Our All-Consuming Obsession

David Brooks of the New York Times wrote an interesting column back in February called, “Carpe Diem Nation” (I read it in the Feb. 13^th edition of the International Herald Tribune; published on Feb. 11th in the NYTimes). In it, Mr. Brooks points out the extent to which the national attitude in the United States has shifted from one of sacrificing for the sake of a better future to one of sacrificing the future for the sake of a more comfortable present. I almost always find Mr. Brooks to be insightful; this time, his message is both insightful and disturbing. We are stealing from our children and grandchildren to maintain the lifestyles to which we have become accustomed. There is enormous irony here; on a superficial level, my generation has probably lavished more luxury on our children than any in history (I was 15 before I had a room of my own; many kids going off to college these days find the notion of sharing a room with someone to be not only foreign, but completely unacceptable). But on a deeper level, we are creating terrible problems for our progeny to solve.

Mr. Brooks talks about two of the most obvious ways the current generation is running up a bill for future ones to pay: out-of-control growth of government entitlement programs for the elderly (especially Medicare), and the crippling obligations that pensions and retirement benefits represent for many corporations. He goes on to note that in that in 1982, U.S. banks lent out $0.80 to fund investments for every $1.00 they lent out to fund consumption activities. By 2011, this ratio was $0.30 for every $1.00. This is an extremely bad omen. We are buying ever-increasing amounts of “stuff” for ourselves, rather than building for the future.

I would add a third dimension to the public & private debt problems Mr. Brooks details: we are chewing up resources and spewing out waste at unprecedented rates. These, too, create debts which future generations will have to pay. Since the industrial revolution began some two-hundred years ago, individuals, companies, and corporations have been rewarded for “externalizing” costs – i.e., arranging for someone else to pay for some part of the costs of their service, product, or manufacturing process. Companies do this in lots of ways. Lumber companies obtain the right to harvest trees on public land – i.e., trees which are owned by the U.S. taxpayer – for a fraction of the true value. Farmers receive subsidized crop insurance. Coal-fired power plants, refineries, and paper mills emit pollutants into the atmosphere and the ground (although not as much as they used to) which degrade the quality of the air and water nearby. And everybody lobbies Congress for tax breaks specific to their industry (or, if possible, their company).

We could get away with this as long as our total need for resources was small relative to the total availability of resources (I’m including the Earth’s ability to absorb and neutralize our waste as a “resource” here). That’s not the case anymore. We need to ensure that the full costs associated with the production of a good or service is included in the price of that good or service. This is one of the reasons that I came out in favor of a tax on carbon in an earlier blog post.

But let’s get back to our trend toward consumption rather than investment. In The Ecology of Commerce, Paul Hawken points out that when WWII ended, the massive American industrial engine which had been built up for the war effort had to shift from making weapons and other military gear to making other stuff (either that or it had to be seriously ramped down). But such a shift in manufacturing focus only works if people buy the stuff being made. But not to worry – buy it they did. We’re still buying it. Consumer purchases comprise approximately 70% of Gross Domestic Product in the U.S. If we should all decide that we’re happy with what we have one day, the entire economy would grind to a halt.

I find myself wondering: To what end? If our mighty economic engine is really just consuming non-renewable resources and turning them into waste with no lasting benefits, only fleeting enjoyment, isn’t this like spending the family wealth – inherited wealth, I might add; we did nothing to earn these resources – to take a series of wonderful vacations? It’s one thing if money is spent or resources are consumed for the purpose of building something for the benefit of future generations – i.e., investing. It’s quite another to spend it on a wall-sized flat-screen TV.

If this sounds like condescending finger-wagging, let me be clear: I’m as guilty as anyone. I love frittering away my hard-earned money on vacations. Even though I don’t usually run out and buy the latest high-tech gizmo, my house is still filled with stuff I don’t need. I almost always carry a laptop, an ipad, and an iphone – isn’t that a bit of overkill?

It would be one thing if all this junk really improved our quality of life or made us happier than, say, our parents were, but I don’t think it does. If anything, our gadgets chain us to our work 24/7. My parents certainly had more leisure time than I do. So why do we keep buying this stuff? We are apparently even willing to go into debt – and put future generations into debt – to keep the cycle going.

When Chuck Prince, CEO of Citigroup during the lead-up to the financial meltdown, was asked why he kept putting money into collateralized debt obligations when he knew the whole thing was bound to implode, said, “As long as the music is still playing, you’ve got to dance.” What the hell is wrong with our financial system when that logic makes sense to the head of one of the largest banks in the world? What the hell is wrong with our society when we can see that what we’re doing cannot go on indefinitely, that we’re causing problems in ways we are only beginning to understand on a scale we can just barely imagine, yet everyone is heavily incentivized not only to continue, but to continue to accelerate?

“Consumption” used to be another word for tuberculosis, a debilitating disease whose victims develop a terrible cough and have difficulty breathing. If left untreated, it is often fatal. Mr. Brooks’s article makes me wonder if that’s going to be my generation’s epitaph: “Here lie the Baby Boomers – Died from Consumption.”