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The consumer economy is that portion of the overall economic system that is dependent on individual or household consumer expenditures. Goods that embody the consumer economy would include food, clothing, housing, furniture, appliances, automobiles, etc.; while services that comprise the consumer economy would include restaurants, private hospital care, personal banking, commercial airlines, etc. Thus, the consumer economy is distinct from (yet related to) the industrial economy which emphasizes trade between corporations (investment banking, industrial machinery, chemicals, etc.), and the public sector which involves the delivery of governmental services (bridges and roads, sewer, public education, etc.).
When the economy of a nation is described as a consumer economy (sometimes consumer society), this implies that the nation's prosperity is significantly based in sustainable consumer demand for goods and services. Economists have suggested that, in a consumer economy, the concept of "enough, or more than enough" is undermined; the demand for goods and services, and the availability of income to purchase them, is assumed to be constant.[1] The result is a close relationship between employment and income from employment on the one hand, and production of goods and services on the other.[2] It has been said that "(a) consumerist society is one in which the possession of an increasing number and variety of goods and services is the highest cultural aspiration and the surest perceived route to personal happiness, social status, and national success."[3]
History
The consumer economy began to expand exponentially in the early- to mid-20th century. Around the early 20th century, the growth of consumer rights and activist movements also commenced, with the creation of organizations such as the National Consumers League.[4] It has been said that two-thirds of jobs in the United States are now tied either directly or indirectly to the consumer economy.[5] Such a reliance on one aspect of the overall economy has its own set of risks.
Professor Peter Spencer of the Ernst & Young ITEM Club concluded that the consumer economy in the United Kingdom would not recover from the late-2008 recession until 2011. [6] While Ann Kramer has proposed a new economic system as an alternative to a consumer-based economy, due to the effects of the recent recession. Dubbed "Partnerism", the proposed economic framework would implement equal cooperation between all sectors of the economy, elevating the significance of what the author perceives as marginalized sectors. Kramer believes that the 2008 bailout of financial institutions in the United States was not a sustainable model, commenting that "Wall Street has been acting like drunken fools". [7]
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References
- ^ John K. Galbraith, "Foreword" in Neva R. Goodwin, Frank Ackerman and David Kiron (eds), The Consumer Society (Island Press, WashingtonD.C., 1997, page xxi)
- ^ Ibid.
- ^ Jerome Segal, "Alternatives to Mass Consumption" Philosophy and Public Affairs 15:4, 1995, pages 27 to 29.
- ^ Introduction to Prosperity and Thrift, from Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929, Library of Congress.
- ^ The Support Economy: Why Corporations Are Failing Individuals and The Next Episode of Capitalism, Shoshana Zuboff & James Maxmin, pg. 8.
- ^ Wallop, Henry & Conway, Edmund (2008). "Consumer economy will not recover until 2011". The Telegraph, telegraph.co.uk.
- ^ Kramer, Ann (2008). "Beyond the Consumer Economy: Partnerism". OpEdNews