What is the effect of consumerism on the American economy? The father of modern economics and capitalism, Adam Smith, maintained that ambition and acquisitiveness, two drivers of a market economy, were merely illusions. He believed it is these illusions that compel a society to work for what they believe will make them happy which, in turn, leads to a consumer-driven economy. Indeed, consumerism broadens a society’s economy through a wider selection of goods and services, but does it also increase the power and controls of a society’s government through consumer activism and regulation?
Supporters of consumerism point out that indebtedness has long been a part of America’s history. Until the 20th century, Americans believed indebtedness was a sign of wealth and power – something only the most respected members of society enjoyed. Credit cards opened doors for the middle and lower classes and allows them to purchase items once attainable only by the wealthier members of society. Advocates of consumerism believe making money via credit more available to consumers only benefits America because it encourages people to purchase more expensive goods and services. This, in turn, will drive the demand for more which leads to more jobs and more spending. Proponents further insist that society’s development is greater because of consumerism and any governmental intervention to foster the growth of consumerism is necessary to prevent the collapse of the American economy.
Those who support consumerism make the case that private companies simply cannot and should not regulate themselves. Lenient, if not almost non-existent, regulation of America’s corporate and financial institutions nearly caused the collapse of the American economy in 2008, they insist, and the government must ensure the safety of the economy by reforming the behavior of corporate America. The only way to improve the practices of businesses, large and small, is through regulation and reform. Supporters believe the current reform proposals will restrain the carelessness of business and prevent future crises. Congressional regulation, they insist, also lifts the overall living standards for all members of society.
Does a society benefit or suffer as a result of increased consumerism? It absolutely benefits, say supporters. Debt drives consumer spending, which in turn helps the economy grow. When people spend more money, businesses earn higher profits and are able to hire more workers. Consumerism promotes the fueling of economic progress through the development of manufacturing and the rise of living standards for all Americans and not just the wealthy.
Opponents argue that societal development suffers as consumerism and the ensuing governmental regulations increase. They point to the fact that working class wages are stagnating and prices are increasing. Avoiding...