Life in the Rear-view Mirror

The Consumer Revolution

The foregoing chapters have dealt, more or less, with the technological changes I observed during my lifetime. I have gone from living in a house with no electricity, to one where almost everything runs on it. Electricity, more than anything else, has changed the way we live. When I started my professional career, electricity consumption was doubling every ten years. My employer, at the time, had to double the electricity output every ten years. It was like doubling the number of generating stations in production every decade. It was an extraordinary period of growth and posed a Herculean challenge to the company. Two things were happening: the province’s population was growing rapidly; and the technology revolution was increasing power consumption at a rate that was far in excess of per capita GDP growth. The age of consumerism had arrived.

This and subsequent chapters focus mainly on the consumer revolution. It discusses questions such as, why did we over consume? And, how was it made possible?

Until recently, consumerism was mostly a Western phenomenon. In North America, it started at about the same time that married women, from middle class families entered the workforce. This singular event created a new income stream and more disposable income, which was used to stoke overconsumption. It also began at about the same time that media advertising started bombarding our brains with buy stimuli at more rapid rates the ever before. There was no way of escaping the brainwashing that was unleashed upon us to deliberately change us from mindful to mindless consumers. It then picked up speed when financial institutions unleashed the era of cheap credit. They were hell bent on changing us from savers to debtors. It also accelerated when free trade and globalization became the mots de jour. And then came Chinese manufacturing, or what I call the Chinese phenomenon.

Looking back, it seems that we lived in an era when everything was possible, and the sky was the limit. Keeping up with the Jones’s was the new middleclass imperative, and the grass was always greener on the other side of the street. We had a lot, but we yearned more. It was just mindless consumption. Most people’s rationale was, I work hard so I can spoil myself, or I work hard so I can spoil my children, or both. We indulged to excess in all that life had to offer. Some did it more than others, but we all overindulged. We simply didn’t know better. We lived like there was no tomorrow!

Savings and earnings fuelled the first phase of consumerism. The additional paycheques from married women gave consumerism a boost. Money was spent as soon as it was earned, but not before. The concept of easy credit wasn’t born yet. The more frugal in society bought big-ticket items only after they had saved sufficient money. Debt was a four-letter word. Very few would take out a loan to buy a car. This conservative and disciplined attitude towards debt held back economic growth, argued some pundits. So they convinced the government that easing consumer credit regulations would not only be good for the banks and the economy, but would also generate additional tax revenue for the government. They knew which buttons to push, and so the era of easy credit began.

In 1968, Chargex, the predecessor of the Visa Card, started teaching people to spend money even before it was earned. Their slogan was, will that be cash or Chargex? Why carry cash in your wallet that can be stolen, when you can carry a little card without risk? Like any new trend, it took time for people to get on the bandwagon; but once they did, it took off like wildfire. Initially, interest rates on outstanding balances were deliberately set low. Once credit card users were addicted to easy credit, the interest charges skyrocketed. Nowadays, despite the incredibly high interest rates on unpaid balances, everybody has at least one credit card, and many carry a balance from one month to another. Eventually, all financial institutions, major department stores, and big retailing outfits offered them: everyone joined the party. The new credit card slogan became: don’t leave home without it!