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AB 2000 studies

Alain Boublil Blog

 

The end of the consumer society ?

Is the succession of crisis which are affecting the world going to generate an irreversible economic and social mutation and to transform the development model of the countries? The Covid-19 pandemic, the war in Ukraine and the geopolitical tensions it has involved to which must be added the taking into consideration of the climate risk which is generalizing cannot remain without lasting consequences, even if one day, sooner or later, the effects of that pandemic will be completely controlled and the peace will have  been restored in Ukraine. Growth during the 20th century has, before everything, been provided by household consumption. Production capacities of goods and services have been increased by investments dedicated to satisfy that demand. The China exceptional expansion since the 1979 reforms, has not only been the consequence of the de-localization of western enterprises which have contributed to make the country the “world plant”. It has also been supported by the level of life increase which has allowed the development of household consumption. The project of the Chinese authorities is even to rebalance this model through giving an even higher share to this demand constituent. The current slowing, despite a strong growth of the exports, shows that this result is far from being acquired.

In France we see a stagnation of the consumption of goods for ten years, when to the opposite of Germany and Italy, the demographic context would constitute a support. It had stagnated between 2011 and 2016, then rebounded until 2019 with a 8% increase in four years. The brutal fluctuations observed in 2020 and 2021 are not significant because they result from lockdown measures and from their progressive softening followed by a catching up period. But since the beginning of the year, the diminution is real and household consumption in goods fell back to the 2012 level in real terms. Similar evolutions could be observed in the other European countries. Four factors have contributed to it and the central issue is to know if these ones are transitory and will disappear when the condition to a normal economic and political environment will be satisfied or if, to the contrary, we are in front of a durable transformation of the society.

The first of these factors is the anxiety about the future. The household confidence index in France is at its lowest and has found again the level reached during the 2008 crisis. That has been translated, despite the end of the pandemic, by the persistence of a financial saving rate above 4% in 2022 after the record of 7.7% of the gross available revenue in 2021. The accumulation of cash on bank and saving accounts has occurred to the detriment of consumption. This anxiety, after the end of the pandemic, results from the international environment and from the tensions which have provoked the return of inflation to a level never observed for 40 years in the Western countries. Only China, among the major economies, seems to have been protected from that prices increase wave until now.

The household attitude has been a paradox. Facing that prospect of a continuous prices increase, it would have been in their interest to anticipate the purchase of their goods but they abstained themselves, preferring to put their excess liquidities on accounts whose return was very inferior to the inflation rate. They were double losers. The only exception has been relative to gasoline during the refineries stroke. But in rushing to the stations, they made the penury worse.

The reduction of the purchase of some goods has also been the consequence of the supply growing scarcity.  Geopolitical tensions, especially with China, have provoked a breakdown of some supply chains in several sectors, including the car industry and the production of pieces necessary for digital products like tablets and smartphones. The electronic components scarcity, following the American decisions and the complex relations between Taiwan and Beijing has generated delivery postponements and unusual delays imposed to consumers, which explain the fall observed in most of the Western countries and even in China.  

To these purely economic circumstances has been added, amplified by the medias, the taking into conscience of the climate urgency. The multiplication of natural catastrophes for a year, fires as a consequence of drought in France, in California and in Australia, and exceptional floods as in Pakistan, has made believing, truly or wrongly, to a large share of the world population that they were responsible of these disorders and that the only way to avoid they multiply and they become heavier was to change their behavior through a lower and a better consumption. We went so into the sobriety culture.

That was not only about energy, even if this sector would be a priority, both regarding volumes and the production modes. The goods choice must now be less dictated by its price than by the virtues attached to its fabrication, its low energy consumption and its proximity with the final user. Regarding industrial equipment, their utilization duration and their capacity to be recycled become undisputable selling arguments. New markets, in clothes and in furniture for instance, are emerging and we do not count the number of platforms, on internet, which offer second hand products. We will so consume the same quantity but with goods which will last longer and not necessarily with the same user, which will weight every year on the volume to be produced.

The behaviors evolution will also affect services and especially these linked to travels. The several lockdowns have made taking into consideration that working, for the office jobs, could be partly done at home and that the visio-conferences allowed to saving a lot of time and of money. Concerns regarding environment will forcefully affect long trips, whatever they are for a professional or a private motive. Personal vehicles and planes use will resent and the growth of these sectors will be affected.

But the deepest change will be about the place of goods and services consumption in the social status. Personal success had, in the past, to be visible and that visibility was depending on a vehicle, it is still the case in China, on the possession of objects or clothes daily used or on trips toward famous tourist destinations. It is not at all sure that in the future, the next generation will adopt these behaviors and the life models which accompany them. Current excesses of some ecologist militants do not convince anyone and give rise to reproof. But the vision of the world and of the society they are inspired by, largely encouraged by a part of the political class in the different countries and by the medias, will progressively evolute toward the generalization of new behaviors, all of them going into the same direction.

Growth, and the prosperity which resulted from it, even if it was in very various shared, have been based on consumption which was answering to the expressed needs. Even if an important part of these needs, especially in the countries which have not reached the same wealth level than in the developed countries, remains to be satisfied, this economic model would progressively become obsolete. Only the States which will have understood this essential mutation and which will have known how to adapt their production apparel and their welfare system to the new aspirations of their societies, will be able to go through this transition with success.              

 

    

 

 

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