Rethinking Consumption: From Wealth to Well-being

1. State of the World 2004 Rethinking Consumption:From Wealth to Well-being Gary Gardner, Erik Assadourian, and Radhika Sarin

2. The Consumer Society A society in which acquisition and use of“goods and services is the principal cultural aspiration and the surest perceived route to personal happiness, social status, and nationalsuccess.” — Paul Ekins

3. Three Points • Consumption has the character of a runaway train in much of the world • Current consumption patterns have agrowing dark side for individuals, societies, and the planet • A different model of consumption is available—one that can deliver a higher quality of life

4. 1. The State of Consumption Today

5. Private Consumption Expenditures, 2000 5% 32% U.S. & Canada 6% 29% Western Europe East Asia & Pacific 33% 21% South Asia 22% 2% Sub-Saharan Africa 11% 1% % of World Consumption Expenditures % of World Population Selected Region

6. % of World Total: % of World Total 53% 47% 16% 27% (other regions) 20% 8% 912 29% 816 494 349 271 141 U.S. & Western East Asia South Asia Industrial Developing Canada Europe & Pacific Countries Countries Distribution of Global Consumer Class, 2002 World total = 1.7 billion consumers 1000 Million Consumers 500 0

7. Global Consumer Class Selected nations, 2002 243 Million (84% of population) United States 240 M (19%) China 122 M (12%) India 121 M (95%) Japan 76 M (92%) Germany 61 M (43%) Russian Federation 58 M (33%) Consumer class Brazil Millions of People

8. 150(est.) 14 10 5 Car Growth in China ~ 0

9. Physiological Drives - Survival instinct: natural impulse to alleviate discomfort (hunger, cold, etc.) Social and Psychological Needs - Means of expressing social identity - Seeking comfort, style, and status Large Supply of Goods - Increase in production efficiency = greater availability of goods What drives the appetite for consumption?

10. Globalization - Reduction of tariffs and cheap labor = lower costs, more affordable products Technological Innovations - Greater capacity to extract raw materials and resources at lower cost (i.e., fishing trawlers) Cheap Energy and Transportation - Increased distribution and expanded markets What drives the appetite for consumption?

11. Business Practices to Stimulate Consumer Demand Global and U.S. Advertising Expenditures, 1950-2002 Advertising • - Pervasive in commercial broadcasting, print media, Internet • - Product placement in movies, TV programs Billion Dollars (2001 dollars)

12. Business Practices to Stimulate Consumer Demand Credit Cards - Consumers can purchase goods beyond their means Government Policies • - Economic subsidies affect consumption patterns • - Ex.: subsidies for suburban homebuilding lead to demand for household goods, cars, roads, etc.

13. 2. The Dark Side of Consumption

14. Natural areas under • stress • - All the world’s ecosystems are shrinking to make way for human development The Dark Side of Consumption • Huge amount of consumer waste • Unlimited consumption at odds with patterns in natural world • In nature, no worthless waste, all matter reused or recycled

15. Global Living Planet Index Tool developed by World Wildlife Fund (WWF) International to measure health of natural systems (e.g., forests, oceans, freshwater systems, etc.)

16. Economic Activity and Ecosystem Health, 1970-2000

17. The Personal Toll HEALTH 65 % of American adults are overweight or obese 61% of Americans with credit cards carry a balance, averaging $12,000 DEBT TIME Americans work the equivalent of 9 weeks more each year than Europeans

18. Wealth vs. Well-being Once basic needs are met, affluenceand the accumulation of goods do not necessarily correlate with a higher quality of life

19. Average Income and Happiness in the United States, 1957-2002

20. 3. A New Model is Possible

21. Basic Needs Food, shelter, secure livelihood Good Health Physical and mental health and a robust natural environment Healthy Social Relations A supportive social network Security Personal safety and security of one’s possessions Freedom The capacity to achieve one’s development potential Aspects of Well-being

22. Well-being Index • Tool developed by Robert Prescott-Allen to measure societal health • Uses 87 different indicators to measure human and ecological well-being • e.g., Life expectancy, school enrollment rate, extent of deforestation, level of carbon dioxide emission, etc. • Values for indicators are standardized and summed into a single score

23. 79 71 64 49 49 31 27 27 23 Sweden (1st) (Rank out of 180 countries) Well-being (WB) Ranking (selected countries) Human WB Enviro WB Total WB Maximum Score 100 80 60 40 20 0 Benin (47th) Saudi Arabia (176th)

24. 79 78 73 64 52 50 49 31 22 Sweden (1st) (Rank out of 180 countries) Rethinking Progress Human WB Enviro WB Total WB Maximum Score 100 Similar Human WB, but different Enviro WB: How a nation meets its development goals as important as whetherit meets them 80 60 40 20 0 Netherlands (24th) United States (27th)

25. Physical Infrastructure e.g., urban planning, mass transit Political Infrastructure e.g., subsidies, taxes, laws on working hours Cultural Infrastructure e.g., harnessing advertising, improving education Toward an Infrastructure of Well-being

26. Getting to the Good Life Current economic goal of unlimited consumption is unsustainable • New emphasis for economy: • to create societies with a higher quality of life • to live in harmony with natural environment • to facilitate healthy choices • to tend to the basic needs of all

27. About the Authors Erik Assadourian is a Staff Researcher at the Worldwatch Institute Gary Gardner is the Institute’s Director of Research Radhika Sarin was formerly a Staff Researcher at the Institute

28. More information on State of the World 2004 at www.worldwatch.org