Forget about diligent saving, careful spending, and avoiding debt. Forget about tax cuts and private investment. For the economy to blossom, it is essential—and morally, the right thing to do—for consumers and the government alike to increase spending substantially, according to one economic historian. How’s that as the ultimate justification for guilt-free shopping sprees?
James Livingston, a history professor at Rutgers University and the author of Against Thrift: Why Consumer Culture Is Good for the Economy, the Environment, and Your Soul, has penned an op-ed in the New York Times that questions widespread assumptions about the “moral worth of consumer culture.”
That is, most people assume that there isn’t much moral worth when it comes to consumerism. Saving is good, and since spending is the opposite of saving, it’s therefore bad. Livingston argues that these assumptions are off base:
Like the abstemious ant who scolds the feckless grasshopper as winter approaches, we think that saving is the right thing to do. Even as we shop with abandon, we feel that if only we could contain our unruly desires, we’d be committing ourselves to a better future. But we’re wrong.
For the economy to have a better future, both in the short- and long-term, Livingston says that consumers must pick up the pace on consumption. To help enable consumers to consume, the government should likewise spend more, and also adjust tax policies so that more money winds up in the hands of wage earners—so that they, of course, can spend it and keep the economy humming along.
(GALLERY: 12 Things We Buy in a Bad Economy)
Based on Livingston’s research, private investment doesn’t drive economic growth, historically speaking. What does? “Consumer debt and government spending.” In this scenario, being a spendthrift isn’t bad at all—it’s good. A frugal, debt-averse approach, by contrast, would hurt economic growth, along with the future of the nation. Being thrifty is being selfish. Therefore … for the good of the country, go shopping!
Put plainly, Livingston writes:
We consumers need to save less and spend more in the name of a better future.
The theory, blunt and controversial as it may sound, is not entirely unheard of. Many have argued that the rise of the newly prudent and frugal consumer is one of the prime forces stalling the economic recovery. There are also those who believe that the government wants consumers in debt as a means to drive economic growth.
As things now stand, though, consumers don’t seem in the mood to follow Livingston’s advice. The latest report shows that consumer confidence is back at levels from the 2008-2009 recession. Last month’s TIME/Money magazine survey also demonstrated that the frugal habits adopted during the recession have tended to stick with consumers. The much-discussed “new normal” has increasingly become the norm.
In Livingston’s mind, then, the rich—who are buying luxury goods in large numbers and are expected to go on big shopping sprees this holiday season—are among the small portion of consumers doing their fair share to help the economy. How noble!
As for all those individuals who believe in frugality and mindful spending, who hold that debt is misery and that—as crazy as this sounds—material possessions don’t lead to happiness, get with the program, slackers.