Hon’ble Prime Minister Sh Manmohan Singh’s appeal to the corporate to go slow on top management salary has taken people by surprise. After all, sixteen years back the same man in the avatar of the Finance Minister of the economically metamorphosing India had not only introduced, but had encouraged the concept of consumerism.
Although a belated attempt to separate conspicuous consumption from ordinary consumption or rather luxury from necessity, PM’s speech left little doubt of the Govt’s concern on the widening gap between the rich and the poor. It is no doubt a matter of grave concern that India today boasts of 36 billionaires as compared to Japan’s 24 whose economy is 7 times larger than that of India. The Indian press as usual went bonkers over this fact as if India had achieved 36 Gold medals in Olympics. However a man of the PM’s sensibility must surely have realized the consequence of this fact when almost 80 % of the population is surviving on less than $2 a day. No doubt the PM’s appeal was meant to curb the ostentatious show of wealth by the lucky few in a country where the majority’s main concern is getting the next meal. However the other facets of an economy based on conspicuous consumption do not bode well either.
Coined as a term by Thorstein Veblen in 1899, conspicuous consumption has been around for ages when wealthy people have spend lavishly on goods and services to maintain a degree of social Status. Consumption however started becoming more conspicuous after the Second Industrial Revolution and attained enormous proportions only after the Great Depression and the Second World War when the US was forced to kick-start a depressed economy by deficit financing thereby introducing excess liquidity into the system. Subsequently easy credit and the introduction of credit cards further encouraged ordinary people to buy things that would otherwise be termed luxuries. Such is the dependency of the US on consumption that the first speech given by President George Bush after 9/11 was a plea to the Americans to go to the malls and start spending and spending fast. If after 9/11, the Americans had chosen to go on mourning for another few days without their famous wasteful consumption, their economy would have, in all probability, gone into a deep recession.
Soviet Union, based on the communist principles of Marxism, opposed conspicuous consumption, however it could not contain the man’s inherent nature of using wealth to drive home his social status. This latent urge had after all goaded the Egyptians to build giant pyramids, Moguls to make the Taj Mahal and the Europeans those eye-popping cathedrals. By denying this very primal human instinct to it’s populace, the Soviet Union fell into decadence and finally collapsed in late eighties. This prompted even an avowed communist country like China to encourage consumption and it did this with success and élan. Today the very symbols of conspicuous consumption like Mercedes, Gucci, Rolex etc. are happily discovering voracious appetite for their products in China.
Derided by almost all the mainstream religions in India such as Hinduism (Sects like Bisnois in particular), Buddhism, Jainism and even Sikhism as well as certain sects of Christianity like the Amish, conspicuous consumption has been finding acceptance in the world desperate to create apparent wealth and give citizens higher living standards. Pride and envy, the two elements that drive conspicuous consumption are also responsible for evolving consumption and making the lives simpler by helping extract and use resources more efficiently. 150 years back humans discovered the art of propagation to coerce people to buy products or services they would otherwise have not required and thus was born advertising. Today this tool to promote mass consumption has become an industry in itself accounting for almost 1 % of the global GDP. Fashion, entertainment and tourism are other bye products of mass consumption.
However, conspicuous consumption is extremely wasteful especially now when man has better expertise in extracting resources more efficiently. Economies based on consumption would have been a good idea if our planet had endless resources and the capacity to absorb the waste thus generated. Sadly the planet has only so much to offer in resources and our wasteful consumption is not helping any. India started opening up its economy when the awareness of Carbon emission and global warming was there. One wish there was some out of the box thinking and these issues were dealt with before we headed in this direction. After all, the economic model we are moving on would mean that by 2025 India would be having at least 500 million cars on it’s road, 20 times more airplanes to ferry it’s now affluent and demanding citizens and at least 50 times more electricity generating capacity…not to talk about all the electronic gadgets, food, clothing, foot wears etc. that would wastefully be consumed by 1.4 billion Indians with a per capita income of Rs 3,00,000/ per annum…. an economist’s dream but a conservationist’
The West has already started feeling the heat literally when 20,000 elderly French died of exceptional heat wave in 2003. Europe faces floods in regions, which had never dreamt of one before. America has witnessed its impotence in the face of hurricane Katrina. This January New York saw warmer minimum temperatures than the prevailing maximum temperatures in New Delhi. The word tsunami, which till now had been tucked away in the end pages of the Mariners Handbook, has become part of a daily lexicon. In India people are being relocated regularly as the sea invades inwards… result of the melting polar ice.
There is a huge concern bordering on panic and in the coming 4-5 years people in developed countries would force their governments to take very strict measures to control emissions globally. Even today trading in carbon credits have become the norm of the day in the West but the one tonne allowance that it allocates every person today would in coming years seem like an expensive luxury when even an ounce of undesired emission would be seen to hurt the planet further. The measures to check and reverse global warming would hurt all the nations but more so India, which has just started on this path and has some way to go before it could dwell on these economically strangulating measures with some degree of strength.
The Genie’s out of the bottle and now even the Indians have tasted the perpetual state of discontent amidst plenty and a need to have things that are bigger and better. The choice till now was between prosperity and possible climate change and the governments of developing economies obviously chose the former. However it is increasingly becoming a choice between prosperity and survival and scales are tilting against the present economic models. Indians have the right to be as wasteful as their Western counterparts are or have been in the past, but it would be more prudent to resist the temptations and save the planet and humanity.
So is there any substitute to mass consumption in an economic build up? India has tried walking the fine line with controlled markets for forty years and it helped only to create an almost stagnant economy and maintain the level of poverty. At least the current approach is giving results, though for how long and at what future costs, one never knows. Exceptionally innovative line of thought and actions are required to cope with global warming yet continue on this growth trajectory. In any adversity there is an opportunity. And if India does find that fine balance, there would be no stopping this juggernaut. The 21st Century would be well truly ours.
H.S.Anand
CEO/president of Mariners Welfare Society
