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Centre for Development and the Environment
Senter for utvikling og miljø (SUM), University of Oslo
The Need for Holostic Theory in Research for Sustainable Consumption
Desmond McNeill
Integrated Research on Development and the Environment
The work of the Centre is focussed on rapid social change, the natural environment, and the interaction between the two. This implies a need for analysis at local, national, and global levels; a comparative approach, in relation to both time and space; an interdisciplinary approach, with new theoretical perspectives; and a focus on the connec-tion between ideas and action. An important aim is to contribute to a critical analysis of the concept "sustainable development" from a variety of perspectives: ecological, economic, anthropological, ethical, etc.The Centre undertakes a number of research programmes. Three of the largest, involving collaboration with researchers in several countries are: a study of environment and food security in the Sahel region of Mali; another in the rain-forests of Sumatra; a third, with projects in several African countries, concerned with health and population issues.
All three of these research programmes are related, directly or indirectly, to the issue of sustainable consumption, as is much of the other work of the Centre, for example research on energy conservation in Scandinavia. And consumption patterns have been identified as one theme of particular interest for SUM, where it is hoped that a long-term research programme focussing on this issue can be developed. This can benefit from a preliminary research project which is now nearing comple-tion, and which has so far focussed especially on the theoretical and methodological aspects of consumer behaviour.
This project, entitled "Consumption Patterns and Social Change", is concerned with both rich and poor countries. Though the issues that arise may appear to be very different, there is every reason to suggest that theoretical insights as to why consumption patterns change may inform both (see below).
Consumption Patterns and Social Change
Background for the Project
The project entitled "Consumption Patterns and Social Change" has until now received financial support from the Norwegian Research Council. The approach is cross-disciplinary; those primarily responsible are Desmond McNeill (economist, project leader) and Kristi Anne Stølen (anthropologist). Through the project, links have been established with other researchers and research institutions, both in Norway and abroad.As part of the project, a two-day workshop is being organised in Oslo, in January 1994, with the title "Changing Tastes: alternative perspectives on consumption". This will bring together economists, anthropologists and sociologists with a special interest in this field. Speakers will include Professor Ben Fine, economist, author (with Ellen Leopold) of The World of Consumption, 1993; Daniel Miller, anthropologist, author of Modernity and Mass Consumption, 1987; and Mika Pantzar, Director, Institute for Consumer Research, Finland. Participants have been invited from SUM, SIFO (National Institute for Consumer Research, Oslo, who are collaborative partners in the workshop), several departments of the University of Oslo, Central Statistical Bureau, Norwegian School of Business Administration, Norges Markedshogskole, and other selected institutions in Norway.
Publications from the project so far include "Consumption Patterns and Social Change: Towards an alternative economic approach". (McNeil 1992a), and "Konsummønstre og bærekraftig utvikling: Hvor mye forstår vi?" ("Consumption Patterns and Sustainable Development: How Much do We Understand?") (McNeil 1992b).
Why Consumption Patterns Matter
Thanks to the debates on sustainable development, and the United Nations Conference on Environment and Development (UNCED) in June 1992, the issue of consumption, and more specifically consumption patterns in affluent societies, has been suddenly thrust onto the agenda - metaphorically and even literally. What would happen, it is asked, if income levels in, say, India or China, were to reach the level of those in Norway (or USA or Japan), and a billion more people were to have the level and pattern of consumption which is now enjoyed by the lucky few? The environmental implications would certainly be very serious, perhaps unacceptable. But few can agree what should be done about it. Indeed, positions are in danger of becoming polarised, with the rich blaming the growing environmental problems on population growth in poor countries while the poor blame consumption patterns in the rich countries.(It is significant - and hardly fortuitous - that at the same time as the issue of consumption patterns in the West was dropped from the UNCED agenda, another major issue was also removed: population growth in the rest of the world. These two issues may also mirror each other in other respects, since one may - perhaps optimistically - postulate a necessary "environmental transition" analogous to the demographic transition which is expected to bring about an ultimate levelling off in global population levels. This issue will be treated in a forthcoming work by Desmond McNeill, SUM).
Amidst the rhetoric surrounding UNCED there is at least one thing that most people can agree on: we need to know more about the determinants of consumption patterns. But theories available from economics and other social sciences give us little guidance; and popular explanations of consumption - employing loose or value-loaded words like "modernisation" or "greed" - are quite inadequate.
Although the ultimate aim of development is improved welfare, which implies changing consumption patterns as well as higher levels of consumption, relatively little attempt has been made to understand the causal relationship (which may be two-directional) between consumption patterns and economic growth.
