Consumer economy

A consumer economy describes an economy driven by consumer spending as a percent of its gross domestic product, as opposed to the other major components of GDP (gross private domestic investment, government spending, and imports netted against exports).[1]

In the U.S., it is usually said by economists, including in Henry Hazlitt's "Economics in One Lesson"[2] that 70% of spending is consumer-based,[3][4] but this number is disputed by economists like Businessweek columnist Michael Mandel,.[5] Consumer spending in the US rose from about 62% of GDP in 1960, where it stayed until about 1981, and has since risen to 71% in 2013.[6]

Historical

England

The consumer revolution in England is generally understood to have been in the eighteenth century, although the concept of consumerism was perceived to have appeared in the late 1500s and 1600s.[7] Prior to this, the Middle Ages were understood to have been a time of perpetual material poverty, in which the concept of the commodity or the concept of the consumer did not exist. Maryanne Kowaleski argues against this view, arguing that medieval charity, instructional guidebooks, and population growth (paralled by that of currency), created a consumer economy in the pre-Great Famine era [8] Research by people like Britnell and Campbell suggest commercialization first appeared in the medieval period, and researchers like Christopher Woolgar have studied consumption practices in elite households.[8]

In their economy, they had many exotic items (because of the imperial conquests of the British Empire) and it created an environment for a desire-based mode of shopping that was pleasurable, not mundane.[9] Romantic literary critic Andrea K. Henderson argued that this influenced Romantic-era poetry because the poets were often part of an urban society. desiring things that could not be easily attained and were unavailable. This influenced their interpretation of things like the past, and the non-urban natural world, because they had to construct narratives to understand things that were unaccessible to them.[10]

United States

The US consumer economy in the 1920s included many leisure items and products that improved housework. They introduced advertising to sell goods and department stores were created. They introduced lines of credit and installment plans to consumers who could or would not buy things immediately.[11]

Modern

Many countries have a consumer economy.

According to Kevin O'Marah of Forbes magazine, Africa's consumer economies remained "buoyant" despite the worldwide collapse in the commodity industry, despite the fact that commodity extraction industries have long dominated the region.[12]

Some analysts, including an anonymous columnist at The Economist stated in 2014 and early 2015 that China was likely to become a consumer economy. [13][14][15]

See also

References

  1. ↑ Education 2020 Homeschool Console, section Vocabluarly of Unit on "Economic Boom of the 1920s", quote: "CONSUMER ECONOMY: Definition: An economy that depends on a large amount of spending by comsumers. - school login required, accessed December 1, 2009
  2. ↑ "The Importance of Consumer Spending | Chron.com". Smallbusiness.chron.com. 2010-07-19. Retrieved 2016-01-05.
  3. ↑ "US GDP is 70 Percent Personal Consumption: Inside the Numbers". Mic.com. 2012-09-21. Retrieved 2016-01-05.
  4. ↑ "What Is a Consumer Economy? (with pictures)". Wisegeek.com. 2015-12-15. Retrieved 2016-01-05.
  5. ↑ Mandel, Michael. "Consumer Spending is *Not* 70% of GDP". BusinessWeek.com. Retrieved 2016-01-05.
  6. ↑ "Personal Consumption Expenditures (PCE)/Gross Domestic Product (GDP)" FRED Graph, Federal Reserve Bank of St. Louis
  7. ↑ Pennell, Sara (1999). "Consumption and consumerism in early modern England". Historical Journal (42): 549–564.
  8. 1 2 Horrox, Rosemary; Ormrod, W. Mark (Aug 10, 2006). A Social History of England, 1200–1500. Cambridge: Cambridge University Press. p. 238. Retrieved 29 April 2016.
  9. ↑ "The Consumer-Based Economy". Web.utk.edu. Retrieved 2016-01-05.
  10. ↑ Henderson, Andrea K (2008). Romanticism and the Painful Pleasures of Modern Life. Cambridge: Cambridge University Press.
  11. ↑ "A Consumer Economy". Ushistory.org. Retrieved 2016-01-05.
  12. ↑ "Africa's Consumer Economy". Forbesm. Retrieved 2016-01-05.
  13. ↑ "China's economy: The world's second biggest consumer". The Economist. 2014-02-18. Retrieved 2016-01-05.
  14. ↑ "Consumers can drive China's transformation to a high-income economy with steady growth | Europe's World". Europesworld.org. 2015-02-02. Retrieved 2016-01-05.
  15. ↑ "China's Shift to a Consumption-Driven Economy". Cornell Current. 2014-11-12. Retrieved 2016-01-05.
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