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~ Thomas Sowell, Economist
THE DICHOTOMY: CONSUMER (99%) VS. PRODUCER (1%)
D
uring a visit to the county landfill, I parked my truck in front of a junk heap
and stared. As I meditated on the garbage piled as high as a demolished
apartment building, it struck me that everything in this gigantic entangled mass
was once new. State-of-the-art. An object of want. There were BBQ grills, bikes,
toys, lawn furniture, stoves, picture frames, wine racks; it was a graveyard of past
desires, a swollen scrap heap of residually accumulated consumption. Then I
thought: Someone once opened their wallet, swiped a credit card, and bought
this stuff. And now, here it lies as worthless junk, while its debt probably
remains.
The consumerism hyperreality has consequences. Behind the debt and the
landfill, those consequences are belied by
the consumer scam—a belief where
consumerism is perceived exclusively interdependent of production
. That is, we
rarely link our consumption to its equal or corresponding production necessity
and the time it requires.
The consumer scam’s cognitive disconnect starts as kids. As toddlers, we’re
programmed to attribute consumption with emotions, whether it’s fun,
happiness, or a particular status. Throughout the years, we badger our parents
for toys and other playful things. Underneath these innocent desires an
unfortunate neural connection builds: the idea that “stuff” can induce positive
emotions without consequence. And because our parents pay the tab, such
mental connections carry a destructive payload:
consumption and production are
not correlated
.
In the classic film
A Christmas Story
, Ralphie is irrationally obsessed with a
Red Ryder BB gun. For Ralphie, the gun represents many things: happiness,
fulfillment, coming of age with responsibility, and even rejection of authority
(“You’ll shoot your eye out!”). Like Ralphie’s lust for the BB gun, adults attach
the same irrational zealousness to their wants. Buying this car will make me feel,
“I’ve made it!” This purse gives me the feeling that I’m affluently refined and
classy! While there’s nothing wrong with aspiring to own a Porsche while
adorned in Armani, what’s ultimately lost in these wants is
production
.
Specifically, what is the true cost of owning these things in terms of debt? Life
rations? Will a cute four-bedroom suburban house with its thirty-year mortgage
really take thirty years to pay off?
According to a study by Urban Institute, 35 percent of Americans are PAST
DUE on some type of debt. More than one of three people not only owe money,
but they are delinquent on what they owe. In fact, according to a survey
conducted by
CreditCards.com
, more than 18 percent of those indebted expect
to never pay it off.
42
Nope, they will carry it till death takes them underground.
Behind this American insanity lies the consumer scam—the notion that
consumption is unabashedly unconditional with zero correlation to production.
People live and work to consume today and think nothing of tomorrow.
In 2008, millions of homes sunk into foreclosure because buyers didn’t give
two-shits about buying a house they couldn’t afford with money they didn’t earn.
Similarly, I see the consumer scam and its emotionally inflamed buyers
commiserating on exotic car forums. Always worth a snicker, these folks max
themselves financially by purchasing an expensive sports car and yet cannot
afford routine maintenance, insurance, and gas. Uh, you didn’t know a
Lamborghini clutch is $12,000? Duh. But hey, at least everyone in traffic is
fooled.
Oh, and the next time you feel inadequate driving your ten-year-old rust
bucket while the sleek new Mustang speeds by, don’t. Chances are that driver
isn’t as styling (or smart) as you think.
Nearly 85 percent of all cars on the road
are financed
.
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Yup, that Audi has a ridiculous car payment. Not only that, but
the average loan now extends over sixty-five months—more than five years!
Translation? People buy more car than they can afford. So the next time you’re
stuck in traffic surrounded by new cars, remember those numbers: 85 percent
and 65 months. These aren’t life’s victors but victims of the consumer scam.
The
SCRIPTED
playbook is written in the language of consumerism and
bound by alienating production. Grab a dollar and give it a stare. The difference
between a lifetime of wage slavery or freedom is entangled in that little paper
hyperreality and its relationship to its kissing cousin, consumption. The
consumer scam is WHY the freeway is jammed with cars at 7:00 a.m. on a
Monday morning. It is WHY people have no options. And it is WHY people are
enslaved until death—at least until you stop being a consumer first, and a
producer last.
The consumer scam’s greatest impact is on the Sidewalk within the
SCRIPTED
OS. The distorted relationship between consumption and production
is why some people, even the seemingly affluent, are one misstep from
insolvency. Kanye West allegedly is $53 million in debt and is tweeting Mark
Zuckerberg for handouts. Rapper 50 Cent filed for bankruptcy. How are these
rich celebrities going broke? The consumer scam, where consumption
annihilates production. Big paychecks and huge business profits are no match for
the consummate consumer; it wants every dime earned and, compliments of
credit, more than every dime.
Think of it this way.
Debt, spending more than you earn, is consumption
exceeding production
. It isn’t money owed; it’s a production deficit.
DEBT = PRODUCTION - CONSUMPTION
If you have a negative net worth of $500,000, you have effectively consumed
$500,000 more value than produced. In lieu of the debt, you promise the debtor
future production. This is why strapping yourself with six figures in college loans
is dangerous.
Debt mandates the necessity of future work—even if you cannot find
work.
For example, Antoine Walker is an NBA basketball player who earned over
$110 million during his ten-year career. And yet, even at that staggering
production level, he couldn’t outrun consumption. According to a story at
Yahoo Finance, Antoine spent his millions on luxury estates for family members,
exotic cars (Bentleys, Maybachs, BMWs), luxury gifts and vacations for his
entourage, and even the best designer wardrobe money could buy. Geez, his
consumption was so feckless he wouldn’t wear the same designer suit twice.
When the real-estate crash hit his investments, the party ended. With no safety
net, Walker filed for bankruptcy in 2010. Over $110 million pissed away on
stuff
—the final tally was a negative $8 million in excess consumption.
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Sorry to say, but Mr. Walker earned like the 1 percent but spent like the 99
percent. He successfully produced in a skilled entertainment endeavor with fierce
demand and yet had an insatiable thirst for consumption, one that consumed
production itself. In the end, it cost him his NBA championship ring and, more
importantly, his ability to live forever
UNSCRIPTED
.
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