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Downshifting is a concept that spread in the United States during the 1990s, starting with the Amy Salzman's book Down-Shifting: Reinventing Success on a Slower Track. Downshifting involves focusing less on paid work in order to have time to do more of the things one wants to do while cutting out unnecessary expenditure. But it does not mean going to the extremes and deviating too far from common behavior or attempting self-sufficiency. The concept is also used in England, Australia, and other industrialized countries, for example, in Sweden, where it quickly won acceptance in 2008.

The term is derived from the process of changing gears in a car to drive more slowly. It can be defined as making a voluntary, long-term change in one's lifestyle that involves accepting significantly less income and consumption. Downshifting often has to do with practical changes that reflect a relatively low level of orientation toward work and consumption.

Ideas about an ascetic or simple life, coupled with frugality and limited aspirations, are well known in most major religions, as well as in literature. An example is the still popular book Walden (1855) by Henry David Thoreau, which describes a simple life in the forest far from urban stress.

Media often use downshifting and the term voluntary simplicity as exchangeable concepts. The latter term was spread through the 1980s through a book by Duane Elgin titled Voluntary Simplicity: Towards a Life That Is Outwardly Simple, Inwardly Rich. The subtitle of the book has become a slogan for the American simplicity movement. However, these concepts can be seen as separate categories. One difference is that the simplifier may have lived simple all her life, while the downshifter per definition must have made a significant change. Another major difference is that the simplifier, but not the downshifter, is driven by a coherent and articulated philosophy that includes a concern for environmental issues. This goes beyond just buying environmentally friendly products by also focusing on the moral imperative of a low level of consumption.

The concept of downshifting has gained importance in a context of long working hours and frequent overtime work. Reports on stress, time pressure, consumerism, rat race, and problems of maintaining a balance between work and private life are quite common. Many also find Western societies too materialistic and focused on money and consumption. Downshifting is a reaction to our work-oriented consumer culture and an antithesis of the yuppies of the 1980s. Downshifters often suggest that the marginal utility from consumption is declining when consumption levels are increasing. Downshifting has become a concept that catches the dream of a lifestyle with more time and balance. A popular joke in books on downshifting is that the problem with the rat race is that even if you win, you are still a rat.

Is downshifting widely practiced or is it just a common dream? The most cited academic survey on downshifting, Juliet Schor's The Overspent American, states that 19 percent of the U.S. respondents declared that they voluntarily had made a long-term lifestyle change in the last five years—other than taking a regularly scheduled retirement—which had resulted in making less money. Similarly, Clive Hamilton found the numbers to be around 25 percent in telephone surveys in Great Britain and Australia.

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