Ecological Economics is very broad, it at least provides a blueprint towards sustainability. Consumerism arguably took its root in Western society, partially due to industrial revolution, lead by US as a sole super power after WWII and further spread to the rest of the world via globalization movement.
Consumerism not only leads to environmental degradation but also greed, social injustice, unhappiness and social disconnection. Drawing lessons from Denmark and Costa-Rica, assuming happiness is the universal pursuit of humankind, there is a better and ?greener? life style to achieve happiness through strong social bond and fulfilling relationship without much regard to consumerism. Further research could focus on the impact on voluntary reduced consumption in high consumptive societies on environment and general well-being.
Achieving Ecological Economy indeed faces multidimensional challenges beyond mere economic issue. Educating the public and addressing their concerns are perhaps the foremost important steps. To some extent the progress can be achieved through external mechanisms e.g. tax, Kyoto Protocol, internalization of externality costs etc. However, if we are to achieve significant progress in sustainability, all stakeholders need to be on the same page on the view of consumption.
PS: This essay was part of my Post Grad course, Managing for Sustainability
[1] In ascending order: the Age of Hunter/Gatherer, Agricultural, Industrial, Information/Knowledge Worker and Wisdom
[2] ?The more the better includes both quantity and quality measures e.g. more varieties of food and luxurious cars respectively
[3] According to researches on happiness cited on ABC News:?Costa Rica the ?happiest, greenest? nation?, July 2009 and? ?Denmark: The Happiest Place on Earth? , July 2006
[4] Excepting poorest countries where basic needs are net met yet such as food and eduction, thus there is a strong link between income and general well-being
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Source: http://imo.thejakartapost.com/hendra/2011/09/24/what-is-the-relationship-between-restrained-consumption-and-sustainable-ecological-economy/
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