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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, 2002
0
500
Mil
lio
n C
on
sum
ers
WesternEurope
349
20%
East Asia& Pacific
494
29%
South Asia
141
8%
1000
IndustrialCountries
912
53%
DevelopingCountries
816
47%
World total = 1.7 billion consumers
U.S. &Canada
271
% of World Total% of World Total:16%
27% (other regions)
Global Consumer ClassSelected 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
0
50
100
150
200
1980 2000 2002 2003 2015Year
Mil
lio
ns
of
Ca
rs
5 10 14
150(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 DemandB
illi
on
Do
llar
s (2
001
do
llar
s)
Global and U.S. Advertising Expenditures, 1950-2002
Advertising- Pervasive in commercial broadcasting, print media, Internet
- Product placement in movies, TV programs
0
100
200
300
400
500
1950 1960 1970 1980 1990 2000
Source: McCann-Erickson
United States
World
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, 1970-2000
0.0
1.0
2.0
3.0
1970 1980 1990 2000
Source: Maddison, IMF, UNEP, WWF, RP
(197
0 =
1.0
)
Gross World Product Index
Global Living Planet Index
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, 1957-2002
0
5,000
10,000
15,000
20,000
25,000
1957 1967 1977 1987 1997
Source: Myers
Ave
rag
e In
com
e (1
995
do
llars
)
0
20
40
60
80
100
Percen
t of P
eop
le "V
ery Hap
py"
Average Income
Very Happy People
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
0
20
40
60
80
100Maximum Score
Human WB Enviro WB Total WB
(Rank out of 180 countries)
Sweden(1st)
79
49
64
Benin (47th)
27
71
49
Saudi Arabia(176th)
3123 27
Well-being (WB) Ranking(selected countries)
0
20
40
60
80
100Maximum Score
Human WB Enviro WB Total WB
(Rank out of 180 countries)
Sweden(1st)
79
49
64
Netherlands (24th)
78
22
50
United States(27th)
73
31
52
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
More information on State of the World 2004
at www.worldwatch.org