The emphasis, both in analysis and policy prescription concerned with the development process, has until now been largely on production and technology. Yet the issue of consumption patterns is also of great importance. Regrettably, economic theory helps us very little in understanding consumer behaviour, and economists are unlikely to make much progress without a rather radical change of approach. In brief, economists must directly address the question of "tastes" in consumer behaviour, and that this will require abandoning the standard assumption of autonomous preferences. In other words, economic theory must be adapted to allow for the fact that the consumption behaviour of one individual is determined very largely by that of others - by so-called "reference groups". And here other social sciences, where interdependent behaviour is axiomatic, have much to contribute.
Consumption patterns are an important, and little researched, issue. The consumption patterns of the very poor matter. If they were "rational consumers" with a sophisticated knowledge of their nutritional requirements then one might expect that they at least used their meagre resources optimally. But there is good evidence that this is not the case. Not only are "traditional" consumption patterns often far from optimal, in nutritional terms, but as incomes rise nutritional standards often do not do so. A number of studies have confirmed this finding, which suggests a need for a better understanding of the factors that influence the "tastes" of consumers at or near poverty level (e.g. Shah, 1983).
The consumption patterns of the rich also matter, especially in the context of sustainable development. To quote the draft document for "Agenda 21" (Section 1, Chapter 3. "Changing Consumption Patterns") prepared for UNCED 1992:
-
"While poverty leads to one kind of environmental stress, the most
serious global problems now facing the planet are those associated with
economic growth and rising income." (UN 1992: 5)
Clearly the consumption patterns of all income levels matter, because it is these which ultimately determine the pattern of production. But one may even argue that consumption patterns are an important factor in explaining economic performance. Thus, Felix has suggested that the economic success of Japan can be partly attributable to their slow speed of preference shifting (i.e. they did not closely follow the path of consumption behaviour marked out by richer nations. By contrast, the collapse of the Puerto Rican economy has been attributed to the reshaping of the island's consumption into the 'American way of life'.
In summary, there are good reasons, both with regard to the process of development in general, and to the more specific issues of poverty and of environmental stress, to study the determinants of consumption patterns.
How Much Do Economists Understand?
Engel's Law, named after the nineteenth century statistician E. Engel, postulates a declining share of food in household expenditure as incomes rise. This law has been found empirically valid over a wide range of countries and time periods, and relates directly to the crucial structural shift, from agriculture to manufacturing, that has characterised the process of economic development. And an extension of Engel's Law would appear to be very relevant to our study of the major structural shift that is apparent at a later stage of economic development - from manufacturing to services - which is similarly related to the pattern of consumption.There are other important changes which generally accompany the process of economic growth, of which four are of particular significance in the present context: (1) urbanisation and integration into (2) the market economy, (3) the international economy, and (4) the "public" economy1. Economists have a good empirical knowledge of these phenomena and of how they interlink (see, for example, Chenery and Syrquin, 1975). And these changes, also, have a major impact on consumption patterns.
But neither Engel's Law, nor empirical analyses such as those undertaken by Chenery and Syrquin, provide us with an explanation as to why consumption patterns change - either over time or as income levels rise. Hence our capacity to forecast what will happen in rich countries is very limited; and our forecast of what will happen in poor countries depends on the assumption that they will follow mechanically in the footsteps of the rich.2
When it comes to explaining why consumption patterns have changed, economic theory has little to offer. Price and income are the only determinants of consumption behaviour addressed by conventional theory. Unexplained residuals are usually attributed to "tastes". Although price and income are very powerful in explaining short term changes, they are very weak in explaining long term processes, where changes in tastes are what matter. The inadequacy of the economic theory of consumer behaviour has long been recognised by economists themselves (see, for example, Becker 1976, Lancaster 1966) and there are some signs of an increasing openness among economists to a rather radical revision of the basic postulates of neo-classical theory, as confirmed by what may be regarded as the standard work on the economics of consumer behaviour:
-
"(I)t seems unrealistic to suppose that preferences are exogenous,
God-given, and unchangeable. Rather they are socially inherited and
conditioned and are governed by the conventions of technology and social
institutions." (Deaton and Muellbauer, 1980. 330)
In recent years, some economists have tried to test empirically whether consumers do in fact emulate each other, and have met with some success. (e.g. Alessie and Kapteyn, 1991). Although this may be the accepted way for economists to proceed, it need not be the only way forward.3 For further progress to be made it may be necessary to delve deeper into the foundations of economic theory, modifying the assumption of autonomous economic man, so as to develop alternative models of behaviour. In this enterprise, economists may usefully collaborate with other social scientists, to whom the idea of interdependence is fundamental.
Can other social sciences help?
