"The phrase "consumer society" complements the description of the present social order as an "industrial society." Needs are tailored by the mass media to create a public demand for utterly useless commodities, each carefully engineered to deteriorate after a predetermined period of time. The plundering of the human spirit by the marketplace is paralleled by the plundering of the earth by capital." - Murray Bookchin
"A society in which consumption has to be artificially stimulated in order to keep production going is a society founded on trash and waste, for such a society is a house built upon sand" - Dorothy L. Sayers
The expression 'nouveau riche' is a derogatory expression for new money, often in the hands of people that in Nigeria we refer to as 'Money Miss Road'. In the post-capitalist society we have found ourselves today, conspicuous consumption has become commonplace. With the undue emphasis that the capitalist model of economic growth places on consumption, there is the race to keep consuming so that the wheels of production must continue to roll. Bigger is now better and the 'throw away' or 'disposable' syndrome has taken centre stage! The new consumption society has created a new set of negative behaviour and sub-cultures that breed societies that have very shallow depth and practically no soul. Materialism has become the mantra of the new elite. It is really depressing to reflect on how much the society has degenerated. In Nigeria, these sub-cultures have created new challenges and with the import-dependent nature of our economy, coupled with high incidence of what is popularly referred to as 'real effective exchange rate', that makes foreign made goods cheaper and preferable to locally made ones, we have a major crisis on our hands.
The media scene itself been awash with stories of internet scammers popularly known as "yahoo boys" who have been arrested in recent times. Some were arrested abroad while some others were arrested here in Nigeria. There was the dramatic tale of a foreigner who lives in an upscale apartment in Eko Atlantic area of Victoria Island. Stories have it that the man gave the EFCC a tough time as he hid in the ceiling of his apartment, but eagle-eyed operatives smoked him out and promptly got him arrested. Not long ago, the video of one of the kingpins who plies his nefarious trade out of Dubai went viral. This video shows how the man was arrested by the operatives of the EFCC upon landing in Abuja. In the video, disgusting opulence was on display, exposing very expensive automobiles that included such exotic models as, Rolls Royce, Bentley, Maserati, Lamborghini, Ferrari and Mercedes Benz. Add to these, expensive wristwatches costing multi million naira for the kingpin, his wife and his kids. There was reportedly even a Rolex wristwatch for a seven month old child. Not left out were designer wears for the family including designer wears like Gucci, for the little baby. There were also on display several first class tickets for himself and family.
There is no doubt that these people have been "chopping money" like some of my "brothers" would say. Our issue today however, is not whether the men would be found guilty or not as we believe that between the EFCC and the judiciary, they would have their day in court. We are more concerned about the extravagant lifestyle and heavy spending and what the alternatives could be and how the economy could be affected. In Nigeria, the 'money miss road' phenomenon has hit the main street. Over the years, many Nigerians have made loads of money on easy street. There is little appreciation of the value of money and with the right kind of connections, it was always easy to make more money. For many of these people who simply rake in money without sweat, they spend like there is no tomorrow and without any consideration for the overwhelming majority of Nigerians who wallow in abject poverty and misery.
In the capitalist system, which Nigeria also practices, it is necessary to consume so that production will continue to take place. However, the truth is that there must be a method to the manner in which such consumption takes place or it will not be a catalyst to economic growth. In fact the Nigerian situation is very unique, because there is such a huge income gap and in the face of all these, there is also a high level of conspicuous consumption. The typical high class Nigerian consumer does not create demand for the goods and services that will stimulate the local economy. Instead, they support foreign economies and even depress demand for local products. Compare these men with some of the richest men the world can boast of who lead a modest and simple life. The last time I checked, the richest man in Africa, name withheld, has no Rolls Royce nor Bentley to his name. He has lived in his modest house in Lagos for several years. His lifestyle has not changed in spite of the continuous improvement in his net worth. He even has no house in the Capital city of Abuja as he believes he does not need one. He, however, will rather invest in expanding his business and diversifying to new business ventures, creating jobs and adding to the productivity of the nation.
Now, let's look beyond Nigeria and learn how some rich men "chop their money" elsewhere. Warren Buffet is known as one of the most successful investors in the world today. The 88 year old whose fortune is estimated at $88b started investing at the age of 11. Today, he is the third richest man in the world. He lives a frugal lifestyle devoid of big spending and extravagance. He lives in the house he bought in 1958, a modest five bedroom house he bought then for $31,500.00 in Omaha, Nebraska. The house is worth over $652,000.00 today. He drives himself to work in his gold-coloured Cadillac he bought for $44,600.00. Everyday, he wears one of the 20 suits designed for him by his friend Madam Li and delivered free of charge. Despite being one of the largest investors in Apple Inc, he doesn't use an iPhone. Instead he uses a flip phone, remember the days of the "nought nine nought" which he joked was lent to him by Alexander Graham Bell and he forget to return it. The flip phone, a Samsung phone model SCH-U320 is sold for $20. He spends $3.17, yes, you read that right, just about N1000.00 equivalent for breakfast at MacDonalds everyday. In between the 18 years from 2000 to 2018, Warren Buffet has spent a whopping $46b supporting charitable causes around the world. He has two sons and one daughter who would inherit $2b each upon his passage while the balance of his money will be passed on to charity. He does have a private jet though, just for the convenience of moving around and not necessarily luxury. He employs close to 400,000 people.
