Abstract
Philip Kotler in his own inimitable way discusses the value destruction from the Coronavirus. He goes on to say that it is a time of reflection and to end this value destruction, where the age of consumerism and capitalism has been reigning supreme. He suggests a change in thinking. He suggests that it is time to rethink and rewire capitalism and transform it into a more equitable form based on democracy and social justice. This will create value for all.
The Sarasota Institute (TSI) (sarasotainstitute.global) will be publishing a larger version of this article.
The coronavirus COVID-19 is spreading relentlessly throughout the world creating a path of death and destruction. The world is in danger of falling into a Great Depression, with millions of unemployed workers across the globe. The impact will especially hit the poor—both in terms of health and economics; many cannot even afford to wash their hands because of the lack of water. What will happen to the millions that cannot practice social distancing? The slum dwellers, the prison population and the refugees huddled in tents?
I predict that this period of deprivation and anxiety will usher new consumer attitudes and behaviours that will change the nature of today’s Capitalism. Finally, citizens will re-examine what they consume, how much they consume and how all this is influenced by class issues and inequality. Citizens need to re-examine our capitalist assumptions and emerge from this terrible period with a new, more equitable form of capitalism.
Capitalism’s Dependence on Endless Consuming
Let us begin by taking a long view back to the emergence of the Industrial Revolution.
From the beginning, some onlookers had misgivings about the rise of consumerism. Many religious leaders saw the growing interest of citizens in material goods as competing with religious attention and spiritual values. The legacy of puritanical values kept certain population groups from acquiring too many goods and getting into too much debt. Some citizens were particularly critical of wealthy consumers who used goods to flaunt their wealth. The economist Thorsten Veblen was the first to write about ‘conspicuous consumption’ that he saw as a malady taking people away from more meditative life styles. In The Theory of the Leisure Class, Veblen exposed this sickness of status display. Had he lived long enough, he would have been aghast at the news that the former first lady of the Philippines, Imelda Marcos, owned 3,000 pairs of shoes that languished in storage since her exile from the Philippines.
The Growing Number of Anti-consumerists
Today, there are signs of a growing anti-consuming movement. We can distinguish at least five types of anti-consumerists.
First, a number of consumers are becoming life simplifiers, persons who want to eat less and buy less. They are reacting to the clutter of ‘stuff’. They want to downsize their possessions, many of which lie around unused and unnecessary. Some life simplifiers are less interested in owning goods such as cars or even homes; they prefer renting to buying and owning.
Second, another group consists of degrowth activists who feel that too much time and effort are going into consuming. Degrowth activists worry that consumption will outpace the carrying capacity of the earth. In 1970, the world population was 3.7 billion. By 2011, the world population grew to 7.0 billion. Today (2020), the world population stands at 7.7 billion. The UN expects the world population to grow to 9.8 billion by 2050. The nightmare would be that the earth cannot feed so many people. The amount of arable land is limited and the top soil is getting poorer. Several parts of our oceans are dead zones with no living marine life. Degrowth activists call for conservation and reducing our material needs. They worry about the people in the emerging poor nations aspiring to achieve the same standard of living found in advanced countries, something that is not possible. They see greedy producers doing their best to create ‘false and unsustainable needs’.
Third, another group consists of climate activists who worry about the harm and risk that high buying consumers are doing to our planet through generating so much carbon footprints that pollute our air and water. Climate activists carry a strong respect for nature and science and have genuine concerns about the future of our planet.
Fourth, there are sane food choosers who have turned into vegetarians and vegans. They are upset with how we kill animals to get our food. Everyone could eat well and nutritiously on a plant, vegetable and fruit diet. Livestock managers fatten up their cows and chickens to grow fast, and then kill them to sell animal parts in the pursuit of profits. Meanwhile, cows are a major emitter of methane that heats our earth and leads to higher temperatures, faster glacial melting and flooding of cities. To produce one kilogram of beef, requires between 15,000 and 20,000 litres of water as well as so much roughage to feed the animals.
Fifth, we hear about conservation activists who plead not to destroy existing goods but to reuse, repair, redecorate them or give them to needy people. Conservationists want companies to develop better and fewer goods that last longer. They criticise a company such as Zara that every 2 weeks produces a new set of women’s clothing styles that would only be available for 2 weeks. Conservationists oppose any acts of planned obsolescence. They are hostile to the luxury goods industry. Many are environmentalists and anti-globalists.
The anti-consumerism movement has produced a growing literature. One major critic is Naomi Klein with her books No Logo, This Changes Everything, and The Shock Doctrine. Also see the documentary film The Corporation by Mark Achbar and Jennifer Abbott.
How Businesses Sustain the Consumer Sentiment
Capitalism Faces the COVID-19 Crisis
Until now, most countries have used only one measure to assess the performance of their economy. That measure is the gross domestic product (GDP). GDP measures the total value of the goods and services produced in a given year by the country’s economy. What it does not measure is whether GDP growth has been accompanied by a growth in people’s well-being or happiness.
We badly need to add new measures of the impact of economic growth. Some countries are now preparing an annual measure of gross domestic happiness (GDH) or gross domestic well-being (GDW). We know that citizens in Scandinavian countries enjoy a substantially higher level of happiness and well-being than American citizens and run good economies. Is our addiction to consuming, consuming us?
Part of the problem of economic growth is that the fruits of gains in productivity are not shared equitably. This is obvious in a country with a growing number of billionaires and a great number of poor workers. Many CEOs are paid 300 times what their average worker earns, and some take home as much as 1100 times the average worker. The economic system is rigged. Corporations have succeeded in emasculating trade unions and leaving workers with no say in what they or their bosses should be paid.
When the COVID-19 crisis is over, capitalism will have moved to a new stage. Consumers will be more thoughtful about what they consume and how much they need to consume. Here are possible developments:
Some weaker companies and brands will vanish. Consumers will have to find reliable and satisfying replacement brands. The coronavirus makes us aware of how fragile our health is. We can catch colds easily in crowds. We must stop shaking hands when we meet and greet. We need to eat more healthy foods to have a greater resistance to germs and flus. We are shocked by the inadequacy of our health system and its great cost. We need to stay out of the hospital and play safe. The sudden loss of jobs will remain a trauma even after workers get jobs back. They will spend and save their money more carefully. Staying home led many consumers to become producers of their own food needs. More home cooking, more gardening to grow vegetables and herbs. Less eating out. We place more value on the needs of our family, friends and community. We will use social media to urge our families and friends to choose good and healthy foods and buy more sensible clothing and other goods. We will want brands to spell out their greater purpose and how each is serving the common good. People will become more conscious of the fragility of the planet, of air and water pollution, of water shortages and other problems.
More people will seek to achieve a better balance between work, family and leisure. Many will move from an addiction to materialism to sensing other paths to a good life. They will move to post-consumerism.
Capitalism remains the best engine for efficient economic growth. It also can be the best engine for equitable economic growth. It does not change to socialism when we raise taxes on the rich. We have given up on the false economic doctrine that the poor win when the rich get richer. Actually, the rich will get richer mainly by leaving more money in the hands of working class families to spend.
As the coronavirus crisis shows us, a robust public health system is in the best interest of all—rich and poor alike. It is time to rethink and rewire capitalism and transform it into a more equitable form based on democracy and social justice. Either we will learn to share more like Scandinavian countries or we will become a banana republic. We are all in this together.