The ideas briefly presented here appear to have found acceptance by at least a few economists. For example, Heap, in Rationality in Economics, argues that we use goods and services "communicatively" (Heap, 1989: 160) And Deaton and Muellbauer acknowledge the same point:
-
"Since belonging to certain social groups and not belonging to others
is part of their sense of identity, it is inevitable that, to some extent,
households will pattern their consumption and market behaviour on that of
other households." (Deaton and Muellbauer, 1980:330)
The anthropological study of consumption is concerned mainly with the values and meanings of objects. Baudrillard (1975, 1981) argues that consumption goods should be understood primarily as signs, not simply as things providing material utility. And this is with regard to modern, not traditional societies. Indeed, it may even be argued that in such societies the "social relations of consumption" are of predominant significance (McNeill, 1988). Postmodern society is said to be characterised by disintegration of social identity and the emergence of homo consumens whose fragmented identity is constantly rearranged by the winds of fashion. Yet, as Løfgren (1990) notes, there is a danger of theorists expunging the individual completely, introducing the notion of a kind of "mindless consumer" helplessly subordinated to the market forces. (See also Miller, e.g. 1987, for a critique of the "mindless consumer" view).
Related to such arguments is a notion of change whereby consumption through an ever expanding market dislocates traditional stability and routines. Anthropologists try to go beyond simple dichotomies between stable traditional consumption and dynamic modern (or postmodern) consumption patterns. However, according to Wilk, most of them, in practice, still see a world in which local cultures and their preferences for local products are being subverted by hegemonic foreign ideologies which provide a myriad of seductive images to promote new needs of consumer goods. The end result is the elimination of local cultures by a "world culture" (Wilk, 1990).
It seems clear, however, that Third World people neither make completely free choices about goods nor merely absorb foreign goods into their existing modes of consumption. The challenge for a theory of consumption in the Third World is not to assume either total autonomy or its absence, but rather, as Wilk puts it, "to map out areas where coercion takes place, and seek explanations for the variations in these areas as well as for the way in which coercion and autonomy interact and obscure each other."
There should be scope for constructive collaboration with economics in the study of consumption patterns in both rich and poor countries. One important attempt at such collaboration is to be found in Douglas and Isherwood's The World Of Goods where an anthropologist and an economist try to build a theory of consumption on the view that: "Man is a social being. We can never explain demand by looking only at the physical properties of goods. Man needs goods for communicating with others and for making sense of what is going on around him." (1980: 95). Unfortunately, their work is less effective when it comes to the positing of an alternative to conventional economic theory, and they contribute little not already offered by such writers as Weber (1970), Veblen (1925) or even Packard (1960).
Another contribution has been made by Bourdieu, who, based on empirical studies in France, (Bourdieu, 1984) demonstrates that consumers perceive goods and services offered in the market differently and have developed class-specific tastes. His use of statistics can well be criticised, and he too fails to develop a coherent alternative to the rigorous, but simplistic, economic model of consumer behaviour. But his basic standpoint, like that of Douglas and Isherwood, has much to commend it. A major concern in his work is to demonstrate how consumption is used as a means to distinguish oneself from others, and, at the same time, to identify with a certain group of people. And he sees consumption patterns largely in terms of power, as an aspect of class conflict. This draws attention to the view of consumption as participation, with consumption as a common enterprise, which constitutes the basis for group formation.
We are, it appears, confronted by two alternative models: homo oeconomicus and homo sociologicus. As Elster puts it, "the former is supposed to be guided by instrumental rationality, while the behaviour of the latter is dictated by social norms." (Elster, 1989: 99) What is needed is a third model, embodied in what might best be called homo socio-economicus..4 In such a model, it would be accepted that, at least with regard to consumption behaviour, we are far from autonomous. Our consumption decisions are to only a limited extent determined by innate preferences, and to a very large extent by what may be called "lifestyle effects". And here there is a complex relationship between the individual and his or her "reference group", for consumption norms simultaneously serve functions of inclusion and exclusion. Thus, to quote Elster, "Fine-tuned distinction and gamesmanship within a group is consistent with 'negative solidarity' towards outsiders." (Elster, 1989: 140). To explain this point Elster refers to the work of the famous anthropologist, Evans-Pritchard on the Nuer:
- 'A man of one tribe sees the people of another tribe as an
undifferentiated group to whom he has an undifferentiated pattern of
behaviour, while he sees himself as a member of a segment of his own
group.' (Evans-Pritchard, 1940: 120, as quoted in Elster, 1989: 141).
What Does This Imply for Policy?
Although the consumption patterns of the poor are of great importance, the most pressing issue in the context of sustainable development - if we agree with the quotation from Agenda 21 cited above - is the consumption patterns of the rich.6 What if anything can be done about them?The research approach outlined here is very basic and theoretical, and it is not likely to yield any quick solutions. But it could perhaps lead to a better understanding of consumption behaviour, which is a necessary if not sufficient condition for changing such behaviour, should this be necessary. Although this paper certainly offers no answers, it does have some interesting implications. Before noting these it is appropriate to consider an idealised, and positivistic, view of how research might relate to policy.