From an economic point of view, consumption is encouraged for the economy to grow. Theoretically, it is consumption that gives rise to production. No production would happen if there is no demand for it. Once consumption increases, it is assumed that production would also increase to take care of the increased demand. By so doing, capacity utilisation would increase, jobs would be created, salaries and allowances will go up, which would in turn generate more consumption and create more jobs. As production increases, government revenue will improve through inflows from company, and personal income taxes. Sales and consumption taxes would also boost government revenue. The economy would stabilize and operate optimally. This theory is true to some extent. The underlying assumption is that the economy which had attained full employment also known as equilibrium, had gone into a crisis necessitated by reduction in consumer spending.
Under this assumption, the economy would need some stimulants to improve consumer spending to enable the economy attain equilibrium as quickly as possible. From that point of view, stimulating spending is not necessarily bad. However, it must be noted that this is not a normal situation but a short term corrective action. That is the logic behind quantitative easing, the economic stimulus package of $4.5t implemented by President Barrack Obama from December 2008 which helped pull the US economy out of recession. The action was meant to put money in the hands of consumers to encourage consumption and stabilize interest rates. In the normal cause of events, accumulation of capital is a major action of economic players that would give rise to a stable economy. Note also that capital accumulation should not be for the sake of it or for saving in the banks, but for the creation of economic activities and generation of employment for economic growth. I believe that it is on the basis of this, that the second quote above by Dorthy Sayers becomes very expedient. It even becomes more imperative in an import-dependent economy like Nigeria's. The questions that need to be answered include what exactly are we consuming? Who makes what we are consuming? How many jobs are created in the consumption economy? Are we not simply exporting jobs and importing poverty into the country? What happens to the local currency as we continue with our current habit of conspicuous consumption? How have we institutionalised our wealth such that we won't consume today and be consumed tomorrow?
Yours truly cannot pretend to have all the answers nor even relevant answers to the above posers, but we all need to begin to think seriously about these issues if we want an economy that works for us. Such an economic model must have its philosophical basis and also must take into consideration our own peculiarities and circumstances. And we actually don't want anyone to get us wrong, we are by no means condemning anyone who decides to use his money the way he wishes. It is their right to do so. We are just looking at alternatives to the so called "lifestyle of the rich and famous" that eventually depletes their resources rather than building for tomorrow. Drawing from the lifestyle of the yahoo boy described above, one would notice that neither the cars on which he spent hundreds of millions, nor the wristwatches, designer wears and iPhones adds anything to the economy. None of them is made in the country, or creates jobs within the local economy. None imparts on the domestic economy except by way of putting pressure on the foreign exchange market to pay for the expensive goods coming from abroad. None creates jobs in the local economy and none adds to the GDP of the country. These goods are just to show off and like Bucchin said in the first quote, the sophisticated goods are all carefully engineered to deteriorate after a predetermined period of time. This is referred to in economics as "accelerated obsolescence". As the consumer is getting used to the equipment, newer ones are released with the owner of the old model feeling that his very expensive equipment has become outdated and will rush to trade in the old model for fractions of the original cost or outrightly junk them for the newer models. In a lot of cases like electronic devices including cell phones, users do not use close to 30% of the functionalities of the devices. Meanwhile, factories are kept open in China, Europe and America creating jobs for such economies as we continue in our unbridled consumption.
It is therefore our considered opinion that those of us who have become wealthy should not focus on spending such wealth on conspicuous consumption, but instead, we should think of how to invest in productive activities in the domestic economy to create jobs, substitute imports with locally made goods, fund research and developments either with the universities or independently, support charity work and generally build a self reliant and economically independent nation, under which we can even make more money for ourselves. We really don't need all the expensive cars, wristwatches, designer bags and shoes, phones and electronics. We need to think of how to produce them locally and who knows, we may be able to catch up with those we currently import these items from. We must acknowledge the efforts of some of our entrepreneurs who have in spite of all the odds, set up factories and are producing locally and supporting the economy. We, however, need to do more. Just like it is said, practice makes perfect. We are not unaware of the challenges of infrastructure and enabling environment as we had discussed them extensively in this column, but we must encourage our compatriots who have the capacity to seriously consider spending their money differently. We should not let our challenges hold us down.
Finally, the issue of 'Buy Nigeria' has once more become a front burner topic in the country. It is our duty to support locally made goods as that is one sure way of engaging more of our people in terms of productivity and pulling them out of poverty. The agricultural and manufacturing sectors of the economy should be the major beneficiaries of this campaign and have the capacity to suck up a lot of our young unemployed population and boosting economic growth beyond the present lackluster figures.