Inequality, Consumer Credit and the Saving Puzzle
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Inequality, Consumer Credit and the Saving Puzzle

Christopher Brown

Providing much needed context for current events like the sub-prime mortgage crisis, this timely book presents a vision of an economy evolved to greater dependence on consumer credit and analyzes the trade-offs and risks associated with it. While synthesizing the Keynesian theory of consumption with the Institutional theory of habit selection (brought up to date with new knowledge from evolutionary biology and neuroscience), this book represents an in-depth treatment of the macroeconomic dimensions of consumer credit and implications of recent financial innovations from a non-traditional economic approach.
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Chapter 8: Final Remarks

Christopher Brown


The near-equivalence of the ancestral desire for social status with the need for commodities is a distinctive characteristic of modern Western life. The dominant mindset, which is to appraise the efficacy of economic institutions mainly by their service to the consumer, is comprehensible in light of the cultural orientation of what Keynes termed ‘needs of the second order’ to ritualized consumption. The iron rule of consumerist values is partly to blame for the failure to evolve socially protective responses to the contemporary brand of shareholder-driven, socially disembedded corporatism. A necessary condition for a transition to a more humanized species of economic organization – one in which consumer satisfaction and shareholder rights stand on roughly equal footing with values such as job satisfaction or self-actualization, income security, fairness, leisure and family time, natural resource conservation or environmental cleanliness – is the casting off of a significant component of the social habit structure peculiar to late twentieth- and early twenty-first-century capitalism. Stanfield and Stanfield (1980, p. 442, italics added) have written that ‘although needs for social esteem and even invidious distinction may be insatiable, it is not inevitable that they be expressed in an endless spiral of consumption’. Scitovksy has argued that the insatiability of the social instinct is not intrinsic, but is rendered such by the behavioral expression that it most often takes in contemporary life: [W]hen people seek status not in other people’s recognition of their specific accomplishments, but in a general token, like income,...

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