In today’s time, geopolitical instability and nasty wars have fueled market volatility and inflation. Household incomes are failing to keep pace with the modern appetite for consumption. Expenses of middle-class in general and working class particularly are high. Direction of ‘decision line’ of consumption has been changed from the economic rationality to emotional survival in social mileu.
Representative Image: AI
Culture of consumerism and social capillarity
“Actual utility of a product is lost in the crowded streets of tier 1 city of consumerism.”
Economic management of common men & women is consistently deteriorating due to internal factors such as affinity with unmet tangible needs and pursuit of material objects and external factors like possession of goods as trend of status symbol, emotionally magnetic market, more rise in real inflation as compared to pay hike etc. Culture of consumerism has become a part and parcel of human life. Social prestige has become a non-negotiable expense. People frequently bypass high-quality, affordable alternatives in favor of expensive status symbols, simply to remain noted in the hierarchy of valuable society members.
“Social capillarity is directly proportional to consumption of expensive and branded goods and services.”
Cost of living is consistently increasing; material needs of people have increased drastically. iPhone, earlier which was considered a status symbol is now available with a daily wage worker who may be struggling to afford basic fundamental needs such as health and quality education of their children.
“Material need has outpaced the fundamental need.”
Drivers of debt based consumption
Debt trap looms with new emerging EMI based consumption culture. People are purchasing beyond their economic capacity due to ease of access of instant personal loans, allurement and ease of availability of items on e- marketplace under different business marketing strategies such as Buy now, Pay later (BNPL), easily available credit cards, no cost EMIs, emotional advertisements, catchy offers, collection of credit points etc. People are being virtually imprisoned in debt jail and struggling to manage their debts. Irrational and immediate material needs costing high in long term where invisible but high interests make visible economic scars on families financial health.
Data, AI and associated algorithms
With the rise of AI and deep learning technologies, devices like mobiles, tablets, etc. often understand our buying psychology better than we do. Data analytics are used aggressively to study consumer’s behavioural patterns which turns our vulnerabilities into profit for the marketplace. While the results of this data fascinate the world, the underlying extreme capitalist intentions of these algorithms remain hidden from the end-user.
Adoption of ethical consumerism and geoarbitrage
Rejuvenation of ethical consumerism needs to be done to prevent the erosion of future capital security. Increase in debt based consumption is dangerous which may affect adversely the lifestyle of people in their old age. If we do not control our "necessities" now, we surely will be facing economic scarcity at the time of old age vulnerability.
Apart from changing consumer behaviour
possibility to adopt geoarbitrage should also be encouraged by moving to less expensive cities or towns where the cost of rent, utilities, and general living is comparatively lesser.
Goal is not just to save money; it is to reclaim our freedom from a system that trades our future security for the sake of today’s status symbols.
- Nitin Pratap Singh
Views are personal and self opined for educational purpose not for any endorsement purpose.
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