Sunday, August 9, 2009

The Consummunism Paradox. How Consumerism Leads to ‘Communism’

Conservatives are busy warning us of the looming danger of "communism" to our free market economy. According to this narrative, businesses of America are what makes this country great. Well, who can disagree with the dynamism of capitalism? But, what we have seen develop over the past decades is entitlement capitalism. More and more people expect capitalism to ensure most people with the so-called "necessities" of life. Even many leftists have abandoned or de-emphasized socialism in favor of capitalism, at least on condition that capitalism will provide EVERYONE–or nearly everyone–with all the amenities of modern living. Indeed, this has been the great compromise.

Especially during the Clinton-Blair 90s, the Left decided to embrace and use capitalism as the engine of social progress and egalitarianism. Globalism would drive down prices of goods and services. Things would become so cheap that everyone could afford their goodies from Walmart or whatevermart. Mass global production and innovation would make the latest gadgets available to everyone. Even in poor communities, fat lazy slobs would be able to afford cell phones, microwave ovens, flat screen TVs, and computers hooked onto the internet. Capitalism went from supply-and-demand to supply-and-entitlement.

The dominant liberals in government allowed capitalists to do their thing as long as capitalists expanded production, drove down costs, and made things available to nearly EVERYONE, even those without jobs or those who had to borrow to spend. Capitalists were assured of great profits by shipping jobs to China and outsourcing to India. Capitalists were assured of easy and bountiful loans to their enterprises, and easier and even more bountiful loans to their customers who would buy their services and products. Businesses could borrow and expand in expectation of future profits. This idea and practice reached its apotheosis with the Internet Bubble. And, customers, with their stock portfolio bubble growing bigger and bigger, could borrow and spend and borrow more and spend more. In the 90s, many people borrowed money to invest in the Internet Bubble. In the 2000s, construction firms borrowed to build more houses, and people borrowed to buy those houses. Banks borrowed from other banks to lend more to businesses and consumers. And, so on and on.

One may call this SOCIAL FINANCE. In many ways, capitalists in this crazy system were greedy sons of bitches. But, they were allowed to be greedy sons of bitches–indeed encouraged to be greedy sons of bitches and even praised as great humanitarians–on condition that they made goods, services, autos, houses, etc cheaply and widely available to most people, even those who couldn’t afford them. This is why New Finance and Government Intervention went hand in hand. Social Finance.
Democrats bought into this New Compromise as the End Result seemed to be what they desired–spreading the ‘American Dream’ to more Americans, especially lower-income Americans who generally vote Democratic. Even those with low-paying jobs or living on welfare could buy lots of stuff at Walmart and even buy a house in the 2000s. Republicans also embraced this Great Compromise as it seemed to indicate that capitalism can indeed create consumerist Heaven on Earth where even a poor nobody with no savings can buy a car, widescreen tv, computer, cellphones, and a house(or several for flipping). One might call it Welfare Capitalism.
And businesses embraced this system because people seemed to just spend and spend like there was no tomorrow. And, as there was plenty of loans made available by banks, businesses–profitable or not–could just borrow more and expand more. And, people could keep borrowing and spending. Indeed, businesses of America used their lobbyists to pressure the US government to expand the system of Entitlement Capitalism and Social Finance.

But, what happened at the end of the day? People spent and spent. They borrowed and spent. Government pressured businesses and banks to offer more loans and easier credit so that people could spend and spend. And, businesses pressured government to enact and enforce policies that would goad people to suppress their anxieties, be happy, and spend and spend.
If businesses hate one thing, it’s people saving than spending. Businesses see money saved as money not spent. Businesses want people to spend all their money and then borrow some more to spend more and more... until the customer can’t borrow anymore. It’s like how Las Vegas operates. They want you to gamble your wealth down to your last penny. Then, they loan you money and make you gamble more until you lose your house and your shirt. Finally, when you have nothing left to spend or borrow with as collateral, you’re thrown out into the streets. When that happens, what do you do? You turn to government for help!!

Anyway, this is the paradox. On the one hand, we are led to believe–often through business lobby groups–that free enterprise is a great thing and is at odds with Big Government. But, it’s gotten to a point where the success of many businesses depends on Big Government largesse and intervention. Businesses have done away with moral hazard and are willing to borrow, spend, invest, expand, and etc–along with their customers–only because Big Government provides safety nets to everyone, from Wall Street to the low-income person who bought his car and house on easy credit. Businesses want us to spend, spend, and spend. Instead of having the government get out of the way, businesses want government to provide us with safety nets so that we don’t have to worry about anything and just spend, spend, and spend like the grasshopper–as opposed to the ant.
And, this kind of mindset and activity has become necessary to the ‘well-being’ of our consumerist economy. Indeed, if we all acted like ants, the economy would implode. Our economy is based largely on consumption.
Now, it’s one thing to work hard, earn, save, and then spend what’s left. But, Americans save nothing. They just spend and spend. The positive effect of this is that the money gets pumped back into the economy so there is lots of economic activity. But, what if it turns out that a lot of people actually spent money they didn’t have? They spent what wasn’t really theirs but had been borrowed? What if lenders all say, ‘it’s time to pay back the loans’? Then the shit hits the fan.
The people look to government for help. Businesses look to government for help. In other words, consumerism paves the way for ‘communism’–not Soviet communism but Super Big Government Liberalism. Our consumerist culture tells people, "don’t save, just spend, spend, spend. And, if you have no earnings, don’t worry; just borrow and spend." But, where does all this lead to? When times are good, people think government is just a hassle. But, when the times are bad, people have no savings left. They have nothing for a rainy day. They turn to government. But, even when times are good, capitalism can lead to Big Government. Rich capitalists want something more than wealth. They want power, respect, and love. They know that political causes and agendas are the way to win the respect and love. Look at the fabulously rich Bill Gates and Warren Buffett. Or consider Ted Turner in the 90s before he lost much of his wealth. Their riches didn’t turn these men conservative but liberal. With all that dough, they wanted to exert political and social power? How? Through bigger government. When people have too much money, they take wealth for granted and want to be GOOD CITIZENS. Government becomes their tool. Same has been true of the Kennedy family and the Bush family. ‘Compassionate conservatism’ indeed. No wonder George W. Bush expanded government to mega-heights, at least before the coming of the Obamessiah backed up by, you guessed it, super rich liberal Jews, people who are so rich that they take their wealth for granted and want to do GOOD WORK through bigger government, thus gaining control over our lives.

