Christmas lull
Ps 49:16-19 (NIV) Do not be overawed when a man grows rich, when the splendor of his house increases; for he will take nothing with him when he dies, his splendor will not descend with him. Though while he lived he counted himself blessed–and men praise you when you prosper–he will join the generation of his fathers, who will never see the light of life.
It’s very early to measure the Christmas trading for this year but retailers are braced for a lull in sales. Abbey, the UK bank and financial services group, published a press release this November warning that UK consumers expect to spend on average £466 this year, down 21% on 2000.
This should come as no surprise to those with an eye on the British economy. In the period 1998 to 2002 UK GDP grew by an average of 2.4%, which provided Chancellor of the Exchequer Gordon Brown the opportunity to personally and publicly extol his reputation as a safe pair of economic hands. In the first quarter of 2005 this growth had slowed to 0.6% leading to questions about the Chancellors budget predictions and calls for proactive moves to stimulate growth. Such negative news tends to cause consumers to reign in their spending and ponder their personal debt-levels; if Abbey is correct this is bang on the money.
Anglo-Saxon countries – particularly here in the UK – tend to view the general health of their economies by its retail activity; for a nation of shopkeepers this would be an obvious indicator, but do we put too much emphasis on one aspect of the economy, and is rampant consumerism such a good thing?
*****
Britain in debt to the moneymen
Luke 16:13 (NIV) “No servant can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.”
In July of last year UK personal debt broke through the £1 trillion barrier, in little over 11 months it had increased by 10%. According to CreditAction, a UK organisation that publishes consumer debt statistics and seeks to raise awareness of the dangers high consumer indebtedness, the average UK adult owes £24,420 (inc. mortgages) a figure which grows by £180 per month (0.7%). This figure suggests we are spending £180 per-person per-month too much; this would be an over-simplistic conclusion, as consumers would expect the return on investments (chiefly mortgages, but also pensions) to match this increased outlay meaning indebtedness in real terms would be much lower or zero. This stipulation of course is dependent on rising house prices and sound economic growth (which increases the value of pensions investments).
If economic growth is at only 0.6% and slowing, many consumers may find themselves in a precarious position – as many were in the early 1990’s – with the experience of negative equity, which can in severe circumstances lead to the repossession of homes.
Much of the growth since 1997 has been a result of increased public spending, which can – at least in the short term – stimulate the economy. Equally there is no doubt that following the economic liberalisation of Thatcherism, the UK benefited from a comparatively more deregulated economy, meaning that while in Western Europe unemployment was creeping up, the UK enjoyed a fairly stable rate of about 5%. When unemployment is relatively low consumer confidence is usually high.
The buoyant UK economy led to an increase in social mobility and many people traded-up their homes. The relatively high population density of the UK meant that as people looked to move, inevitably house prices rose. This rise was compounded as young professionals saw the returns on property investment and joined the marketplace. Seemingly overnight people saw the value of their homes – and therefore their equity – rise; lenders keen to tap into this new wealth offered homeowners ever-larger secured loans. Secured lending on homes in October 2005 was £946.9bn, or 83% of the total UK personal debt (£1,138bn).
As the escalation of house prices slows down (or worse, house values decrease) people will be unable to tap into more equity and consumer spending – so much of which is on credit – will decelerate. A significant drop in consumer spending will halt retail growth, a major driver of our increasingly service-based economy, and leave retailers who have enjoyed the fruits of impressive growth, looking to consolidate their market position. Shareholder pressure will mean cost-cutting exercises and inevitably jobs will be sacrificed.
As jobs go the pressure on highly indebted citizens will become critical, yet again reducing general consumption, feeding a downward economic trend.
*****
Our consumer culture
Luke 8:14 (Phi) “And the seed sown among the thorns represents the people who hear the message and go on their way, and with the worries and riches and pleasures of living, the life is choked out of them, and in the end they produce nothing.”
As people become more prosperous their wants and desires are more readily met; in practice consumer choices become more luxurious as each level of want is satisfied (see Maslow’s Hierarchy of Needs). Designer brand that were once the preserve of the upper echelons of society, are now within the grasp of the burgeoning middle-classes. It does not take long before wants are perceived as needs and easily arranged credit is used to plug any shortfall in funds.
Our consumer culture is fuelled by the ever more sophisticated advertising industry, which evolves constantly as we develop as consumers. In a crowded marketplace brands fight for the oxygen of consumer awareness, they need to be inserted in to the nations collective consumer conscience.
