In Summary

  • Analysis for The Conversation by Anthony James, Swinburne University of Technology 

The average German household contains 10,000 items. That’s according to a study cited by Frank Trentmann in his sweeping history of consumption, Empire of Things We're "bursting" with the amount of stuff that we have - while all of this consumption is and dangerously depleting the planet’s resources and systems. 

So after Christmas, and the Boxing Day sales, it seems like a good time to ask: what is the purpose of all this consumption?

The consumption cake

If consumption is about facilitating quality of life, then quantities of money, materials, energy and so on are merely ingredients. They’re not the end product.

If I was baking a cake, would it make sense to use as many ingredients as possible? Of course not.

Yet “more is better” remains the narrative of modern society, and therefore of the economic system we use to make it happen. This makes sense while there is a sustainable correlation between quality of life and material resources consumed.

But this correlation is weakening. There is growing evidence that we are on a trajectory of diminishing returns on quality of life. A growing spate of titles such as Affluenza, Stuffocation and How Much is Enough? speak to the phenomenon.

Yet in the midst of unprecedented wealth, and unprecedented threats (from climate change and mass extinction, to inequality and social fragmentation), is the opportunity to move on to better things – to move beyond the consumer machine, and gear the future economy towards what we are really after in life.

So what are we baking? And what are the optimal amounts of ingredients we need?

Optimising consumption to maximise quality of life

What is the optimal level of income, for example, and of Gross Domestic Product (GDP) as a country? What about energy use per person? We scarcely even ask these questions.

Take energy, for example. Around a decade ago, the UN noted that beyond a certain point, increasing energy use does not lead to increases in the Human Development Index (HDI).

Indeed, Canadian scientist Vaclav Smil had shown that the highest HDI rates were found to occur with a minimum annual energy use of 110 gigajoules (GJ) per person. This was roughly Italy’s rate at the time, the lowest among industrialised nations and around a third of the US figure. He noted no additional gains past that point, with diminishing returns past the threshold of only 40-70GJ per person.

Tim Jackson reported a similar pattern in his 2009 book Prosperity Without Growth. In a study from the year 2000, life satisfaction measures were found to barely respond to increases in GDP per person beyond around $15,000 (in international $), “even to quite large increases in GDP”. He noted that countries such as Denmark, Sweden, New Zealand and Ireland recorded as high or higher levels of life satisfaction than the United States, for example, with significantly lower income levels.

By way of comparison, at the time of that study, GDP person in the United States was $26,980. Denmark’s was $21,230, Sweden’s $18,540, New Zealand’s $16,360, and Ireland’s $15,680. Australia’s was $18,940, also with a comparable life satisfaction measure to the United States.

It has long been recognised that GDP is not only a poor proxy for measuring a society’s wellbeing, but that from its inception we have been warned us against doing this. As Ross Gittins put it recently:

It defines prosperity almost wholly in material terms. Any preference for greater leisure over greater production is assumed to be retrograde. Weekends are there to be commercialised. Family ties are great, so long as they don’t stop you being shifted to Perth.

On a related note, in the context of self-reported perceptions of subjective wellbeing in Australia, Melissa Weinberg of the Australian Centre on Quality of Life at Deakin University reported in a presentation earlier this year that once incomes rise above A$100,000 per year, there is little discernible gain in subjective wellbeing.

Boxing Day sales in Sydney 2014. Shoppers were expected to spend a record A$2.5 billion on Boxing Day 2016. AAP/Sam Mooy

How can we move beyond the consumer machine?

There is no inherent or fixed notion of optimal wealth or consumption. It is for us to create ways of deciding together what is most important to us at any given time and place. Indeed, there are growing efforts around the world to do just that, as part of developing better measures of quality of life.

These include national projects in countries such as Canada, France, the UK and of course Bhutan with its Gross National Happiness. There are also broader projects such as those undertaken by the OECD, the New Economics Foundation and the Genuine Progress Indicator.

Unfortunately, Australia recently did away with its official effort, although the proposed Australian National Development Index (or ANDI) seeks to further the agenda locally, ultimately aiming to become our primary set of national accounts.

Why is this important? Well, given that we’re finding our optimal levels of resource use and income appear far lower than commonly assumed, it is clear that a “good life” does not depend on the continual expansion of these things. Reducing the negative consequences associated with excessive consumption comes with the genuine prospect of improving our lives.

However, in scaling back consumption growth, the good life may also serve to reduce GDP; that is, it may be an inherently recessionary pressure. And that scares us.

But what if we find our broader aspirations for a sustainable quality of life are tracking well, while GDP slows or even contracts? The new measures we decide upon can help anchor our confidence in the necessary changes to how we deal with money, work and consumption. After all, there would be little point in preserving GDP growth at the expense of our actual goal.

What does this mean for the holiday season?

It doesn’t necessarily mean you should buy nothing. This isn’t about avoiding or demonising consumption. It’s about asking what would happen if we looked to optimise it and to maximise what is most important in life.

We could focus more on giving the gifts of quality time, good health, less debt, less stress and a flourishing planet to each other. Perhaps even create the space to give more to those less fortunate.

And what if, in 2017, we resolved to explore and hone in on our optimal levels of income, work hours, energy use, GDP and so on? Perhaps even support the development of those new measures mentioned here.

Above all, it is clear that we no longer need to feel compelled by outdated narratives of excessive consumption being good for us, or for the economy generally. There is more to being human, and now more than ever it is time to organise ourselves to that end. After all, the cake that we are baking is a better life for each other. That would be something worth celebrating.

The ConversationWritten by Anthony James, Lecturer, Swinburne University of Technology. This article was originally published on The Conversation. Read the original article.