State of the World 2004 Rethinking Consumption: From Wealth to Well-being Gary Gardner, Erik Assadourian, and Radhika Sarin

The Consumer Society A society in which acquisition and use of “goods and services is the principal cultural aspiration and the surest perceived route to personal happiness, social status, and national success.” — Paul Ekins

Three Points 1.Consumption has the character of a runaway train in much of the world 2.Current consumption patterns have a growing dark side for individuals, societies, and the planet 3.A different model of consumption is available—one that can deliver a higher quality of life

1. The State of Consumption Today

Private Consumption Expenditures, 2000 Sub-Saharan Africa 11%1% South Asia 22%2% East Asia & Pacific 33%21% Western Europe 6%29% U.S. & Canada 5%32% % of World Population % of World Consumption Expenditures Selected Region

Distribution of Global Consumer Class, Million Consumers Western Europe % East Asia & Pacific % South Asia 141 8% 1000 Industrial Countries % Developing Countries % World total = 1.7 billion consumers U.S. & Canada 271 % of World Total% of World Total: 16% 27% (other regions)

Global Consumer Class Selected nations, 2002 Millions of People United States China India Japan Germany Brazil Russian Federation 243 Million (84% of population) 240 M (19%) Consumer class 122 M (12%) 121 M (95%) 76 M (92%) 61 M (43%) 58 M (33%)

Car Growth in China (est.) ~ 0

What drives the appetite for consumption? Physiological Drives - Survival instinct: natural impulse to alleviate discomfort (hunger, cold, etc.) - Means of expressing social identity - Seeking comfort, style, and status Social and Psychological Needs - Increase in production efficiency = greater availability of goods Large Supply of Goods

What drives the appetite for consumption? Globalization - Reduction of tariffs and cheap labor = lower costs, more affordable products - Increased distribution and expanded markets Cheap Energy and Transportation Technological Innovations - Greater capacity to extract raw materials and resources at lower cost (i.e., fishing trawlers)

Business Practices to Stimulate Consumer Demand Billion Dollars (2001 dollars) Global and U.S. Advertising Expenditures, Advertising - Pervasive in commercial broadcasting, print media, Internet - Product placement in movies, TV programs

Business Practices to Stimulate Consumer Demand Credit Cards - Consumers can purchase goods beyond their means Government Policies - Economic subsidies affect consumption patterns - Ex.: subsidies for suburban homebuilding lead to demand for household goods, cars, roads, etc.

2. The Dark Side of Consumption

The Dark Side of Consumption Huge amount of consumer waste –Unlimited consumption at odds with patterns in natural world –In nature, no worthless waste, all matter reused or recycled Natural areas under stress - All the world’s ecosystems are shrinking to make way for human development

Global Living Planet Index Tool developed by World Wildlife Fund (WWF) International to measure health of natural systems (e.g., forests, oceans, freshwater systems, etc.)

Economic Activity and Ecosystem Health,

The Personal Toll 61% of Americans with credit cards carry a balance, averaging $12,000 DEBT Americans work the equivalent of 9 weeks more each year than Europeans TIME 65 % of American adults are overweight or obese HEALTH

Wealth vs. Well-being Once basic needs are met, affluence and the accumulation of goods do not necessarily correlate with a higher quality of life

Average Income and Happiness in the United States,

3. A New Model is Possible

Aspects of Well-being Basic Needs Food, shelter, secure livelihood Good Health Physical and mental health and a robust natural environment Healthy Social Relations A supportive social network Security Personal safety and security of one’s possessions Freedom The capacity to achieve one’s development potential

Well-being Index Tool developed by Robert Prescott-Allen to measure societal health Uses 87 different indicators to measure human and ecological well-being –e.g., Life expectancy, school enrollment rate, extent of deforestation, level of carbon dioxide emission, etc. Values for indicators are standardized and summed into a single score

Maximum Score Human WBEnviro WBTotal WB (Rank out of 180 countries) Sweden (1 st ) Benin (47 th ) Saudi Arabia (176 th ) Well-being (WB) Ranking (selected countries)

Maximum Score Human WBEnviro WBTotal WB (Rank out of 180 countries) Sweden (1 st ) Netherlands (24 th ) United States (27 th ) Rethinking Progress Similar Human WB, but different Enviro WB: How a nation meets its development goals as important as whether it meets them

Toward an Infrastructure of Well-being Physical Infrastructure e.g., urban planning, mass transit Political Infrastructure e.g., subsidies, taxes, laws on working hours Cultural Infrastructure e.g., harnessing advertising, improving education

Getting to the Good Life New emphasis for economy:  to create societies with a higher quality of life  to live in harmony with natural environment  to facilitate healthy choices  to tend to the basic needs of all Current economic goal of unlimited consumption is unsustainable

About the Authors Erik Assadourian is a Staff Researcher at the Worldwatch Institute Gary Gardner is the Institute’s Director of Research Radhika Sarin was formerly a Staff Researcher at the Institute

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