Deprived … of feeling affluent

Posted by Rob Walker on November 4, 2008
Posted Under: America

From Robert J. Samuelson’s Newsweek cover story:

The bad news is that recovery, though boosting employment, may prove unsatisfying. Our new economic era may lapse into a state of “affluent deprivation.” That’s an unfamiliar term. It doesn’t mean poverty. The United States will remain a wealthy society. Rather, “affluent deprivation” signifies a state of mind. People feel poorer, because their sluggish income gains get siphoned off into higher taxes, energy costs and health spending. Though these all involve benefits, they don’t pay everyday bills or cover people’s routine pleasures. There’s an approaching collision between private and public wants—government spending for everything from retirement benefits to defense to the repair of roads and bridges.

To some observers, we are so materialistic that we can easily make sacrifices. Do we really need fancier grills or more flat-screen TVs? Of course, there’s waste and personal extravagance. But what this argument ignores is psychology. “Luxuries” quickly become “necessities”—cell phones being a recent example. “Getting ahead” feeds people’s optimism, and an upbeat society shows more “tolerance of diversity, social mobility [and a greater] commitment to fairness,” as Harvard economist Benjamin Friedman argued in a recent book. Economic growth has anchored our national self-esteem; slower growth suggests a grumpier and more contentious America.

I wonder if this is true — if, in effect, material culture has become so deeply ingrained in our ability to feel optimism and self-esteem.

Further diversion may be found at MKTG Tumblr, and the Consumed Facebook page.

Reader Comments

It is true that we can stop the uneccesary luxaries that we take for granted but we shouldn’t stop all that we have made just because of fear. I believe we should go back to the olden days of making quality first and not the quickest easiest way to make a product sell it and have it be expendible in a year. A product range that can last 3-5 years with repairs and added upgrades should be our focus as well as decreased energy spending

Written By ErikJ on November 5th, 2008 @ 3:40 am

IMO it’s an old-school argument. Generations Y and X place more value on social capital in establishing their self-esteem, as in how many Facebook friends they’ve got, how their love lives are going, etc. Also, part of the problem with the middle class pursuing luxury items was that they were simultaneously spending way too much money on Starbucks, massages, yoga, and so on — all consumer rituals associated with social contact in one sense or another.

The Internet provides more opportunity for inexpensive socializing (meetups, parties, conversation). So the economic downturn becomes a question of people paying attention to all those billions spent on little things in the interest of maintaining the pursuit of cool gadgets. The cool electronics are also increasingly affordable (Wal-Mart’s basically giving away flatscreen TVs, these days), so I don’t know how deprived people will really feel, unless they’re just a-holes.

But that’s all assuming it’s just a recession, not Great Depression 2.0.

Written By Jonathan on November 5th, 2008 @ 4:33 am

ErikJ: Reasonable points, thanks.
Jonathan: At first I thought by old-school you meant this is essentially an old argument, one that’s been around, which is true. But now I think if I’m reading you right you might it’s only of concern to older people, because young people aren’t materialistic, because of the Net. I’m not so sure that lines up with any data I’ve ever seen. Certainly older people spend at higher levels, because they tend to earn more money. But I’m not aware of anything suggesting a generational shift away from material culture, nor am I sure how it would square with what I’ve read about credit card (not student loan) debt among younger people, or levels of brand awareness, or early adoption of gadgets and trends and so on. But, I don’t know, maybe you’re right. That’s a new one on me, is all I’m saying.

Written By Rob Walker on November 5th, 2008 @ 3:10 pm

I don’t think there will be a generational shift away from material culture, just a different approach to shopping. I predict consumers will adapt to slower economic growth by learning to moderate their consumerism in small ways, and I don’t think this will affect anybody’s sense of optimism. So the argument seems old-school to me both in the sense that it’s been around, and in the sense that the Internet and increasingly affordable electronics have changed the materialism-optimism equation for the digital natives.

Written By Jonathan on November 5th, 2008 @ 7:03 pm

That’s a really interesting argument, Jonathan. I’ll have to think about it, but I get where you’re coming from. Thanks again…

Written By Rob Walker on November 5th, 2008 @ 8:33 pm

Yes, the United States is a very materialistic country but by getting rid of all the luxuries that has made the United States the most powerful country in the world would be an absurd thing to do. Since the economic lapse, Americans do need to start becoming smarter shoppers and realize that all the materialistic things are not necesities.

Written By Brian Angelone on December 17th, 2008 @ 5:05 pm

I don’t think the United States is not that materialistic. plus, this current economic downturn would be encouraging consumers to not spend their money, and Americans need to approach different ways and thoughts about shopping.

Written By Young Choi on December 17th, 2008 @ 5:23 pm
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