Consumerism is the central part of our western economy, it keeps the wheels of industry turning and creates jobs. However, it is not limited to western countries. Through multinational companies and globalisation it is part of the global economy.
A Modern Industrial Global Economy
Watch the video (2:36min.) explaining the system of a modern industrial global economy.
- Do you think this is a good representation of the industrial world today? Why/why not?
- If not, what changes would you make to the diagram?
Multinational corporations grew in the 50s and spread abroad, e.g. oil corporations looking for more oil to supply the American market when the home supply was not sufficient. Globalisation became easier as technology and communication developed. In developing countries, it fostered economic growth and consumption, but also created problems, such as exploitation of local workers, poor distribution of the new wealth and environmental damage.
Rich and Poor
Even in the mid-20th century, in the period of booming economy, the distribution of wealth was uneven and did not wipe out poverty. In 1950, in the US, the bottom 1/5 received 4% of the total national income, while the top 1/5 received 43% and ten years later little had changed. (Boyer, P. S. 1999, Promises to Keep, The United States Since World War II, p. 117) Today the gap between rich and poor is widening and according to the Global Risk Report, World Economic Forum, severe income disparity is fourth on the list of global risks.
Remember Occupy Wall Street and other similar protests around the world in 2011? In the USA, the wealthiest 1% have 20% of the national income. The other 99% were protesting against the unfairness of such an economic system.
Globalisation is both positive and negative for the environment. Through depletion of resources, emissions from industrial production and transport, deforestation and increased consumption, it causes climate change, loss of habitat and extinction of many species. However, to tackle the challenges to our environment we need to work together across international boundaries.
We need sustainable development if we want the planet to continue supporting life. Though some, like the scientist, James Lovelock, think it is already too late to save our way of life.
And what about our feelings of happiness? There are several surveys which try to measure the general state of our happiness and which show that it is not necessarily material wealth, which improves our feeling of well-being and quality of life.
Try creating your own better life index with OECD Better Life Index. How does the quality of life in Norway fit with what you consider are the requirements for a better life?