It is first useful to distinguish between explanation, forecasting and prescription. Ideally, good research will explain a certain set of circumstances (say, consumption patterns in rich countries today), which will provide the basis for a reliable forecast of what these are likely to be in the future (say twenty or fifty years hence). If the forecast situation is thought to be undesirable, the explanatory theory may also offer prescriptions as to what should be done - including the design of instruments which could put these policies into effect. This is a simple rational-scientific approach to the problem. (See McNeill, 1985) What can we conclude from the foregoing?
First, economists do not have a good theory of consumer behaviour. As a result, we cannot forecast what people are likely to want in the future. The scenarios referred to in the introduction are projections, not forecasts, i.e. they are based simply on two assumptions: first, that incomes will rise; second, that as incomes rise, consumption patterns will follow those already established.
Second, the lack of a theory also greatly limits our capacity for prescription and for identifying policy instruments. If the aim is to reduce consumption, at least of certain types of good or service, then, to put it simply, current economic theory offers only two alternatives: ei-ther reduce incomes or raise the prices of the relevant good or service. Reducing incomes is not an alternative which is likely to find favour (which is largely why the debate is so heated). Even raising prices on certain goods - such as petrol - is controversial, but this appears to be a more feasible measure.7
Suppose economists demonstrated convincingly that the price of petrol should be raised, would this be accepted politically? The indications are that it would not.8 If taxes are to be imposed this will require political acceptance, which in turn will depend on attitudes. If we understood better why people want goods we might be in a better position not only to forecast what they will want in future but also to prescribe what measures for changing consumption patterns may be politically acceptable.9
The point to be stressed is not that all is hopeless, but rather that our current understanding of consumer behaviour is very poor, and that we are therefore confronted by a weak basis for policy prescription. The tastes of individuals are, to a very large extent, socially determined; they are strongly influenced by what sociologists refer to as reference groups (and anthropologists might describe more broadly as culture). With regard to their tastes, and hence their consumption patterns, individuals should be seen as interdependent, not autonomous. This does not mean that the consumption behaviour of individuals cannot be studied, but that a rather different approach is required. Some original thinking is required by both those who approach such issues from an individualistic perspective, as well as those who adopt a more holistic approach.
Notes:
1. Increased integration into the public sector means that the public sector takes on a greater role in the provision of goods and services (housing, health etc.)
2. This assumption is not well substantiated empirically, and, arguably, implies emulation, which is actually contrary to standard economic theory.
3. It is very unlikely that one can "prove" empirically that man is not autonomous. It should be sufficient that empirical evidence does not refute such a hypothesis. It is worth adding that in studies of advertising, strong empirical support has been found for the hypothesis that consumers imitate. (See Cross, 1983; and Penz, 1986). Indeed, marketing experts have long taken it for an established fact. Economists have often been surprisingly unwilling to appreciate the insights of those dealing with consumer behaviour at a more practical level. (See, for example, Howard, 1989).
4. In discussing homo oeconomicus it is primarily the question of autonomy that is dealt with here. The other assumed properties - rational, self-interested and maximising - are hardly touched upon. In this paper ethical questions are omitted entirely, although these are clearly important in relation to the wider debate on sustainable development.
5. Elster himself expresses severe doubts about this approach. In a longer paper (McNeill, 1992), Elster's work in this connection is dealt with at greater length. Elster has emerged as a key figure when it comes to rigorous work in the middle ground between economics and other social sciences.
6. The poor countries of the world are, understandably, sceptical of the rich who urge them to limit their population, and even modify their consumption patterns, while apparently being unwilling to do much themselves. Calls for sustainable development can, under such circumstances, appear as the rich of the present generation protecting the interests of the rich of subsequent generations, as opposed to the poor, either now or in the future. (McNeill, 1991).
7. Some economists argue that this will resolve the problem. Thus, as certain resources, such as oil, become scarce, so their relative price will rise, and consumption patterns adapt accordingly. There is some validity in this argument, of course, but even the most radical liberalists (if pressed hard enough) will concede that the market cannot resolve all problems. Furthermore, the problem is not only about exhausting physical stocks of resources, but of bringing about immensely costly or even irreversible changes.
8. Again, this could be self-correcting: when the inhabitants of a large city find that they cannot breathe they will be more willing to accept measures for reducing traffic. But a similar argument applies: to wait until this happens may be at best costly and at worst too late.
9. A report on the New York City government in Public Administration Review notes that municipal officials "now engage in explicit programs to alter citizen demand for services through a combination of educational efforts (that are called marketing in the private sector), regulation, and pricing." (Brecher and Horton, 1985: 273).
References
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