The Consumption Conundrum
How can we tell if we have swung too far into the abyss of consumerism?
How can we tell if we have swung too far into the abyss of consumerism?
To start, consumption is a basic act. It’s a reward for productivity: add value, make money, consume. One’s consumption is strictly capped by one’s ability to add value (or someone else adding value and sharing their consumption-rights – like parents to children).
In macroeconomic models, the opportunity cost of consumption is leisure1; it is possible to simply not consume and maximize leisure. I find this to be overly academic and not particularly helpful in getting my point across, so for practical purposes, I’ll use “consumption” in a more literal sense — actually consuming goods, whether they be edible, watchable, readable, listenable, drinkable, feel-able, etc.
In determining if we are over-consuming, we should think about the costs of consumption. Environmental impact is an obvious one — plastic packaging, jet fuel, all that bad stuff that may jeopardize the long-term sustainability of the planet. This is quantifiable, but not easy to fix within a capitalistic system. Some degree of intervention through regulation is necessary.
Investment in technology is an alternative to consumption2. We cannot sustain ourselves in the immediate term purely on investment, though, so it makes sense to balance it with consumption.
In reading this last paragraph you likely assumed we were talking about financial investment. While money is obviously a core component of our societal structure, we should also look at time as an instrument of investment.
When we create value through technology, we are ultimately saving time. When we use fire to cook food, use power tools to build a home and use the Internet to communicate, we are achieving outcomes using fewer person-hours. What will we do with the time we save?
Well, lots of things. We work more and create even more value; we increase leisure time with friends and family; we meditate and think; we eat cookies and watch Netflix, slightly deteriorating.
My gut feeling is that we do too much of this last category (Netflix), which I’ll refer to as zero-investment consumption (ZIC, for short). ZIC is defined as consumption that does not improve the consumer or the world. Given the infinite complexity of determining whether or not a given act is ZIC, we’ll have to use some proxy. I propose the following question:
“Is the act destructive and/or is the act not leaving the consumer better off in any way?”
This question is a mouthful of rusty nickels, so here’s a visual:
The unfortunate reality we live in is that we definitely have lots of ZIC, and because of this, we misallocate lots of brainpower. A physics PhD might take an extremely well-paying job writing Netflix recommendation algorithms instead of working on renewable energy…because lots of us watch more Netflix than we should. It’s easy to watch one more episode (or rather, binge-watch one more series), and there isn’t a strong enough incentive to make us spend the marginal 30 minutes in a more productive fashion.
I believe by reducing excess ZIC in our day to day lives, we will operate closer to the impossible to define, but still worth striving for, efficient mix of consumption, investment and leisure. Over time, we may even see that the invisible forces of free markets redirect our capital at the macro level – nudging that physics PhD to work on nuclear instead of television.
But it will take honesty, reflection and a willingness to make ourselves slightly less comfortable — a modest price.
Reflection & Clarification
I got pushback from an early draft of this essay, which made me realize the whole perspective sounds super cynical and shamey. That wasn’t the intent at all, so here are some thoughts on said pushback, which I’ve structured into two buckets.
(1) Not all fun things are ZIC, and you shouldn’t feel ashamed for leisure.
Here’s where I land on the self-shaming or guilt about marginal ZIC-yiness: friends, sleep, laughter, sex, appreciating nature, getting a sweat going...all these things are necessary to maximize your productivity as a contributor of value to society. Thus, a lot of what can be described as “leisure” is not ZIC because it does in fact leave you better off mentally, physically, spiritually, etc.
Often, these pursuits spark innovation. The classic example in the tech world is how many successful entrepreneurs read a bunch of sci-fi when they were kids.
(2) No, we don’t want top-down enforcement of what people should do with their free time.
Consumption patterns and behaviors are extremely difficult, if not impossible, to predict given our complex psychologies. There’s an argument to be made that such patterns are effectively people voting with their time – I would say this is consistent with the free markets line of thinking.
Let’s put the Facebook- and Netflix-esque psychological manipulation aside for a moment and assume the above is true. In that case, allocating talent and energy in the direction of where people are voting is probably a good thing. So it’s not bad that really smart people are working at Netflix because their talent translates to the masses enjoying their lives more.
This is naive, though, because we know consumer technology can be manipulative. Not to mention, what people “vote” for is not a good proxy for what is actually good for humanity and the planet, since living people will die within the next hundred years while the contribution of research and development (made possible by investment in technology) far outlives people.
Then again – assuming capitalism isn’t going away anytime soon – leveraging consumption is a necessary step to generate investment. A good example of this is the symbiosis between internet, mobile and microprocessor companies. Due to the gargantuan demand for video, audio, games and social media, the private market is heavily incentivized to improve the design and efficiency of microprocessors, which will have spillover benefits into just about every industry and scientific discipline (everything uses computers!). In other words, people voted with their time and wallets to have ever-better technology that will broadly leave us better off.
To what extent does this symbiosis happen in other industries? It’s a hard question. Few examples work as elegantly as the computer software+hardware one. But much like our consumption patterns tend to be emergent, so is innovation.
My best explanation: given a budget constraint, which can be modeled based on one's earnings potential, one chooses the optimal point of consumption (which requires more budget) and the rest is "spent" on leisure.
Technology meaning things that will ultimately boost human productivity, not literal retail tech sector investing. Think quantum field theory, not GME, AMC, et al.