The (Detrimental) Relationship between Surplus Value and Conspicuous Consumption

In an analysis of the average total work hours performed by households of core countries, most developed nations have experienced gradual decreases in total weekly work hours. This is because of the rise in technological productivity, and its ensuing benefits that have allowed firms to produce the necessary level of daily output in a shorter period of time (Bowles, Edwards and Roosevelt, 2017). With regard to the United States, it has developed increasingly streamlined and efficient production processes (Bowles, Edwards and Roosevelt, 2017). However, the average number of work hours of US households has not declined but has, in fact, risen. Unlike other core nations such as Spain, the US does not have any laws or regulations limiting the number of work hours one performs, nor are there any regulations enforcing a required amount of vacation days (Tremlett, 2013). This notion, paired with uncertainty surrounding employment turnover and security, has led to rises in total weekly work hours of middle and lower-class households (Ehrenreich, 2011). Over the past 50 years, the United States has sustained a significant level of technological development and subsequent economic growth. These increases have allowed for significant improvements in industrial production processes. Due to present-day advancements and growths made in technological productivity and human capital, total work hours contributed by middle and lower-class workers would, intuitively, be in decline (Bowles, Edwards and Roosevelt, 2017). This is because humans are now able to produce more goods and services more efficiently with the technology they have at their disposal. 

Economic analysts recognize that there are a finite number of hours in the day and acknowledge how individuals spend these hours doing a combination of two activities – performing labor or consuming leisure. Since there is a rise in work hours experienced by American households, this trade-off has caused Americans to enjoy diminishing levels of leisure by virtue of the exploitation of surplus value by capitalists (Bowles, Edwards and Roosevelt, 2017). In regards to the technological gains the US has achieved over the past century, it is logical to assume that work hours of middle and lower-class Americans would decline from the rising technical efficiency in the production and sales processes of goods and services. However, the opposite is true. Most Americans are, on average, working longer workdays and enjoying lower levels of leisure time (Bowles, Edwards and Roosevelt, 2017). Capitalists seek to lengthen the working day to extract higher levels of surplus value, which is recognized as the profit that capitalists collect. This, in turn, serves as an indicator of a general decline in the quality of life of US households (Bowles, Edwards and Roosevelt, 2017). 

One reason for the decline in quality of life is because of the practice of conspicuous consumption and the concept of commodity fetishism. According to Veblen, individuals wish to be perceived as sophisticated and wealthy by others through the consumption practices in which they engage (Veblen, 1994). Statistically, present-day households own and consume more goods than households from half a century ago. This phenomenon can be explained by Veblen’s idea of conspicuous consumption, which interprets society as embodying a consumerist culture (Veblen, 1994). Due to individuals’ need to appear wealthy and to be a part of the socioeconomic elite, consumers fetishize certain commodities, specifically name-brand products, as it is these products that, through their economic and social implications, grant these individuals the image of prosperity (Veblen, 1994). Such products serve as indicators of social class and wealth. However, a detrimental consequence that stems from such practices is emulated by Karl Marx’s idea of the overworked laborer and surplus value extraction. 

Rampant consumerism, or as Marx calls it, “commodity fetishism,” contributes to the idea of the overworked American. Specifically, commodity fetishism pertains to the idea that commodities attribute more value than the utility that they were intended to provide (Bowles, Edwards and Roosevelt, 2017).  Therefore, commodity fetishism is the relationship between the prices of commodities and what the prices indicate regarding the prestige of the good, as well as its impact on how people connect. In other words, social hierarchies are not merely built on what people do and how they interact, but through the quality of consumer items they possess (Bowles, Edwards and Roosevelt, 2017). This is precisely what Marx meant with his idea of the overworked individual and household because, in order for individuals to keep up with the newest and most expensive items, households must perform more hours of labor. Essentially, the connection between commodity fetishism and surplus labor and value stems from households’ desire to consume items that indicate higher social class (Bowles, Edwards and Roosevelt, 2017). In order to purchase these goods, Americans have been required to work more hours to obtain the necessary wages. As a result, capitalists are also able to collect higher levels of revenue by squeezing increasing levels of surplus value from each worker’s labor. More importantly, particularly for lower-class US citizens, consuming conspicuously diminishes the person’s ability to pay for necessities, such as nutrition, housing, and insurance. Therefore, conspicuous consumption is arguably irrational for these households.

