Some may argue that consumerism isn't fueling the rampant consumer debt; the real problem is that wages have been stagnant and consumers just can't keep up with the cost of living. But, following Keynes' line of reasoning, consumption should at least be decreasing as incomes are falling, but, instead, consumption is increasing and now accounts for two thirds of our GDP.
Some are beginning to question, just like Galbraith, if creating wants through the market is really leading to greater well-being. In 1989, the average American consumed twice as much as in 1969, while the average worker labored 160 more hours, the equivalent of an extra month of full-time employment. The expectation that productivity increases would eventually translate into greater leisure clearly hasn't materialized.
Communities are more fragmented and status has intensified instead of decreasing. And, unnecessary consumption with low or zero marginal utility is straining our natural resource.
In summary, as we have seen, Galbraith's Dependence Effect theory doesn't seem as silly as supporters of Keynes seem to believe. Large power monopolistic competitors need to sell large volumes of differentiated products and spend a lot of money on sales and advertising to do so. They have a ready audience that, thanks to credit card companies, don't even need to be able to afford the promises they are offered. They get into debt in exchange for questionable, if not zero, utility of goods they just don't need. As they do so, their social well being...
http://en.wikipedia.org/wiki/Advertising
Bennet, Jessica. "Spend Cycle." Newsweek 8 Aug. 2006. http://www.msnbc.msn.com/id/14251360/site/newsweek/
Galbraith, John Kenneth. Consumer Behavior and the Dependence Effect."
Kiron, David. "Consumption in the Affluent Society." http://ase.tufts.edu/gdae/publications/frontier_series/consumer_society_oe2.html
Micro. http://library.thinkquest.org/C004323/low/micro2.html
Oligopolies/Monopolistic Competition. http://www.whcbridge.com/ec7170b.html
Trends in GDP/Total Ad Volume/TV Ad Volume." http://www.tvb.org/rcentral/mediatrendstrack/gdpvolume/gdp.asp?c=gdp1
Galbraith, John Kenneth. Consumer Behavior and the Dependence Effect."
Micro. http://library.thinkquest.org/C004323/low/micro2.html
Oligopolies/Monopolistic Competition. http://www.whcbridge.com/ec7170b.html
Advertising." Wikipedia. http://en.wikipedia.org/wiki/Advertising
Trends in GDP/Total Ad Volume/TV Ad Volume. http://www.tvb.org/rcentral/mediatrendstrack/gdpvolume/gdp.asp?c=gdp1
Oligopolies/Monopolistic Competition. http://www.whcbridge.com/ec7170b.html
Bennet, Jessica. "Spend Cycle." Newsweek 8 Aug. 2006. http://www.msnbc.msn.com/id/14251360/site/newsweek/
Kiron, David. "Consumption in the Affluent Society. http://ase.tufts.edu/gdae/publications/frontier_series/consumer_society_oe2.html
