Consumerism

In their book, Nation of Rebels, Joseph Heath and Andrew Potter explain why the Marxian critique of the consumer society as a product of "generalized overproduction" doesn't work: "There is no such thing as generalized overproduction. Never was, never has been."

More fully, "The problem with Marx's theory is that it ignores the fact that a market economy is fundamentally a system of exchange. Although we sell goods in return for money, the money itself is not consumed; we simply use it in order to purchase other goods from other people. As a result, the supply of goods constitutes the demand for other goods. Total supply and total demand always add up to the same amount, simply because they are the same thing from two different perspectives. So while there can be 'too much' of one particular good relative to other goods, there cannot be an excess of goods in general."

They use the example of a bread-maker who reduces his wage costs by $1000 a week by introducing an automated mixer. For the Marxist, this puts the capitalist in a contradiction: "since his workers eat bread, this reduction in wages reduces demand for the capitalist's own product. It this the beginning of a vicious spiral?" No: "The $1000 that is cut out of the wage bill does not disappear. It is presumably taken by the capitalist in the form of profits. What does he do with this money? He either spends it or saves it. While cutting wages may reduce the demand for bread, when the capitalist spends the money he increases the demand for other products produced by other firms. Thus the cut to the wage bill does not deprive the economy as a whole of $1000 worth of demand, it simply shifts it out of one sector into another . . . . The situation is not much different if he saves it. Banks take money that is deposited and lend it out again, either to investors, who spend it on capital goods, or to other consumers, who simply spend it. Either way, total demand for goods remains unaffected by the wage reductions; it is simply shifted out of one sector into another."

This is why consumer-resistance in the form of Adbusters magazine's annual "Buy Nothing Days" don't do anything: "one way or another, your total income gets spent. If you don't spend it, you put it in the bank and someone else spends it. The only way you can reduce consumption is by reducing your contribution to production. Yet somehow an annual Earn Nothing Day doesn't have the same ring to it."

posted by Peter J. Leithart on Thursday, May 31, 2007 at 09:29 AM

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