So, it’s not a simple case of capitalism vs socialism, or business vs government. Our system is such that businesses require people borrowing and spending, and people borrow and spend because moral hazard has been removed and insured by Big Government. Businesses complain of Big Government and higher taxes, but it’s Big Government which makes people feel taken care of and protected. That’s why people have felt free to borrow and spend like there’s no tomorrow, exactly what businesses want from their consumers.
If the government taxed the rich less and provided fewer safety nets and if middle income and lower income Americans need be more responsible and save more of their money, most Americans would spend less. Under such scenario, businesses may pay less taxes to government but they would also make less money since more people would save and spend less. Businesses want us to spend our last dime. They exert pressure on government to come up with social and financial policies that makes us feel protected and thus makes us feel free to spend and spend. This kind of Babylon capitalism cannot work in the long run. It’s not only financially irresponsible but morally damaging. Spending is good–and borrowing is necessary for certain high-priced investment items–, but the rule should have been DON’T SPEND WHAT YOU CAN’T AFFORD AND DON’T BORROW WHAT YOU CAN’T PAY BACK. But, the corrupt collusion of the egalitarian agenda–the idea that every American should be entitled to a car, computer, and house–and the business agenda–the idea that people should borrow and spend like there is no tomorrow–has eroded away the core moral economic principles of this country. We still believes in risks but not the responsibility.


  1. In response to your post on consumerism :

    Industrial Society Destroys Mind and Environment.

    Industrial Society is destroying necessary things [Animals, Trees, Air, Water and Land] for making unnecessary things [consumer goods].

    "Growth Rate" - "Economy Rate" - "GDP"

    These are figures of "Ecocide".
    These are figures of "crimes against Nature".
    These are figures of "destruction of Ecosystems".
    These are figures of "Insanity, Abnormality and Criminality".

    Chief Seattle of the Indian Tribe had warned the destroyers of ecosystems way back in 1854 :

    Only after the last tree has been cut down,
    Only after the last river has been poisoned,
    Only after the last fish has been caught,
    Only then will you realize that you cannot eat money.

    Industrial Society has been spreading blatant lies over the years.

    "Green Industry", "Green Technology", "Ethical Consumerism", "Sustainable Development".

    These are contradictory terms – these are oxymorons.

    Industrialization can never be green – it is impossible.

    You cannot save a person after you have killed him.
    You cannot save ecosystems after you have killed them for making consumer goods.

    When we make consumer goods we kill Animals, Trees, Air, Water and Land - directly or indirectly.

    Industrial Society destroys ecosystems - all Industrial Societies destroy ecosystems.

    It hardly matters whether it is "Capitalist Industrial Society" - "Communist Industrial Society" - or "Socialist Industrial Society".

    Industrial Society destroys ecosystems at every stage of its functioning - when consumer goods are produced - when consumer goods are used - when consumer goods are discarded/ recycled.

    Raw material for industry is obtained by cutting up Forests. It is extracted by mining/ digging up the earth. It comes by destroying/ killing Trees, Animals and Land.

    Industries/ Factories use Water. The water that comes out of Factories is contaminated with hundreds of toxic chemicals. What to speak of Rivers - entire Oceans have been polluted. Industry kills Water.

    Industries/ Factories burn millions of tonnes of fuel - and when raw material is melted/ heated up, hundreds of toxic chemicals are released into the atmosphere. Industry kills Air.

    Industrial Society has covered millions of square miles of land with cement and concrete. Industry kills Land.

    When consumer goods are discarded/ thrown away in landfills it again leads to destruction of ecosystems.

    When consumer goods are recycled, hundreds of toxic chemicals are released into air, water and land.

    Consumer goods are sold/ marketed through a network of millions of kilometers of rail / road network and shipping routes which causes destruction of all ecosystems that come in the way.

    We have limited resources/ ecosystems on earth which is just 40,000 km in circumference.

    If we destroy ecosystems for fewer things [food, clothing, shelter] the ecosystems will last longer.

    If we destroy ecosystems for more things [consumer goods] the ecosystems will finish much sooner.

    The fewer things we make the more sustainable we are.

    This is common sense - plain common sense - which the so called smart, intelligent, advanced, civilized and developed Industrial Society does not possess.

    The collapse has already happened for millions of other species – most of them have been decimated.

    Very soon it will be the turn of man to go.


    Industrial Society Destroys Mind and Environment

    Industrial Society Destroys Mind and Environment

  2. Interesting post - You are most right that big business has little ground to complain about the excesses of big government as big government is integral to making the current business model work.

    Related to your topic is the idea Buckminster Fuller had, which is that the West was purposely trying to create "socialism from above" as opposed to the "socialism from below" that the Soviets wrought. Fuller supported the idea, as I imagine many others of his time did. He firmly believed that with enough material goods, people would give up crime, war and terrorism (which I think explains a lot of Bush's actions). He outlined a plan and predicted that by the year 2000 Africa would be largely pacified because of the consumer outlets the West would build there. As far as I can tell, the elites still believe that if only they can inundate society with cheap goods, they can solve social problems.