Poor Us

Can spending less really cure what ails America?

The Overspent American: Upscaling, Downsizing, and the New Consumer
By Juliet B. Schor
Basic Books; 244 pages; $30

Economist Juliet Schor is among a handful of academics to have achieved the widely held and rarely admitted to dream of the professoriate: reaching a popular audience with work that also passes muster technically. Success as a pop academic requires operating on two levels–that is, making distinctly different arguments for pop readers and academic readers. Schor’s pop argument is: We spend too much on stuff we don’t need. Her academic argument is: For complicated sociological reasons (which I’ll explain in a minute), American spending patterns have changed in ways we need to take notice of.

Usually in the pop-academic genre, the pop side will be interesting and the academic side dutiful and obscure. In the case of The Overspent American, the reverse is the case.

Intellectuals have never warmed to American consumer culture. Bashing it is a tradition that begins with the advent of a national consumer market in the early decades of the 20th century (reread Babbitt if you don’t believe me). The idea that a country founded upon high-flown principles has come to care more about fame, money, and accumulating stuff than about the principles has long been galling to those who hold the principles dear. So when Schor scoldingly writes, for example, “In 1995 alone, Americans spent $7.6 billion on residential lawn care, much of it environmentally destructive,” it doesn’t feel like a fresh thought. Even if you accept that lawns and cars and credit card debt and designer logos are pernicious, to attack them seems, as a writing project, a little easy. The main point of Schor’s previous book, The Overworked American (which can be adduced from the title), was less familiar than her main point here.

But Schor’s sociological theory is fascinating. It involves a change in most consumers’ reference groups. A reference group (the term was invented in 1942 by a psychologist named Herbert Hyman) is the set of people with whom you compare yourself in order to appraise how you’re doing. Your level of aspiration and contentment varies not according to some absolute standard but according to your choice of reference group. Change your reference group, and you’ll find that you’re suddenly feeling much better (or worse) about your situation.

The reference group is one of the most widely used concepts in social science and also in market research. The first person to apply it to the field of consumer spending was James Duesenberry, the Harvard economist, who wrote a book in 1949 arguing that for most people, the reference group is made up of neighbors. Hence “keeping up with the Joneses”–we buy whatever it takes to have what our neighbors have.

Schor believes that for most consumers, neighbors have been replaced as the primary reference group by a much broader and better-off panoply of co-workers, acquaintances, and characters presented by the media. Prime-time television is full of supposedly ordinary, typical families who live in fancier circumstances than anyone at the median income could afford. The entry of mothers into the work force has exposed them to people across a much wider income range than obtains in the neighborhood. In a survey Schor conducted at a big corporation (sounds as if it is Southwestern Bell, although in keeping with academic convention, she doesn’t give its real name), only 2 percent of the people responding said neighbors were their primary reference group.

Switching reference groups has pushed Americans’ spending habits hugely upward. Schor has come up with the slightly wacky statistic that each hour of television a person watches per week will generate $208 a year in spending. Between 1979 and 1995, she says, the average person’s spending, adjusted for inflation, increased between 30 percent and 70 percent.

The idea that the reference-group calculations that underlie consumption habits have changed makes sense. If this is a problem, then what do we do about it? Schor’s theory leads inescapably to one answer: Find another reference group for the average consumer.

So far so good. But then we come to the reference group Schor proposes as an alternative. Schor calls them “downshifters,” people who have scaled back the desperate work-and-spend cycle and are much happier as a result. She claims, somewhat implausibly, that 19 percent of Americans, not counting retirees, voluntarily downshifted between 1990 and 1996. In the chapter she devotes to anecdotal portraiture of downshifters, though, they don’t come across as being very appealing. One was laid off. Another is living on unemployment insurance. Another “found herself perilously close to the rock bottom.” Another is “trusting that, somehow, it is going to work.” Is this the reference group that launched a thousand ships?

Schor celebrates downshifters–people defined by not spending–because she views consumerism as evil. To her way of thinking no nonessential spending, no desire to possess things, can ever be innocent or morally neutral. Instead, all taste, all aesthetic judgment, all pleasure taken in things, must be a matter of what economists call “positionality.” It is merely a way of signaling status, even if we’ve deluded ourselves into thinking it’s not. There isn’t much room in Schor’s schema for even the interesting curlicues of spending culture, such as the joy in finding a bargain or personal variances in taste (e.g., “uptown” vs. “downtown”)–let alone the idea that a possession could bring its buyer simple pleasure. If, to use two of Schor’s examples, you don’t want to put aluminum siding on your house or garb yourself in polyester, the only possible reason is that you don’t want people to think you’re a Bubba.

Schor’s right–it is depressing when people get into the grip of an all-engulfing need to establish their identity by buying stuff, especially if it’s stuff they can’t afford. It is also the case that newspapers, magazines, radio, and television are so financially dependent on consumer advertising that they’re unlikely to lead the charge against this problem.

Still, the solution Schor proposes seems almost as forced and obsessive as overspending itself. Why can’t buying things be a pleasurable sideshow to the main events of life? Why does it have to screw everything else up?

Let me propose another reference group that the culturati might glorify in the (perhaps vain) hope of curbing spending-mania: happily functioning people. Membership in this group would be defined in a possession-neutral way. A person would belong by virtue of doing something she loved and believed in, and by being enmeshed in a web of community, family, and friends. A self-appraisal (and remember, the entire purpose of a reference group is to serve as a yardstick for self-appraisal) would entail evaluating the richness of relationships and the satisfactions of accomplishments, rather than the cataloging of possessions. Buying a new tie would be fun, not an obsessive, central, tail-wagging-the-dog-of-life activity. If you can afford it, great. If not, no big deal.

It would also have been nice to see Schor wrestle with the contradiction between her point and the Keynesian tradition of treating higher incomes and more spending as the royal road to the good society. Ever since the 1930s, American liberal economists have celebrated consumerism–not because they find it culturally attractive, but because it offers the promise of marrying the cherished liberal goal of income redistribution to overall economic prosperity. Put money in ordinary people’s pockets, and as they spend it the assembly lines will hum and unemployment will fall.

This is the economic school to which Schor belongs. She has a brief epilogue in which she admits that her anti-consumerism conflicts with it but does it in a way that demonstrates that she hasn’t resolved the problem. “I have always believed there is great merit in the Keynesian view,” she says stiffly, and then goes on to admit that downshifting might cause a slowdown in productivity growth–which, from an economist’s point of view, is pretty close to the ultimate horror. A great book on her subject, rather than a good one, might have found a way to propose an economic ideal that would not lead as inexorably into a social nightmare as Schor’s seems to.