chapter 11 consumption to develop an historical overview of consumption and consumerism to summarize...
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Chapter 11 Consumption
• To develop an historical overview of consumption and consumerism
• To summarize sociological, neoclassical, and Marxist views of consumption
• To analyze geographies of consumption at multiple scales
• To note the environmental impacts of mass consumption
Chapter 1 – Another version of this model
The Circular Flow in the Capitalist System (set in space and time)
(sales)ResourceMarket(prices)
(consumption - resources)Businesses & Government(production)
(sales)ProductMarket(prices)
(production - labor)Households(consumption)
Goods &Services
$ to pay for consumption$ from product market
Goods &Services
Goods& Services Labor
Income from work
Savings &Investment:Capital Markets
Public Goods: Taxation & Provision
Broad Trends in GDPWithin investment, shares of residential and nonresidential
have been constant (roughly 30% and 70%)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.81
95
0
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
06
Sh
are
of
To
tal
PersonalConsumptionExpenditures
Gross PrivateDomesticInvestment
Governmentconsumptionexpenditures
Exports
Imports
But There Have Been Radically Changing Composition of Nonresidential Investment –
And it is all about the New Economy
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.919
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Sh
are
of
No
nre
sid
en
tia
l In
ve
stm
en
t
Structures
Equipment andsoftware
Changes in the Composition of Investment in Equipment and Software
0
0.1
0.2
0.3
0.4
0.5
0.6
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Sh
are
of
To
tal
Information processingequipment and software
Industrial equipment
Transportationequipment
Other equipment
Change driven in largemeasure by structuralchange in production
Changing Patterns of Consumption
0
0.05
0.1
0.15
0.2
0.25
0.3
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Sh
are
of
PC
E
Food and tobacco
Clothing, accessories,jewelry & personal care
Housing & householdoperation
Medical care
Transportation
Recreation
Education, research,personal business, religiousand welfare activities
0
10000
20000
30000
40000
50000
60000
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
Co
ns
tan
t $
Mill
ion
s 1
98
2-1
98
4=
10
0Admissions to SpectatorAmusement
Radio & TV Repair
Clubs, Fraternal,Recreation Programs
Commerical ParticipantAmusement
Pari-mutual returns,Lotteries
Pets, veterinarians
Cable television & ISP
Film Development,Photofinishing,Videocassette Rental
Other CommericalAmusement
BEARecreationAccountComponents1960-2005
Consumer Media SpendingEstimated to be 40% of yearly hours in 2005, rising from
$608 to $1024 per capita between 2000 and 2009
0
50
100
150
200
250
300
3502
00
0
20
02
20
03
20
04
20
05
e
20
06
e
20
07
e
20
08
3
20
09
e
Co
ns
um
er
Sp
en
din
g P
er
Ca
pit
a P
er
Ye
ar
Television
Broadcast and satelliteradio
Box Office`
Home video
Interactive TV & wirelesscontent
Recorded music
Videogames
Consumer internet
Daily Newspapers
Consumer books
Consumer Magazines
Shifts in the Composition of the Recreation Account
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
Sh
are
of
Re
cre
ati
on
Ac
co
un
tAdmissions to SpectatorAmusement
Radio & TV Repair
Clubs, Fraternal,Recreation Programs
Commerical ParticipantAmusement
Pari-mutual returns,Lotteries
Pets, veterinarians
Cable television & ISP
Film Development,Photofinishing,Videocassette Rental
Other CommericalAmusement
Flat
Flat
Up, then down
Up then down
Changing Shares of Spectator Amusements Spending
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Sh
are
of
Ad
mis
sio
ns
Motion PictureTheatres
LegitimateTheatres, Opera,and other Non-Profits
Spectator Sports
Changes in Share of Spending on Commercial Participant Amusements
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
Sh
are
of
Co
mm
erc
ial P
art
icip
ant
Am
us
em
en
ts
Sightseeing & PrivateFlying
Bowling and Billiards
Casino Gambling
Other CommercialParticipantAmusements
Gambling (not Casino Hotels)
Casino Hotels
Historical Context of Consumption
• The rise of consumption as incomes rose-the shift from self production to market purchases related to the changing division of labor
• Structural change (earlier diagram)
• Change in social behavior (diagrams on household travel in Chapter 9)
• Fueling consumption with credit
The falling savings rate
Much lower than most developed nations; investment supported by capital flows into U.S. related to our huge trade deficit. Is the fall of the $ going to challenge this pattern?
Theoretical Perspectives on Consumption
• Sociological views – differentiation of spending by income class; behavioral responses to advertising; impacts on households, and other forms of social activity
• Neoclassical economic views – utility theory, homo economicus, critiques of this kind of calculus—can you explain your spending by this model?
• Marxist views – goods and services not just as things, but the product of labor that is in turn differentiated by class, exploited by capitalists to extract surplus value that could have been spent on goods and services
Geographies of Consumption
• Several approaches undertaken by geographers
• Consumption, the body and individual experience
• Shopping spaces as places with “meaning”, documenting the nature of social relations in these places
• The commodity chain approach, often viewed in the context of globalization
We could developthis model foralmost any kind of commodity
Analogues in theservice economy?
Environmental Dimensions of Consumption
• Environmental impacts of production, distribution, consumption, and post-consumption
• Unequal impact on the globe of production and consumption processes (Figure 11.8)
• How to restructure these relationships, such as the measures of global footprints? (Figures 11.9 and 11.10)
Implicit Environmental Impacts of Imbalances in Production and Consumption
Ecological Footprints
A cool cartogram! But, what is it really showing?
Summary• Consumption dominates GDP in most countries,
but geographies of it are relatively understudied• Economic models of consumption are too
simple, but alternatives are equally difficult to document
• Active research on commodity chains is helping to trace ecological footprints, and define more sustainable production systems (e.g the work I just reviewed for Sustainable Seattle)
• How to measure environmental impacts of consumption, and design production & consumption systems with lower environmental impacts—in many ways the challenge posed by global warming