Will the changing consumer redefine capitalism?

Philip Kotler was God for us in business school, back in the mid-80s. Marketing was still kind of evolving, and Kotler’s postulation of fundamentals was lucid and engaging. But as marketing started to become more complex, and silo-ed, and kind of simplistically listicle, one heard less and less of the guru.

Which is why my interest was piqued when “the father of modern marketing” recently predicted that this current pandemic — a period of deprivation and anxiety — will usher new consumer attitudes and behaviours that will change the very nature of today’s capitalism.

Citizens, he said, will re-examine what they consume, how much they consume, and how all this is influenced by class issues and inequality. Citizens will be forced to re-examine all our current capitalist assumptions, and emerge from this terrible period with a new, more equitable form of capitalism. Kotler actually invoked economist Thorsten Veblen’s The Theory of the Leisure Class in which he was the first to write about “conspicuous consumption” that he saw as a malady taking people away from more meditative lifestyles, and exposed the modern day sickness of “status display”.

Kotler believes that the current pandemic will usher in an anti-consuming movement. He points to the emergence of at least five types of anti-consumerists.

First, a number of consumers are going to become life simplifiers, persons who want to eat less and buy less. They are starting to realise, and react to the clutter of “stuff ” in their lives. They will want to downsize their possessions, many of which lie around unused and unnecessary. Some life-simplifiers will become less interested in owning goods such as cars or even homes; and would prefer renting to buying and owning.

Second, another group will soon consist of de-growth activists who feel that too much time and effort today goes into consuming. Degrowth activists typically worry that consumption will outpace the carrying capacity of the earth. They desire conservation and reduction in our material needs.

The third group will consist of climate activists who will worry about the harm and risk that high buying consumers are doing to our planet through generating so much carbon footprints that pollute our air and water. Climate activists usually carry a strong respect for nature and science, and have genuine concerns about the future of our planet.

Fourth will be a group of sane food choosers who will have turned into vegetarians and vegans. They are upset with how the world is killing animals to get its food. Everyone, they feel, could eat well and nutritiously on a plant, vegetable and fruit diet.

Fifth are going to be the conservation activists who plead not to destroy existing goods but to reuse, repair, redecorate them or give them to needy people. Conservationists typically oppose any acts of planned obsolescence. They are hostile to the luxury goods industry. And label themselves as environmentalists and anti-globalists.

Capitalism is an economic system devoted to continuous and unending growth. It makes two assumptions: (1) people have an unlimited appetite for more and more goods and (2) the earth has unlimited resources to support unlimited growth. Both of these are now being questioned because of the pandemic and lockdowns that are taking a heavy toll of both lives and livelihoods. When the Covid-19 crisis is over, avers Kotler, capitalism will have moved to a new stage. Consumers will be more thoughtful about what they consume and how much they need to consume. More people will seek to achieve a better balance between work, family and leisure. Many will move from an addiction to materialism to sensing other paths to a good life. They will move to a newer and higher pedestal, that of post-consumerism.

In the 2008 financial crisis, it looked like the “roof ”— the finance system — had collapsed onto the main structure which, though it was damaged, stood relatively firm and we eventually rebuilt the roof. This time, by contrast, it is the foundation that is collapsing — because all economic life in a capitalist system is based on compelling people to go to work and spend their wages. Since we now have to compel them to stay away from work, and from all the places they usually spend their hardearned salaries at, it does not matter how strong the building itself is.

Methinks we are headed into “precarity capitalism” whose main trait is not growth or competitiveness but precariousness and instability, and its dominant form of inequality is not of income or wealth but of security and self-confidence. So there will be a small minority of consumers ensconced in a diminishing set of safe career paths, and a majority of consumers living in persistent anxiety over costs of health, housing, education and the prospect of vanishing jobs. Capitalism is surely metamorphosing to new contours.