People's Democracy

  Consumerism Can Only Pauperise The Common Man

Chittabrata Majumdar

PEOPLE are increasingly being advised to go for more spending on luxury and enjoyment. Concerted campaign is on to drag people into the market of consumerism targeting whatever they are earning. While a large section of the media, at the behest of the big corporations, is the forerunner in this campaign, a section of the intellectuals, the prophets of neo-liberalism as well as the helmsmen shaping the economy of the countries are not lagging behind in working hard to pursue the people to plunge in to the market, with least thought of future and social security. Paths have been adopted to make the people averse of savings.

 
Globally, attempts are on to aggressively sell the concept of consumerism so that people adopt it as philosophy of living.  Full-swing efforts have been launched to counsel the common man to have fun and to enjoy by spending his income without bothering for the future. We have seen how desperate the US economy was in the recent past during the phase of slump till its present recovery through huge public spending on military to boost the demand. Citizens have been asked to spend more on consumer goods to prove their patriotism.

 
The contemporary global economy has been facing continued recession, with a huge installed productivity unmatched by sluggish demand due to significant decline in the purchasing capacity of the toiling masses – a result of the ceaseless exploitation of labour by the capital. The closing down of the industries, downsizing of manpower and casualisation of workforce in industries across the world, in the name of cost-cutting, are nothing but the fallouts of the lull in the effective market demand.

In fact, after successfully driving away the small manufacturers from the market, the big corporations are engaged in fierce battle among themselves for mere survival with the unutilised capacity to produce, without having sufficient buyers. Service sector, experiencing the sluggishness, is also not free from the anxiety, since the capital for the new market is livid from the continuous pressure on the third world for opening up its market for their outputs. The import liberalisation and ongoing attempts of opening the retail sector by foreign direct investment in our country are aimed to penetrate the domestic market for the first world and their multinational corporations. The influx of foreign products in the Indian market of consumer durables and in FMCG (Fast Moving Consumer Goods) segment, besides other areas speaks of strategy of the first world to capture it. The indigenous capital facing the acute crises also prefers to go in collaboration with the foreign capital for its own existence, rather to confront the former.
 
The successive class oriented governments of our country are keen to convince the people to spend more and more on consumer goods and luxury and shaping the policies in this direction. The official figures published by Central Statistical Organisation - Industrial Statistical Wing also corroborate the same capitalist design. The index of industrial food production declined to 152 in 2001-02 from its previous year index of 154.5, whereas production index of beverages, tobacco and tobacco products reached at 312.1 in 2003-04 compared to the figure of 200.4 in 2000-01, with a continuous upward trend during the interim period, to manifest the growth’s tilt towards consumerism. Also there was an impressive rise in the index of industrial production of wool, silk and man-made fibre textile from 145.1 of 1996-97 to 240.5 in 2003-04. Thanks to the affluent and elite section of the Indian society, Multinationals in FMCG (Fast Moving Consumer Goods) sector are spending exorbitantly to woo the market. As per the report of the results of consumer goods major Hindustan Lever Limited for April-June 2001, it’s spending on advertising and promotional support was up by 43.3 per cent (Source: Hindu Business Line of July 25, 2001).

 
The commercial banks public or private, indigenous and foreign are offering the consumer loans at so-called easy terms. Loans for enjoying the overseas holiday trips at apparent soft and affordable terms have been designed for the middle class. And least to say these are all for the mutual interest of capital employed in industrial sector, service sector and for financial sector as well to rob the people.

 
Mutual funds have been projected as the investment avenue with the allurement of quick and fatty return, followed by deliberate successive reductions in interest rates on savings in banks and other traditional public saving schemes. But the uncertainty in return from and insecurity in the investment in mutual funds remain untold. Thus all are set to allure the middle class to opt for the speculation with desire for luxury, ignoring the future social security aspects.

 
During a period of just less than a month from May 18 to June 7, this year Rs 1 lakh crore was generated in the capital market, leading the investors wealth to Rs 17.96 lakh crore, due to the spurt in trading of shares of FMCG along with the technology, banking and pharmaceuticals (Source: Economic Times of June 8, 2005). The ongoing events and developments have exposed that the capitalists, being frightened by the continued crises and shrink in the market, have adopted the policies to bring the common man in the market to pauperise the latter. Policies are devised and adopted to ensure the flow of money to be spent on consumption as well as to be laid in speculation.

But despite desperate attempts there is hardly any impressive manifestation of a turn around. The discussed measures to stimulate the market economy however have a little and short-lived impact in the process of economic recovery. In fact capitalism has entered into the phase of crises. The boosting of demand in a short-cut process can at best bridge the persisting gap between the supply and demand in short term, without creating any sustainable effective demand for long, in absence of real growth of purchasing capacity of the toiling mass.

The withdrawal of states from the demand management at the dictates of global capital has stalled the growth of effective demand, which is essentially pre-condition of long-term economic growth. The global finance capital enjoying the higher real income in the deflationary economy is obstinately opposed to public expenditure, out of fear of decline in profit in a demand push inflationary situation caused by addition in public expenditure. The aspect of national capital formation needed for strong and sustainable self-reliant economies of the third world countries like ours has been deliberately and continuously undermined. The official figures of apparent consumption of finished steel and pig iron also tells of inadequate attention to the desired development process of the country.  During the period from April to December 04, the apparent consumption in this segment was 26.9 million tonnes compared to a figure of 26.08 million tonnes during the corresponding period of previous year, (Source: Central Statistical Organisation - Industrial Statistical Wing), with a meagre growth of 3.14 per cent. The reduction in the interest rates on the bank deposits and for other traditional public saving schemes is indeed the integral part of global capitalist-designed programme in curtailing the ability of the governments to perform and corollary to fast declining contraction of states’ role in economic direction.

Coupled with this, the reduction of rate of interest on employees provident fund, alteration in the pensions schemes with the objectives of doing away the concept of social security and safety net etc., have made the future of the salaried people, millions in number, more vulnerable. The heavy dose of continued spending on consumer goods and luxury, in the capitalist driven path, without augmentation of purchasing power of the society in general cannot prove to be the saviour to bring the global capitalist economy out of ongoing vicious crises. But in the meantime, deluded by the media hype and allured by the bewitching market attraction the large section of middle class has been rushing for instant luxury and comfort spending their hard-earned money leaving nothing to save. The capitalist intrigue to enthuse the people to embrace consumerism, as their lifestyle is only to pauperise the millions of salaried, petty businessmen, technocrats, doctors, teachers and others rushing unconsciously to join the mass living below the poverty line.