This paper examines the historical debate between production and consumption as the primary drivers of economic life, tracing how production dominated nineteenth-century economic thought before giving way to consumption-oriented theories in the twentieth century. The paper analyzes how advertising, materialism, and manufactured social norms transformed consumer behavior, moving purchasing decisions away from rational need-satisfaction toward symbolic accumulation. It also considers how globalization and growing environmental concerns may be beginning to challenge the consumption-dominant model that has characterized Western economies since the end of World War II.
Two polarizing concepts define the nature of economic life. These opposing views — consumption and production — have formed the basis for debate among social scientists throughout the twentieth century, and as the world moves deeper into the twenty-first century, the debate continues (Butler, 2001). The debate centers on how each view affects the economy and which plays a more important role in driving it.
The two viewpoints arose during different historical periods. Production theory dominated economic thought in the nineteenth century as the world entered the industrial age. The theory held that through increased production, humanity's need and desire for wealth would be satisfied. For proponents of the production approach, consumption was not a significant concern.
The consumption approach to economics developed in the twentieth century and has dominated economic thought to the present day (McCracken, 1987). From this point of view, the driving force behind economics is the desire to consume. The emphasis falls on how to increase consumption rather than on how to increase production.
Although production and consumption began as economic approaches, they have been incorporated into the other social sciences as well. Sociologically, consumption has become an important concept as experts examine how economic decisions are made by members of society. For most people, purchasing and other behaviors are influenced by many factors, but it cannot be denied that peer pressure and the media play a role, and that advertising is at the core of it all.
Prior to the twentieth century, consumption was considered to be the result of need and the ability of manufacturers to produce what was needed. As the twentieth century progressed, however, manufacturers became capable of producing at a level where basic needs were being satisfied easily. Manufacturers suddenly found themselves with surplus products and a need to find new markets and consumers. Through the effective use of advertising, new markets and needs were created, and consumption became more important than production (Pollay, 1986).
The twentieth century witnessed the era of materialism. Consumers no longer made decisions based on rational choices. Material accumulation began to take on a symbolic value, and the functional value of goods became less important. This is not to say that satisfying basic needs was an unimportant aspect of the economy — a substantial portion of any nation's economy must still be dedicated to meeting those needs — but in order to keep consumption consistent with production, manufacturers had to convince consumers that their needs were greater than they once were. They had to persuade consumers that they needed more cars, more clothes, more appliances, and so on. These additional purchases are the result of false needs created through advertising and marketing.
The advertising industry, particularly since the end of the Second World War, has promoted this atmosphere of consumption (Rucker, 2008). The industry has created perceived needs, manipulating consumers into believing they must have certain products and that failing to obtain them leads to dissatisfaction. For example, the advertising industry has convinced consumers that they must have a full range of personal hygiene products — mouthwash, toothpaste, hairspray, shampoo, and conditioner — in order to be both healthy and well-groomed. Lacking such products creates insecurity and a sense of being inadequate or unsuccessful.
This push for ever-greater consumption began slowly, but over time the advertising industry successfully moved the bar higher, and the definition of what the average consumer needed in order to function in society crept steadily upward. A society once characterized by families sharing one car, owning a single television, and passing clothes down to younger children has been transformed into one where every family member must have a vehicle, televisions occupy every room, and old clothes are donated rather than handed down.
The importance of consumption to the modern economy is that consumers must continue consuming more in order to meet social and institutional expectations (Longhorn, 2007). Most people are reluctant to distinguish themselves by consuming only what they need or buying products that are merely functional. Instead, consumers buy what their neighbors purchase and seek out what is identified as the best available.
"Consumption as social conformity and symbolic status"
"Global and environmental forces pressuring consumption model"
McCracken, G. (1987). The history of consumption: A literature review and consumer guide. Journal of Consumer Policy, 139–166.
Pollay, R. W. (1986). The distorted mirror: Reflections on the unintended consequences of advertising. The Journal of Marketing, 18–36.
Rucker, D. D. (2008). Desire to acquire: Powerlessness and compensatory consumption. Journal of Consumer Research, 257–267.
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