On the other hand, one method producers can employ to combat the effects of conspicuous consumption is for the government to create a binding price floor for the price levels of luxury goods to levels slightly beyond lower-class consumers’ marginal propensity to consume that item (Salls, 2004). Another solution would be to downsize. Firms that manufacture and sell similar products or substitutes can manufacture luxury goods and retail them at lower and similar prices. A study conducted by Harvard Business School found that consumers of luxury goods respond more sensitively to retail prices than to the quantity of the item sold per unit (Salls, 2004). Normally, it is inelastic goods to which households are quantity-conscious. Regardless of the cost of inelastic goods, individuals will still purchase the item due to its utility (Salls, 2004). However, since the demand for peer admiration and respect has been exorbitant, individuals who desire the admiration will still spend on these items. Therefore, if firms can offer certain luxury goods at lower prices, such as smaller necklaces and cheaper luxury watches, conspicuous consumers can consume those items without experiencing as much of a monetary burden, thereby alleviating the effects of conspicuous consumption.

Another aspect of conspicuous consumption is the global ecological harm and waste that is generated, and often outsourced to peripheral and semi-peripheral nations, from excessive consumption habits. As demand for certain goods increases, companies increase production to keep pace (Hill and Holman, 2014). However, although internal profits may increase, companies tend to ignore the upstream costs of production. One example is the hyper-exploitation of the earth and soil for cotton cultivation for garment manufacturing (Bowles, Edwards and Roosevelt, 2017). For one, increases in the production of a good require more energy input for the operation of factories and machinery. Globally, the primary sources of energy continue to be fossil fuels that burn, at most, around 40% energy efficiency (Hill and Holman, 2014). In addition, natural consequences, such as soil aridity, have arisen from lofty manufacturing pressures and goals. Therefore, for the ecological wellness of our planet, it is best for capitalists to advocate for leisure time for their employees and for individuals to practice mindful consumption. 

In order to curtail these negative externalities, American households should practice mindful consumption. Although it is acceptable to consume name-brand, high-end goods and services, it does more damage than good for Americans to engage excessively in conspicuous consumption (Becker et al., 2019). If consumption practices become overly disproportionate and  current individual motives persist, price levels will continue to increase. In addition, since the purchasing power of American households’ disposable income will decrease relative to the prices of such luxury goods, consuming such goods will become more financially costly (Bowles, Edwards and Roosevelt, 2017). Subsequently, overworked Americans will increasingly commit more surplus labor hours to continue consuming conspicuously, but at the expense of personal happiness and leisure time. Therefore, in order to prevent workers from becoming alienated and exhausted by their work, government subsidies aimed at helping set higher price floors for worker wages, as well as the opening of new job opportunities, can help combat the wage suppression that arises from surpluses in labor (Becker et al., 2019). Meanwhile, consumers should value commodities for the utility that they embody, rather than use them to display one’s social status and class (Becker et al., 2019). In this way, by adopting a more prudent consumerist culture, we can help secure a more economically equitable future. 

Works Cited:

Becker, J., Tripathy, H., Brown, C., Augenstein, L., Richardson, T., & Karahan, D. et al. (2019). 10 Reasons to Escape Excessive Consumerism. Retrieved 31 July 2019, from https://www.becomingminimalist.com/escaping-excessive-consumerism/

Bowles, S., Edwards, R., & Roosevelt, F. (2017). Understanding Capitalism. Oxford University Press.

Ehrenreich, B. (2011). Nickel and dimed (1st ed.). Picador.

Hill, G., & Holman, J. (2014). Chemistry in Context (9th ed.). Oxford: Oxford University Press.

Salls, M. (2004). How to Avoid a Price Increase. Retrieved 1 August 2019, from https://hbswk.hbs.edu/item/how-to-avoid-a-price-increase

Tremlett, G. (2013). Mondragon: Spain's giant co-operative where times are hard but few go bust. Retrieved 31 July 2019, from https://www.theguardian.com/world/2013/mar/07/mondragon-spains-giant-cooperative

Veblen, T. (1994). The Theory Of Leisure Class. Open Road Media.