Take Apple’s phenomenally successful iPod; essentially little more than a stylishly designed solid-state music player, it is not revolutionary or technically superior to similar competitors. Yet the word iPod has become synonymous with MP3 players (‘MP3’ in the generic sense, iPod actually uses the more efficient AAC format) and consumers buy Apple’s player in there millions (around 22m have been sold to date). So what has made the iPod so desirable? The obvious answer is marketing, the iPod has been thrust into the consciousness of the consumer by constant references in the media; many magazines even publish, “What’s on you iPod†features.
When you buy a magazine or a newspaper, brand penetration is not exclusive to the traditional advertisements. People buy magazines such as GQ because they have chosen to subscribe to a defined lifestyle, and these magazines pros
titute themselves to consumerism in a complex symbiotic relationship.
Media is so deep-rooted in our society that brand placement can directly influence our purchase and stimulate our wants. While traditional advertisement suffices in stimulating the wants of children, adults are more sophisticated, and subtler, more complex psychological techniques are used.
Consumerism invades every facet of the modern human experience.
*****
Morality
Mat 6:19-21 (TEB) “Do not save riches for yourselves here on earth, where moths and rust destroy, and robbers break in and steal. Instead, save riches for yourselves in heaven, where moths and rust cannot destroy, and robbers cannot break in and steal. For your heart will always be where your riches are.”
In the secular western society it is at the altar of consumerism that many people now pray, and often it’s the desire for possessions that fill our idle thoughts. The lure of luxury and technology tempts the individual as they traverse our cities and towns; even churches look to replicate their techniques and attempt to shout above the din from little wooden billboards planted in their grounds. When you no longer want, what need is there for faith and hope?
It is in this void of guidance that is leaving western humanity morally stunted; we no longer have the counselling of the priest or the support of fellow followers to draw upon. People pass each other silently in the street and on trains sit consumed in their private MP3-induced inner world. As people leave their parents – often to work in cities mile away – their only guide in life is the media that preaches a new set of values and goals; no longer are we urged to live a just life and serve our fellow human, but we are bombarded by sex and materiality. A new set of values from a new God.
When the newspapers and television news presenters rue the stagnant sales this Christmas, we should not be remorseful that the materiality of the secular Christmas has failed to stimulate the sluggish retail sector, we should hope that family unity and a more thoughtful experience has been shared instead.
This is not to completely ignore the altruism of the modern Christmas experience, as people often enjoy the giving as much, if not more, than the receiving; and the 21st century Christmas still brings families and friends together. But as our unsustainable material desires threaten to burst the bubble of our prosperity we should put the credit cards away and find other ways to express our love and compassion to our kith and kin. Love cannot be quantified in iPods.
*****
Final thought
Prov 23:4-5 (NIV) Do not wear yourself out to get rich; have the wisdom to show restraint. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle.
In the face of globalisation Britain must change its priorities. We cannot continue to enjoy the conspicuous consumption that has typified the late ’90 and the early years of this decade, and we cannot continue to borrow huge sums to fuel our increasingly decadent existence. Britain must become more competitive and productive; our cosseted lifestyles are unrealistic when we compete directly with those that live on a few pounds a week. We must in essence stop being so greedy.
The economic truth remains – resources are limited, and for the rest of the world to enjoy the prosperity we have enjoyed for some time, we will have to sacrifice some of what we have. As China and India grow we will undoubtedly lose more jobs and our economies will come under increasing competition. Other economies will come online; the former Soviet States of Central Asia and nations such as Vietnam will increasingly become homes for global industry. The economies of Western Europe, unless they are proactive in their reform and re-gearing, will fail and unemployment and economic recession will consume our prosperity.
When faced with a difficult future it is hope and faith that offer comfort, we must again find strength within ourselves and find fulfilment in community. Faith can offer discipline and shared resolve, it can shoulder your problems, but it can also shed light where darkness exists. If we have faith we can face up to the threats and opportunities of globalisation and share the burden of difficult adjustments and reforms. The generous welfare state will have to be scaled back and people will rely on their family to ensure they have stability, and increasingly it will be hard work that brings prosperity not a never-ending supply of credit.
When you meet with your families this year, think just for a second how good you have it, just for a second think about how unstable a world built on credit is, and make a promise to yourself that next year you will keep that credit card on its leash.
Merry Christmas.
tygerland archive 