Higher costs of living don't translate to poorer countries. Not always. Life is waaaaaay more expensive in Chile than it is here in Venezuela, and I think I don't need to point out which one is poorer. Quite the opposite, I think that higher costs of living are a consequence of richness. If people earn more and the country becomes richer, there will be more demand for products, because people now have the possibility to buy things. The prices go up. It's just natural. If there's more demand to live in New York than in Caracas, because NY is a richer city, the costs will be higher.
I disagree completely on the notion that consumerism makes us poorer. I think, in a way, it helps with economic growth and it makes us develop exponentially because it pressures companies to innovate and produce new products to consume. On the other hand, yeah, it might be unhealthy on the individual level, if we take it too far. But just the idea of it being "unhealthy if we take it too far" is scary. Imagine a government that wants to end consumerism, the things they could do to the economy.
In conclusion, I will talk about a country I like very much and that is perfect to bring up on this topic: South Korea. At the end of the Korean War, South Korea was one of the poorest countries in Asia. It was comparable to Venezuela of current times. When the war ended in the mid-50s, it didn't take them long to lean towards a capitalist economy and consumerism became a part of their country quickly. In the 60s South Korea had a period of rapid economic growth known as the "Miracle of the Han River". Now they're one of the biggest economies in Asia. Consumerism didn't make them poorer at all.
Consumption can't make anyone rich, production does it, you can't consume what has not been produced, therefore, wealth comes before consumption and not later. Korea succeeded because it became productive, not because of its consumerism. In fact, capitalism is based on saving to invest. Saving is the creation of wealth.
Venezuela is poor, because it produces nothing, and learned to consume a lot. Western nations are kicking into the future a huge debt, nations like the United States and Japan are consuming now, at the expense of carrying a large debt to their grandchildren. The quality of life of a Western citizen compared to the 50s, before the consumption culture was implemented, is much lower.
What you say happens in Chile with respect to Venezuela, its true, it also happens in rich nations, in Manhattan everything is more expensive than in The Bronx, do you know why? more consumption. Buying a house in Caracas is more expensive than buying a twice as large in Tucupita. The greater the demand, the higher the price, which decreases the purchasing power. Its clear that people who work in Chile earn more money than those who work in Venezuela, it is also true that those who work in Caracas earn more money than those who work in the Tucupita, but that is because in those places the capital inflow is greater, that is, there is more investment, and investment comes from savings, and savings comes from work, then, material wealth is created by work, consumption disappears wealth.
Can consumption stimulate production? Yes, in fact, I said it in the post, only I did not explain it. Consumption can stimulate production, but to consume, before you have to have money, so you must work, the problem is that, at present, the level of consumption does not correspond to the level of real income, but consumption is encouraged by the credit. Take a look at the real estate crisis, the production of housing increased stimulated by consumption, but all that consumption was based on credit, spoiler! the thing did not end well, the people ended up homeless despite the fact that many trees were cut to build their houses. The consumer culture was responsible for the 2008 crisis.
The 2008 crisis wasn't a consumption problem. People weren't buying houses because they wanted to have 3 or 4 houses just for the sake of fun. In their minds, they were investing. The prices were going up like crazy, and people were buying to re-sell it. Actually, people weren't consuming, they were trying to invest, and you can see that as a way of saving... if you do it well xD
Like bitcoin. We don't really use it like we use "real" money at all. You can't buy almost anything with bitcoins, but we still invest in bitcoin or other cryptocurrencies. Why? well, maybe because we believe in cryptocurrencies and want them to take over the world, but also as an investment. We invest in bitcoin expecting its price to go up. Is that consumerism? I don't think so, no.
The problem in the 2008 crisis, rather than the consumer culture, was de credit card and debt culture. See, debt is a really important part of our society, but you need to be careful. Most people aren't. That, added to the fact that governments love to create economic cycles to fuck up everything, made a crisis. But I don't see how that is a consequence of consumerism.
Yeah, that's the whole point of supply and demand. What I think consumerism creates is higher demand, and with higher demand, there will be more room for innovation and production. With consumerism, we need to produce like crazy, not just because we need the money to buy things —we have credit cards after all—, but because we need products to equal the demand. And that, how I see it, makes a great room for innovation. Tesla, for example. Their cars are just for wealthy people, the prices are crazy. But Elon knows there is a wider market that would love to buy their cars. So he's looking for ways to produce the batteries himself because that would bring the prices down A LOT, and that would enable more people to consume. In a way, consumer society also makes things cheaper, because broader markets make for lower prices,don't you think?
I'm loving this conversation XD
The main issue with consumerism is not necessarily a material problem or something to do with the market economics, even though these could be impacted, but rather a cultural one.
Everything nowadays is all about technology, material wealth, and "growth" at the expense of everything else. The institutions in society including education, medicine, religion, law, or anything else related to a humane social order have become corrupted in order to facilitate this consumerist model. People go to school/university to get a job instead of for its original purpose of individual betterment; and this is even backwards because careerism and vocationalism has been confounded for this very idea.
Prices went up due to consumption, people were buying houses, whether or not for investment, most of those houses were not generating rent, it was easier to buy than to rent, therefore, people who had 3, 4 or a dozen houses, they were only leveraging on the basis of the increase in prices that they themselves were helping to raise. The production of these houses was the result of people buying with money that they did not have, that is, credit. We can not separate the culture of credit from the culture of consumption, one can not exist without the other. And all that process only served to make the houses more expensive to the rest of the people.
Bitcoin, in part, arose to change that, but look how speculation has tarnished all the ideals that drove Bitcoin and cryptocurrencies in the first place, people have invested fortunes in Ripple and centralized cryptocurrencies, not counting the hundreds of cryptocurrencies that they were created and they will never meet their goal. Vitalik himself has made his criticisms about it.
Like I said, you can not separate one thing from the other. Credit and consumption are part of the same culture. Do you know why during the Bush administration in 2001 the interest rate was lowered? it was to make private banks increase their credits and stimulate the nation's consumption, this started what would be the crisis of 2008.
No, we just can not wash our hands in that way, the government makes part of the deal and people do the other part, they are all part of the collective delirium to acquire more and more material goods. People went to the bank and asked for their loans, paid with their credit cards and bought more than their income could afford.
It is Keynesianism, the consumption stimulating the demand, and the demand stimulating the production, all that consumption comes from the credit and therefore generates inflation, the societies of Europe have been doing that for decades, ask a Spanish, French, Italian citizen the economic conditions they had in their countries before and now, their quality of life has descended, and will continue to do so.
For its part, Tesla is not even a profitable company, it owes more than it produces. Innovation does not arise from consumption, "industrial" innovation arises from investment, innovation occurs when they inject money into a project, and this can afford to pay both brilliant minds and the entire innovation process. But pay to finance these projects, there are only two ways to do it, the first is to save to invest, and the second is through the corrupt fiduciary credit that we currently have, and precisely supporting this type of system is what makes society more unequal , and that the quality of real life is going down.
On the other hand, there is also the moral and ideal issue. If a person does not move under any moral, spiritual, or ideal parameter, it is almost inevitable that he behaves under utilitarian parameters, and under the current culture model, utilitarianism is accompanied by material gain, using money as a means of measurement . The problem is that both the environment, values, ideals, and everything else is subordinated to capital. Are we humans made to subordinate ourselves to the material?
If you ask me, my answer will be no, I can give my life for an ideal, for a set of values, but I will not give my life to obtain greater material wealth.