Mindless Consumerism in 2023 shouldn't be a thing, right? After all, we should know by now that it doesn't lead to happiness, because we have had it drilled into us for decades already -
So why do we keep buying?
What else are we going to spend our money on?
We were talking at lunch about what kinds of cutbacks we are making, where most people are doing something to at least feel they are thinking about it. Yet, reading the various reports on how much credit card purchases are increasing, I am not sure how many are making the cuts. For example in Australia, 2022 Spending was tipped to be around 27.3 billion, yet the figures in January were 33.5 billion, which is 22% higher than expected. That is above the average inflation rate, but it is always going to depend on what is being bought.
For instance, in Finland, the national inflation rate is almost 9%, however the inflation rate on food is 16% year on year. This means that while some things being tracked might not have increased much or perhaps in areas that can be cut from the spending, food is one of those things people need to consume. For those who were already on a tight budget, what option is there, but to move to a credit card?
And I think that many have done so in order to maintain their standard of living, with the cutbacks being more "cosmetic" than actually having a significant impact on their financial situation. For example, one of the people said that he made the conscious decision not to buy a duty-free whisky, which unless he has a major drinking problem (he hasn't), isn't really going to do much, unless this is representative of other cutbacks being made in his life.
Similarly, last night I was driving one of the other people in the conversation to a furniture store to look at a sofa. While we drove he was talking about how his mortgage has increased by around €200 a month now and he can feel the difference. Today, I asked about the sofa and he said yeah, it was good, but it might not be quite the one he is after, even though the price of it (€1000) is okay. He showed me the other online, which is very similar but has a slightly different material which he may get instead, which is €4300 euros. That is a difference of €3300, which is 16.5 months of covering the changes to his mortgage repayments - and they might still be going higher in the future.
I have always been impressed at how minor variations in products can elicit such justifications, and posit that it has something to do with the narcissism of small differences mechanism,
Narcissism of small differences
In psychoanalysis, the narcissism of small differences is the idea that the more a relationship or community shares commonalities, the more likely the people in it are to engage in interpersonal feuds and mutual ridicule because of hypersensitivity to minor differences perceived in each other.
The "feud" is through the arguments we make for or against products and the perception of their quality or value. Slight differences between two consumer items makes us "fight" for one over the other and spend an otherwise unjustifiable amount of time travelling between stores, researching online and umming and ahhing over the pros and cons. And then, once we have made the decision and bought the item, we get that kick of dopamine at making the right call and getting what we wanted, until the doubt creeps in on whether we should have chosen the other, or an advertisement appears in our feed based on our searches that gives a new option to consider, lessening the "joy" we get from the purchase, as we are already looking to replace it with another.
And essentially for most products on the market for most things, there are only small differences setting them apart from each other, at least in the price ranges the average person is generally looking. This is the case because they have to compete against each other, so they have to each deliver the core functions, and it is on these minor differences that they can set themselves apart. So, they drive the hype as if it is important and that there is no way a person could be happy unless they have their specific "small difference" in an attempt to influence buying behaviors.
And we fall for it, because even though it doesn't make us happy, we keep going down the consumer path of "finding out more" about products that for the most part, will bring nothing much different to our lives. So, we have a sunk cost in the item, meaning that if we don't buy, it will be time wasted, and we all want to be efficient...
And as my colleagues mentioned today, there is a "journey" in buying, it is a process and for men at least, it seems that this is an important part of the decision making. I think this could be because not only does all the research inject effort capital, it also makes people feel like "experts" on a subject, because they have spent a few hours Googling and reading reviews.
But again, this is on items that aren't going to change their lives, but ask the same people to look into the reasoning for purchasing Bitcoin or their arguments against it, and you will discover a lot of outdated information as pushback, and an unwillingness to spend any time researching it themselves. Yet still, they are confident that they are making wise investment decisions with their capital resources.
Time is money?
It is a misnomer.
Time isn't money, but it is a resource that can be used in ways that can generate wealth, or wasted in ways that cost potential. I wonder if we were to add up all the time we spend "researching" consumer products of whatever kind grab our individual attention, would that time spent have made us money? Perhaps the argument can be made that there are savings to be had, but this is a justification that a lot of my female friends will use - "I saved 20% on this.." But what actually happened is, they spent 80%. Only if it was on a product that was needed and would have been bought anyway, would a discount constitute as a saving - otherwise, it is a spend.
The consumer mindset is more than the desire to consume endlessly, it is also driven by clusters of human behavior that get leveraged to influence our spend. We each have access to a set of resources that we can use for our lives and how we use them is going to affect our experience now, and in the future. Right now, people are being affected by economic conditions, yet the consumer mechanisms are still in play and making it very hard for many people to meet their needs, because they are still trying to meet their wants.
Even if it is on credit.
But while these small differences in products don't matter much for our lives - they can make a massive difference to our finances.
Taraz
[ Gen1: Hive ]