Transcript Chapter 11 Consumption

Chapter 11 Consumption
• To develop an historical overview of
consumption and consumerism
• To summarize sociological, neoclassical,
and Marxist views of consumption
• To analyze geographies of consumption at
multiple scales
• To note the environmental impacts of
mass consumption
Chapter 1 – Another version of this model
The Circular Flow in the Capitalist
System (set in space and time)
Goods
& Services
(consumption - resources)
Businesses & Government
(production)
Goods &
Services
$ from product market
(sales)
Resource
Market
(prices)
Income from work
Labor
(production - labor)
Households
(consumption)
Savings &
Investment:
Capital Markets
(sales)
Product
Market
(prices)
Goods &
Services
$ to pay for consumption
Public Goods: Taxation & Provision
Broad Trends in GDP
Within investment, shares of residential and nonresidential
have been constant (roughly 30% and 70%)
0.8
Personal
Consumption
Expenditures
Gross Private
Domestic
Investment
Government
consumption
expenditures
Exports
0.7
0.5
0.4
0.3
0.2
0.1
Imports
2006
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
0
1950
Share of Total
0.6
But There Have Been Radically Changing
Composition of Nonresidential Investment –
And it is all about the New Economy
0.8
0.7
0.6
Structures
0.5
Equipment and
software
0.4
0.3
0.2
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
0.1
1990
Share of Nonresidential Investment
0.9
Changes in the Composition of
Investment in Equipment and Software
0.6
Information processing
equipment and software
Industrial equipment
0.4
0.3
Transportation
equipment
Other equipment
0.2
0.1
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
0
1990
Share of Total
0.5
Change driven in large
measure by structural
change in production
Changing Patterns of Consumption
0.3
Food and tobacco
0.25
Clothing, accessories,
jewelry & personal care
Housing & household
operation
Share of PCE
0.2
Medical care
0.15
Transportation
0.1
Recreation
0.05
Education, research,
personal business, religious
and welfare activities
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Admissions to Spectator
Amusement
60000
Radio & TV Repair
Clubs, Fraternal,
Recreation Programs
40000
Commerical Participant
Amusement
30000
Pari-mutual returns,
Lotteries
Pets, veterinarians
20000
Cable television & ISP
10000
Film Development,
Photofinishing,
Videocassette Rental
2005
2000
1995
1990
1985
1980
1975
1970
1965
0
1960
Constant $Millions 1982-1984=100
50000
Other Commerical
Amusement
BEA
Recreation
Account
Components
1960-2005
Consumer Media Spending
Television
350
Broadcast and satellite
radio
300
Box Office`
250
Home video
200
Interactive TV & wireless
content
150
Recorded music
Videogames
100
Consumer internet
50
Daily Newspapers
2009e
20083
2007e
2006e
2005e
2004
2003
2002
0
2000
Consumer Spending Per Capita Per Year
Estimated to be 40% of yearly hours in 2005, rising from
$608 to $1024 per capita between 2000 and 2009
Consumer books
Consumer Magazines
Shifts in the Composition of the
Recreation Account
0.35
Admissions to Spectator
Amusement
Radio & TV Repair
Clubs, Fraternal,
Recreation Programs
0.25
Commerical Participant
Amusement
0.2
Pari-mutual returns,
Lotteries
0.15
Pets, veterinarians
Flat
Flat
0.1
Cable television & ISP
0.05
2005
2000
1995
1990
1985
1980
1975
1970
1965
0
1960
Share of Recreation Account
0.3
Film Development,
Photofinishing,
Videocassette Rental
Up, then down
Other Commerical
Amusement
Up then down
Changing Shares of Spectator
Amusements Spending
0.7
0.6
Motion Picture
Theatres
0.4
Legitimate
Theatres, Opera,
and other NonProfits
0.3
Spectator Sports
0.2
0.1
2005
2000
1995
1990
1985
1980
1975
1970
1965
0
1960
Share of Admissions
0.5
Changes in Share of Spending on
Commercial Participant Amusements
0.7
0.6
Sightseeing & Private
Flying
0.5
Bowling and Billiards
0.4
Casino Gambling
0.3
Other Commercial
Participant
Amusements
0.2
0.1
2005
2000
1995
1990
1985
1980
1975
1970
1965
0
1960
Share of Commercial Participant Amusements
0.8
Gambling (not Casino Hotels)
Casino Hotels
Historical Context of Consumption
• The rise of consumption as incomes rosethe shift from self production to market
purchases related to the changing division
of labor
• Structural change (earlier diagram)
• Change in social behavior (diagrams on
household travel in Chapter 9)
• Fueling consumption with credit
The falling savings rate
Much lower than most developed nations; investment supported by capital flows
into U.S. related to our huge trade deficit.
Is the fall of the $ going to challenge this pattern?
Theoretical Perspectives on
Consumption
• Sociological views – differentiation of spending
by income class; behavioral responses to
advertising; impacts on households, and other
forms of social activity
• Neoclassical economic views – utility theory,
homo economicus, critiques of this kind of
calculus—can you explain your spending by this
model?
• Marxist views – goods and services not just as
things, but the product of labor that is in turn
differentiated by class, exploited by capitalists to
extract surplus value that could have been spent
on goods and services
Geographies of Consumption
• Several approaches undertaken by
geographers
• Consumption, the body and individual
experience
• Shopping spaces as places with
“meaning”, documenting the nature of
social relations in these places
• The commodity chain approach, often
viewed in the context of globalization
We could develop
this model for
almost any
kind of commodity
Analogues in the
service economy?
Environmental Dimensions of
Consumption
• Environmental impacts of production,
distribution, consumption, and postconsumption
• Unequal impact on the globe of production
and consumption processes (Figure 11.8)
• How to restructure these relationships,
such as the measures of global footprints?
(Figures 11.9 and 11.10)
Implicit Environmental Impacts of
Imbalances in Production and Consumption
Ecological Footprints
A cool cartogram! But, what is it
really showing?
Summary
• Consumption dominates GDP in most countries,
but geographies of it are relatively understudied
• Economic models of consumption are too
simple, but alternatives are equally difficult to
document
• Active research on commodity chains is helping
to trace ecological footprints, and define more
sustainable production systems (e.g the work I
just reviewed for Sustainable Seattle)
• How to measure environmental impacts of
consumption, and design production &
consumption systems with lower environmental
impacts—in many ways the challenge posed by
global warming