During the last eight years, the Bush administration has levied deficit feeding tax cuts and urged Americans to spend our way out of this economic slump. Can consumers really pull us out of what is now a full-fledged recession by spending?
Economists like Boston College professor Dr. Juliet Schor say no.
“The economic crisis wasn’t caused by a decline in consumer spending,” writes Dr. Schor on her New American Dream blog. “It was triggered by the bursting of the housing bubble, Wall Street excesses, and some other factors. Consumers are cutting back now, but the decline in spending is one of a series of falling dominos—more an effect of recession than a cause.”
The answer to the world’s economic woes certainly isn’t to spend more, consume more, waste more, say Schor and a number of other experts. With unemployment rates rising, investment accounts plummeting, and the housing crisis deepening, consumers simply “can’t afford to be the engine of growth,” says Schor. And the world simply can’t afford to have the West consuming resources at current catastrophic levels.
What the US needs is a widespread value shift to thrift. During the most recent decades, thrift has been generally considered a quaint, antiquated concept—something . parents and grandparents who grew up during the Great Depression practiced but something no longer necessary.
It’s now becoming clear that citizens in developed nations must spend less—to shrink our skyrocketing personal debt so we’ll have enough to support ourselves during retirement; to save endangered, precious resources; to bring down our collective energy use and lower our carbon emissions enough to avert a horrific climate crisis.
“In the very short run, it’ll temporarily help the economy if people spend like there’s no tomorrow. But that will just create problems down the road,” says Dr. Ronald T. Wilcox, professor of economics at the University of Virginia and author of Whatever Happened to Thrift? (Yale University Press, 2008). “For example, if the Baby Boomers do not have the kinds of savings they need to finance a reasonable retirement, you’ll see a contraction in consumption that will undercut economic growth anyway. [A shift to thrift] creates a platform where you can get stable, reasonable consumption going forward.”
What is “stable, reasonable consumption?” Schor puts . it bluntly: “The usual kinds of consumer spending (cars, electronics, furniture, apparel, travel) degrade vital eco-. systems and have an economic cost. Business-as-usual puts us deeper into an economic hole, because every dollar of [Gross National Product] creates new and unacceptable damage to the planet.”
If the pressing need to limit our consumption as a country sounds like it will usher in a period of misery and sacrifice, think again. “You don’t need as much consumption [as many Americans . enjoy today] to have a healthy economy and keep people employed,” says Wilcox. “What you might get is an economy where people took a little more free time and worked a little less. And most psychologists say people would be happier about that.”
The Thrifty Life is the Good Life
Back in 2006, ten friends in San Francisco—including Green America member Shawn Rosenmoss—were having a dinner party, when the conversation turned to “the landfill problem” and how they could go beyond recycling. In a spirit of fun, friendly competition, someone in the group threw out a challenge: Could they all go for a year without buying anything new?
Well, anything besides absolute necessities like food, health and safety items, and things that would be “creepy” to get used, like underwear?
And perhaps the bigger, although unspoken question at the time was: Could they be happy doing it?
The answer to both questions was they could, and they did. Their agreement, called “the Compact,” was that they would try to get what they needed or wanted only by bartering, buying used, or finding it through luck or the generosity of others. “It’s been really empowering,” says Rachel Kesel, one of the original ten who now attends graduate school in London. “The farther away I get from being that 25-year-old who used to have excess money in her pocket and go out and buy something with it, the more I realize how easy it is not to shop.”
Saving for What ’s Important
Both Kesel and Rosenmoss stress that none of the Compacters are wealthy by any stretch of the imagination. Most of them are teachers or nonprofit workers. Rosenmoss works for the San Francisco Department of the Environment, and Kesel . started out the Compact as the owner of a dog-walking. business and a freelance writer.
Rosenmoss says that though she’s always been frugal, having grown up with Depression-era grandparents who taught her the value of thrift, taking it to the level of the Compact was a more rewarding experience than she would have imagined.
“We didn’t seek publicity, but our story kind of caught on, and everyone who interviewed us was focused on the not shopping part,” she says. “A lot of people wanted to portray us as these grim, joyless environmentalists, but we got so much out of it. We have more time for our kids and to do things that are important to us. We go to concerts, and my kids . take music lessons. We have more money to give away to charities, and that’s very important to us. The Compact is about so much more than not going shopping.”
Kesel agrees that spending less has allowed her to direct her money toward real priorities. With the money she saved by Compacting, she was able to move to London to work on a Master’s degree in conservation.
Both women also agree that spending less helps them connect more with others, as well. The original Compact caught on so well, a YahooGroups listserv they started now has over 10,000 members who are all trying to live well without buying new. In addition, Rosenmoss and Kesel say the Compact has fostered stronger in-person connections at home, too.
“We borrowed stuff more often from each other,” says Rosenmoss. “A lot of people don’t like to ask for help. It’s the American way—we’re very pull-ourselves-up-by-our-bootstraps. But we build community when I ask to borrow your Roto-Rooter, or you come over and get my giant monkey wrench. We’re not being needy, but saying, ‘I need you in my life.’”
“[Telling people you’re part of the Compact] puts your needs into a larger social context,” adds Kesel. “People start to look out for you, and if they see something you need, they let you know.”
For example, when a couple Kesel knew was cleaning out their house in preparation for a move, they invited Kesel to come over and take whatever she wanted from the pile at her convenience, instead of tossing their unwanted items.
It’s Easier Than You Think
Both women acknowledge that the Compact has its challenges. Kesel, an avid cyclist, confesses to occasionally feeling the urge to buy a new piece of outdoor equipment. In fact, she recently splurged on a new pair of cycling gloves.
“It’s cold here, so I didn’t want to wait to get them while I searched for them used. They also help the tendonitis in my arm,” she says, then pauses for a moment. “But you know what? I don’t have to rationalize that purchase. No one’s going to kick me out of the Compact! It’s really important to loosen up sometimes and not trip out over things.”
Although their year of Compacting was officially up at the end of 2007, most of the original ten are still adhering to their initial agreement—and competitiveness has given way to genuine enjoyment of the new lifestyles they’ve fostered.
Kesel attributes their willingness to continue to the fact that “compacting is way easier than you think it is.” And Rosenmoss adds that challenging yourself to find what you need used is often fun.
“We’re not strange or weird, freaky hippies—we’re very average people, and anyone can do this,” says Kesel.
Both women admit they have the same needs and spending impulses as anyone else living in the US. All they did was form a community of support to help themselves downshift.
“It doesn’t have to be grim,” says Rosenmoss. “It’s not a sacrifice, because you get so much back.”
Retirement and Resources for All
Although it may not be likely that the entire country will . embrace buying nothing new, ever, we as a nation could help solve our economic crisis, at least in part, by embracing a spirit of thrift and mindful consumption.
Schor underscores that there are opportunities for spending in the new green economy. “But they are for purchases that enhance and regenerate the planet and its people, such as buying from local food systems, hiring the unemployed to provide services (especially green ones), and supporting . nonprofits that are solving, rather than creating problems.”
The added benefit of a shift to thrift is that it would lift Americans out of debt. “Saving more and consuming less creates a platform where you can get a stable economy going forward,” says Wilcox, instead of the wild fluctuations the current US economy has been experiencing.
And perhaps, say Kesel and Rosenmoss, in the end, we’d have more free time, feel more connected, and waste less— so everyone, everywhere, could finally have enough.