Preparing for the End of Consumer Society

By famously implementing the $5 per day wage in 1914, Henry Ford was the first industrialist to recognize that a consumer society can only function when workers have access to ample income to finance discretionary purchases. During the 1930s, under the tutelage of John Maynard Keynes, this understanding became a key tenet of macroeconomic policy in many parts of the world. However, by the 1970s, high inflation, obstinate unemployment and other sources of economic instability called this strategy into question and unleashed during the following decades a wave of neoliberal reforms.

Ensuing years brought forth a protracted period of stagnating wages and increasing income inequality, and consumer society was perpetuated, as is today widely recognized, by deregulation of the banking sector and a deluge of easily available credit. The financial crisis of 2007-2008 and subsequent Great Recession exposed the fallacies of such policies, and uncertainty has resurfaced about the durability of consumerism as an economic engine.

Consumer society as a system of social organization appears to be in jeopardy on a number of fronts. First, populations across North America, Europe and most of Asia are ageing, and demographic change is shifting preferences away from lifestyles premised on material accumulation. In addition, millennials continue to face extremely precarious job prospects. The resultant consequence of these dual trends is evident in faltering rates of home ownership and declining levels of personal automobile use in a number of countries.

Second, rising income inequality is fracturing the middle class that has for more than half a century been the flywheelof consumer society and solidifying a two-tier, hourglass-shaped social structure.

Third, private consumption is dependent on complementary public procurement, and austerity policies over the past decade are emblematic of declining political wherewithal to make requisite investments to renew the social and physical infrastructure on which consumer society relies.

Finally, and perhaps most significantly, consumerist lifestyles have long been predicated on waged employment andthe willingness of workers to spend relatively reliable income streams on goods and services. Steady work that compensates employees on a salaried or hourly basis and provides modest benefits are disappearing, and less regularized, contingent work is becoming commonplace. Some analysts have disingenuously characterized the proliferation of Uber-type jobs as “sharing,” when this trend actually demonstrates how workers are finding it increasingly necessary to string together freelance assignments to make ends meet.

At the same time that we are beginning to transition away from consumer society, a new wave of digital technologies premised on artificial intelligence is set to unsettle a large number of economic sectors — from health care toengineering. One upshot of this disruption will be that short-term tasks will become an entirely normal feature of the employment landscape.

In response to these developments, several governments have begun to evince interest in providing workers with a non-labor source of income. These proposals come in several varieties and include a universal basic income (UBI), a citizen’s dividend and broad-based stock ownership in corporations. Particularly notable is Finland’s recently announced program to test the viability of a UBI scheme that will pay all eligible recipients approximately €800 per month. Other countries are actively debating similar initiatives.

Unfortunately, extreme political fractiousness in the United States and Europe makes it improbable that these ideas will promptly receive wider legislative endorsement. In the meantime, what are struggling households to do as theorganizational pillars of consumer society collapse and the most readily apparent alternative resembles a 21st century version of feudalism?

We seem to be at a juncture where we need to rediscover the lessons of mutual assistance. One option entails building on novel modes of cooperativism that meld production and consumption into a single organization.

The largest worker-consumer cooperative in the world is the 800-store Eroski supermarket chain, a subsidiary of the venerable Mondragón cooperative headquartered in the Basque region of Spain. Smaller prototypes thrive in the United States in the form of the Weaver Street Market in North Carolina and the Black Star Co-op Pub and Brewery in Texas. There are also indications that the reticence that has traditionally marked the relationship between cooperatives and trade unions is giving way to a new spirit of collaboration supportive of this general idea.

History suggests that economic transitions are extremely painful and chaotic. This was the case as agrarian society gave way to industrial society during the second half of the 18th century. Similar forms of dislocation were widespread as the service economy in turn displaced manufacturing two centuries later. Even as this latter transformation is still playing out, a new era of expansive socio-technical change is starting to unfold. As the familiar features of consumer society recede, new institutionalized forms of cooperativism can help to ease some of the disruption and foreseeable hardship.