Consumption

The term consumption is used in different academic disciplines in different ways. Depending on the specific academic background, people ask how supply and demand and, in other words, production and consumption in economy and society are related to each other. Or they investigate how individual people, social classes, or societies realize their consumption practices. The consumption practices illuminate differing empirical answers concerning how much actors spend for specific goods and services. Furthermore, consumption research inquires into the preference structures of individual actors, households, or classes and their corresponding rationalities that lead consumption behavior. How consistent are preference structures due to changing empirical backgrounds of time, space, and related culture? Finally, consumption research is also concerned with the relationship between earnings and spending. Are observed consumption practices directly related to a specific level of income and other available financial resources and vice versa? Which socioeconomic context variables (historical time, geographical framework) specify the relationship and in which way do attributes such as age, gender, class, occupation, and lifestyle have their own impacts on the way in which consumption is realized?

Economics has a long history of changing concepts dealing with consumption. Adam Smith argued in The Wealth of Nations that “consumption is the sole end and purpose of all production” while later, John-Baptiste Say in his so-called law of supply and demand saw production as the real ground-work of wealth or value. Criticizing Adam Smith, John-Baptiste Say argued:

This statement has evolved to textbook knowledge as “supply creates its own demand,” a formulation by which John Maynard Keynes had summarized Say's law, although ongoing voices say that Say's thought was more differentiated than such shorthand definition suggests. Keynes turned previous discussion on its head by strengthening the role of customers at a macroeconomic level, which led to the formulation that demand creates its own supply. What Keynes had in mind was that economic growth can be created best by strengthening incentives for consumption. For Keynes, the sphere of consumption was based [Page 377]upon socio-psychological dispositions of human agents which are remote from the economic theory existing before.

Past Consumption Research

During the last 70 years economic consumption research has moved in many different directions. While Keynes attributed the cognitive dimension of perceptions in combination with issues of uncertainties to consumption, other authors strengthened other aspects. Franco Modigliani stressed the aspect that consumers differ concerning their decisions within their life cycles; J. K. Galbraith linked consumption to a historically new phenomenon of an affluent society, while T. Scitovsky bridged the discussion to human needs. The later points of discussion overlapped clearly with historical and sociological views dealing with consumption.

Historians investigate consumption issues from many different perspectives. They ask which specific goods are used and consumed in different centuries, how and why goods are bought, the evolution of consumption patterns within socioeconomic changes, and how different societies are constituted and portrayed by specific “regimes” of consumption. Historians also produce analytic stories of specific consumption goods (e.g., history of tea consumption) or practices of consumption (e.g., history of cooking or traveling) that serve as pieces of historical change and that are simultaneously items of historical diagnosis where particular elements of analysis stand as examples for the whole. Max Weber discussed the rise of industrial capitalism in relation to Protestant ethics and the inherent consumption ascetics, but in the 20th century historians came up with labels of a “consumer society,” which had changed the previous face according to the progress and spirit of changing times.

...