Consumerism Explained: Definition, Economic Impact, Pros & Cons

To better understand the concept of Consumerism, let's first under what a consumer is. The consumer is the final person who consumes any goods or services.

Consumerism is an important concept, a protest, and a movement that is run by any individual, organization, or government.

For example, if a government or a legal authority runs a movement, there is always some specific reason for running such a protest or movement. Similarly, the reason behind Consumerism is to protect the consumer's interest, to think about the consumer's welfare, and to provide a legal table to solve the consumers' problems legally by providing them respective solutions, giving the consumer their rights, etc. To cover all such aspects or concerns, the concept of Consumerism was brought.

Therefore, simply put, it means that Consumerism is a movement or a protest that talks about the welfare of consumers at different stages. It is a fight to protect consumers from their exploitation.

History of Consumerism

The concept of Consumerism was first brought up in the US after the consumers held a protest, and because of that protest, this concept of Consumerism was introduced as the consumers' right. The protest was primarily focused on the consumers' welfare, which is why this concept was named Consumerism.

Prior to the protest, there was no legal provision or act available for the consumers. Therefore, the consumers were widely exploited by various vendors and businesses. So, there was a protest movement initiated by various public and public organizations.

Consumerism talks about business, government, or organization that needs to satisfy the consumers' needs and protect the consumers' rights. You must have already heard about the consumer protection Act 1986, which came into effect to protect the rights of consumers. However, the basis of this act was Consumerism.

Need for Consumerism

In simple words, Consumerism is a social movement that aims to protect the rights of the consumers and their powers from the sellers.

For instance, many consumers do not even know that they need to check the date of the manufacturing of the product before buying, and therefore the sellers often exploit them (to the consumers) by selling low-quality goods or even expired products. The consumers should know that if the buyer sells expired products, they may file a case against the seller. But many of the customers do not even know about their powers and rights; therefore, making the consumers aware of their rights and power is also part of Consumerism.

The spread of education, especially higher education or knowledge, has also made people aware of their rights as a consumer over time. Still, the main motive or goal of Consumerism is to make consumers aware of their rights and power. The main objective of the protest was to make consumers aware of their rights and power on a large scale across the world.

The movement basically became successful with the introduction of the Consumer Protection Act. The movement and the Consumer Protection Act are related to each other as the movement was about making the consumers aware of their rights, whereas the Consumer Protection Act talks about the rights and power of the consumers. This movement also introduced the concept of consumer rating to show the satisfaction rate. End users got powers of rating for products and services, which proved beneficial for themselves and by themselves.

Consumer rating is when a customer rates a product or service after using it. Ratings can have multiple categories based on a number of factors, such as: Did the product meet a consumer need? Was the product pocket friendly? Is the product available everywhere?

Importance of Consumerism

• Consumerism is important because it helps develop a good relationship between producers and consumers. When the producers know the needs of the customers for satisfaction, then they can produce or make the products accordingly. Also, if the producers successfully satisfy the consumers, then a good relationship can be built between the consumers and the producers. This ensures the increased selling of other goods and services from the corresponding producer by the respective consumer.
• It is also seen that the consumer gets the information about the correct product and the respective price. You must have seen many advertisements or demos where you are shown the product and asked what should be the price of the product. All this is the effect of Consumerism.
• The producer will be compelled to avoid unfair trade practices. Earlier, the sellers used to charge different prices from different customers for the same product. For those who used to be relatives or friends of the seller, the seller used to sell their product at lower prices, whereas to other customers, they used to charge higher prices. This unfair trade practice is not usually seen, but still, there are some cases in which such unfair trade practices occur. But, Consumerism has helped a lot in reducing such unfair trade practices.
• The consumer organization will maintain liaison with a producer on the one hand and, on the other hand, with the government authority. Liaison means that Consumerism helps maintain a good relationship between producers, the government, and consumers.
• Consumerism says that the customer is king, and it is very important to take care of the welfare of the consumers and satisfy their needs. It provides a legal redressal mechanism to protect the rights of consumers. Consumer courts are an example of such a legal instrument.
• It also increases economic output and creates jobs. As the needs of the consumers never end, many new products enter the market, which ultimately increases the economic output and many job opportunities as new industries enter the market.
• Consumerism benefits not only the consumers but also the companies selling their products to end users. As the demand and needs of the consumers' increase, the companies will try to fulfil the demand, and they will produce more, and the consumer will buy those products, which consequently helps the companies earn wealth.
• It also promotes competition, which is a very important component of any market and for consumers. Because of the presence of competition in the market, each company will try to make products better and more affordable so that the customers choose their products over other companies.
• It allows for a large variety of goods and services. Companies start offering a variety of goods and services so that they can satisfy all the needs and demands of the different consumers, and because of this, the customers also receive what they were expecting.
• Consumerism also improves the quality of life of people as consumers start buying luxury products within their budget so that they can live without any hassle.

Negative Impacts of Consumerism

• Consumerism has a negative role in increasing pollution. As the companies start producing products in large numbers and many new companies also enter the market, because of the making of products and other activities involved in making a product, a lot of waste is generated and pollutes the environment.
• It is also a major contributor to resource depletion. To produce more products, more resources will be required, and because of that, after some time, it will lead to a scarcity of resources. If there is a scarcity of resources and the demand is high, then the product prices will also get higher, causing inflation in the market.
• It also leads companies to develop low-quality products. Many companies who have established themselves in the market and have a large customer base may produce products of low quality, and because of that, the life of the product also gets reduced. Then, in such a case, the customers are left with no other option but to buy that product again and again, following the respective brand unconditionally.
• Consumerism also promotes poor labour standards and pay for workers. When companies' products are in high demand, they produce more products but within the end users' budgets; they do so by keeping production costs low. As a result, companies do not pay the labour sufficient or reasonable wages, and because of that, the quality of the labours' standard fall, and they sometimes suffer.
• It does not necessarily lead to increased happiness beyond a certain point. Consumerism states that consumers buy luxury products that make them feel happy, but this is not always true. The possession of material goods is only one aspect of happiness, and many other aspects play a major role in a person's happiness. Happiness is more about peace of mind and good family life.