Consumerism's Role in America's Economy

What is the effect of consumerism on the American economy? The father of modern economics and capitalism, Adam Smith, maintained that ambition and acquisitiveness, two drivers of a market economy, were merely illusions. He believed it is these illusions that compel a society to work for what they believe will make them happy which, in turn, leads to a consumer-driven economy. Indeed, consumerism broadens a society’s economy through a wider selection of goods and services, but does it also increase the power and controls of a society’s government through consumer activism and regulation?

Supporters of consumerism point out that indebtedness has long been a part of America’s history. Until the 20th century, Americans believed indebtedness was a sign of wealth and power – something only the most respected members of society enjoyed. Credit cards opened doors for the middle and lower classes and allows them to purchase items once attainable only by the wealthier members of society. Advocates of consumerism believe making money via credit more available to consumers only benefits America because it encourages people to purchase more expensive goods and services. This, in turn, will drive the demand for more which leads to more jobs and more spending. Proponents further insist that society’s development is greater because of consumerism and any governmental intervention to foster the growth of consumerism is necessary to prevent the collapse of the American economy.

Those who support consumerism make the case that private companies simply cannot and should not regulate themselves. Lenient, if not almost non-existent, regulation of America’s corporate and financial institutions nearly caused the collapse of the American economy in 200...

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... become the excessive consumption that leads to consumer activism? Do Americans truly want more just for the sake of having more or are they simply seeking more security and equality? Time will tell if Americans can move beyond the idea of excessive consumption as the path to happiness and find a balance between Adam Smith’s illusions of ambition and acquisitiveness and the constant restructuring of America’s political landscape due to excessive consumer demands.

Works Cited

“Debt in America.” Issues & Controversies On File: n. pag. Issues & Controversies. Facts On File News Services, 5 Dec. 2008. Web. 20 Mar. 2011.

"Financial Regulation." Issues & Controversies. Facts On File News Services, 12 July 2010. Web. 31 Mar. 2011.

Williamson, Thad. “America Beyond Consumerism.” Dollars & Sense May/June 2008: 10-15. Facts on File News Services. Web. 10 November 2009.