What Is Consumerism?

Consumerism is the theory that states a country that consumes goods and services in large quantities will be better off economically. Sometimes, consumerism is referred to as a policy that promotes greed since it often promotes buying the latest and newest products.

Understanding Consumerism

Consumerism is driven by consumer spending, which can include buying cars, iPhones, and homes. Consumer spending is the driver behind over 60% of the economic growth in the U.S.

As consumers spend, businesses benefit from increased sales, revenue, and profit. Companies, in turn, also spend money on manufacturing, computers, trucks, and hiring workers to satisfy the consumer demand for their products. The ancillary industries that supply businesses and consumers also do well. For example, if car sales are increasing, auto manufacturers will see a boost in profits. However, the companies that make the steel, tires, and upholstery for cars also see increased sales. In other words, consumerism can lead to benefits for the consumer but also the economy as a whole.

Over-consumption and excess are also attributed to consumerism. For example, some people might argue that the Christmas holiday is a time of heightened consumerism, due to the large amounts of goods that are purchased during this time. At its core, consumerism postulates that the more materials acquired, the better.

Key Takeaways

  • Consumerism is the theory that states a country that consumes goods and services in large quantities will be better off economically.
  • As consumers spend, businesses benefit from increased sales, revenue, and profit.
  • Consumer spending can drive an economy forward and lead to an increased production of goods and services and economic growth.
  • However, excessive consumerism can lead to an increase in household debt and widespread credit card usage.

Consumerism and Protection

Consumerism is also credited with a movement towards consumer protection that promotes improvement in safety standards and truthful packaging and advertisement. Consumerism also seeks to enforce laws against unfair trade practices and truthful product guarantees. 

History of Consumerism

How and why consumerism emerged has been debated for over a century. The consumer society emerged in the late seventeenth century and intensified throughout the eighteenth century. Many attribute the change to a growing middle-class that embraced new ideas about luxury consumption and the growing importance of fashion as a motivator for purchasing rather than necessity. Others argue that consumerism was a political and economic necessity for the reproduction of capitalist competition for markets and profits. Still, others point to rapid increases in technological productivity combined with a rising consumer culture that was based on consumer products, homeownership, and debt.

The Industrial Revolution

The industrial revolution dramatically increased the availability of consumer goods leading to the advent of the department store, which represented a paradigm shift in the consumer experience. For the first time, customers could buy an astonishing variety of goods, all in one place, and shopping became a popular leisure activity.

Post World War II

Consumerism accelerated after World War II as the U.S. economy grew rapidly in part, due to the manufacturing and spending on the war effort. Following the war, the economy was drastically different post-1945 than it was years earlier during the depression. Americans moved from the cities to the suburbs and bought homes. As a result, automobile purchases skyrocketed. Homeowners also bought items needed for the home, including appliances, washing machines, televisions, and refrigerators. Consumerism continued throughout the latter half of the 20th century. Eventually, and to this day, consumer spending represents over two-thirds of the economic growth in the U.S. economy.

Advertising and Consumerism

Advertising also played a major role in the emergence of a consumerist society, as goods were marketed through various platforms in nearly all aspects of life, advocating that the viewer's life was in need of some product. Over the years, advertising changed with the evolving sophistication of consumer attitudes and tastes. Advertising media evolved as well as marketers tried to stay in touch with audiences' constantly changing sensibilities and preferences. For example, billboards were created around the time that the automobile became prevalent in society to provide viewers with little details about a brand or a "catchphrase" that a driver could spot, recognize, and remember.

Consumerism in the 21st Century

In the 21st century, the focus of advertising is on technology and digitization of culture. In this new paradigm, consumer data and individual personal preferences have become increasingly available and actionable for marketers. Consumers continue to strive for newer and better "stuff" as Americans rush for the latest iPhone or technological gadget. Instead of department stores, as was the case for many years, consumers can now shop online and have their goods delivered right to their front door.


  • Consumerism leads to more spending and a better standard of living

  • Consumerism drives economic growth through spending

  • Companies earn more revenue, invest, and expand to keep up with demand


  • Consumerism can lead to excess spending and higher household debt.

  • Consumerism can drive up credit card usage for those who don't have the income to support it

  • Consumerism can exacerbate the income inequality that exists between the haves and have-nots

Advantages of Consumerism

Advocates of consumerism point to how consumer spending can drive an economy forward and lead to an increased production of goods and services. As a result, a rise in GDP growth or Gross Domestic Product can occur. GDP is a measure of the total output or production of goods and services in an economy. In the U.S., signs of healthy consumer demand can found in consumer confidence indicators, industrial production (or what companies produce), and personal consumption.

The standard of living can increase as workers have stable jobs and spend on items that make their life more enjoyable. Employment improves leading to job growth and workers enjoying an ample supply of new job opportunities. As a result, wage growth might also occur as companies vie for workers by incentivizing them.

Disadvantages of Consumerism

Consumer spending can lead to excess and an increase in household debt. Consumers might become complacent about the economy and borrow on credit cards to satisfy their consumer demand.

Also, income inequality can often be exacerbated and made more present as some members of society benefit from consumerism through new and better jobs leading to increased purchases of consumer goods. On the other hand, those folks without the necessary skills or education to succeed can find themselves left behind creating resentment and stress.

Consumerism can also lead to excess spending by the wealthy, which might include multiple cars, boats, or homes. Some advocate that consumerism can lead to a materialistic society without values.

It could be debated that consumerism won't likely reach the surge in spending, as a percentage of the population, as was seen shortly after World War II. However, it's likely a steady dose of consumerism is here to stay in one form or another.