Chapter 5 -The Heritage of Abundance

Objectives

After reading this chapter, students will be able to:

1. Understand how and when Americans became consumers as well as producers.

2. Identify the difference between material success and materialism.
3. Understand the role of advertising in creating a consumer-driven marketplace.
4. Discuss the role and challenges of technology in the context of the consumer
marketplace.
5. Consider the future of American abundance in changing economic conditions.

Overview

America has been blessed with an abundance of natural resources which, combined
with a strong work ethic and the motivation of generations of hard-working
immigrants, has led to our becoming the wealthiest nation in the history of the
world. Americans are prodigious producers and consumers, and advertising plays a
powerful role in our consumption of material goods and on our lifestyle. The
abundance of material goods has come with a price however -- we produce far more
garbage than other countries, and we wonder whether we can continue our rapid
pace of development so that all Americans will have an equal chance in the future at
getting their "share of the pie."

Keep in Mind...

The advertising industry is such a fixture of our economic, political and social life that
it has become an institutional system on a par with education or local government.
The rapid changes of technology in the latter half of the 20th century through today
have given us great opportunities to streamline productivity but also presented
challenges in creating a digital divide -- between those who have access to the latest
technology, and those who do not.

Lecture

Chapter 5.1. A History of Abundance. Pages 94-95.

The great natural resources of the US and its abundant material wealth have been
major factors in the development of the American character. What was the great gift
of nature to the US? When the first settlers arrived in the 1600 and 1700's, they
found a rich land of completely undeveloped natural resources unlike anywhere else
in the civilized world. These resources, combined with the beliefs, determination
and hard work of the early settlers led to tremendous prosperity.
Neither wealth nor social position were determined at birth, and the idea of equality
of opportunity made the level of material success of both rich and poor far less
certain. At any time fortunes could be reversed; the wealthy could become poor and
vice versa. Hence, the idea of acquiring and protecting material goods became a
matter of survival in an unpredictable world, and not a matter of greed.

Alexis de Tocqueville observed that the effect of material success on American life
could lead to materialism becoming a moral value in itself, rather than a means to an
end. This is a question that Americans have pondered since de Tocqueville so
perceptively raised it 170 years ago. In fact, Americans see the acquisition of
material possessions as a sign of a reward for hard work,and an outward symbol of
success.

We have seen that material success is considered an important American virtue,

although most Americans would not consider themselves to be materialistic. Material
success has also been one of the compelling reasons for generations of immigrants
to endure the hardships of leaving family and familiarity to try their luck in a foreign
land.

Chapter 5.2. From Producers to Consumers: Pages 95-96.

During the twentieth century Americans, who had always been producers of goods,
began to think of themselves as consumers rather than producers? Why? The simple
answer is the advent of mass advertising, made possible by the invention and spread
of the radio in the 1920's, television in the 1950's and since the 1990's, the internet.

With radio, companies learned that they could pay for (or sponsor) a program heard
by millions of listeners and potential consumers to convince them to buy their
products. When mass media became visual, with the introduction of television, and
then color television in the 1960's, then both mass entertainment and mass
advertising were off and running, reaching millions of viewers at one time. There are
three important effects resulting from this: 1) Advertising in itself became an
institution with great impact on the American lifestyle; 2) Advertising sponsors
began to have control over the content of the programs that they sponsored, and 3)
advertising spread to the non-profit world of political campaigns, public service
announcements, and charitable appeals.

The following link gives a review of the history of advertising in the US from 1880
through 1920.

How many companies or brands existed in these years that still exist today? (This
will be one of your assignments).

http://scriptorium.lib.duke.edu/eaa/timeline.html

Chapter 5.3. Americans as Consumers: Pages 96-97

American consumers are particularly drawn to four qualities in the products they
buy:
1) comfort, 2) cleanliness, 3) novelty and 4) convenience. I would add a fifth
category, even though your text does not mention it: size. Americans like things that
are large -- Big Macs, cars, houses, for example. Pay attention to the advertisements
you come across in magazines and on television. How many of them try to appeal to
these qualities? What emotions are they trying to evoke? Find an advertisement that
speaks to each one of the four qualities mentioned above.

While convenience may be a prized quality for consumers because it leads to time-
saving in many areas (microwaves, fast foods, dishwashers) it also has many
drawbacks. Do time-saving devices give us more leisure time to spend with our
families? Or do we just end up eating fast food in our large cars as we rush from
place to place buying more stuff along the way? Once again, this appears to be a
long-standing dilemma for many Americans, observed by De Tocqueville as far back
as the 1830's: He noticed an American paradox where Americans were so busy
working to acquire comforts and conveniences that they werre unable to relax and
enjoy leisure time when they had it. (If you don't know the word paradox, please
look it up!)

Chapter 5.4. The Abundance and Challenge of Technology: Pages 98-100.

It is only in the past 30 years that TV has expanded beyond the original three
broadcast networks, ABC, CBS and NBC. When I was growing up that was it!
Everyone watched pretty the same shows, and that gave the networks and their
advertisers a huge captive market. There was no competition for the entertainment
dollar because there was no cable TV and no internet. Now these same networks are
scrambling to keep their audience and their advertising revenues have dropped
tremendously as there are so many other places to advertise. In many cases, the
major networks have had to cut back on their television programming, affecting the
number of advertisements that consumers will see, and hence the potential number
of consumers for any given product. For example, The Wall Street Journal had a
front-page article on October 19, 2006 entitled, "NBC Universal to Slash Costs and
News, Prime-time Programs," available at the following link:
http://online.wsj.com/article/SB116122516063297321.html
While this refers to one network, all traditional entertainment providers are
challenged by the mounting competition for the consumer's advertising dollar.

What are the issues raised by new technologies and their proliferation? We can break
these down into three categories:
1) The merging of technology providers allows a single company to control and
deliver TV, cell phone, cable, and internet service to consumers. While this gives
consumers more options and lower costs, it also gives suppliers more control over
what consumers will see.
2) What is the effect of technology on children? We have heard complaints for
some time that children are spending too much time in front of TV, computer and
gaming screens -- exercising less and exposed to levels of violence and sex that
seem to get more and more explicit.
3) What is the effect of exploding technological innovation on people who can't
afford to participate? This is called the digital divide and it divides Americans who
own computers from those who do not. It especially divides schools and children who
have easy access to technology from those who don't.

Chapter 5.5. The Future of Abundance: Pages 100-102 Americans have thought of
our economy as an ever-expanding pie. Future generations would not have to worry about
getting their share of the pie, because the pie would always be bigger, and our slices
would never have to get smaller. This may seem like a simple analogy, but it has worked
for the past 300 years. However, In the past 15 years the economic structure of the
country and the world have changed. Globalization has affected the infra-structure of the
manufacturing sector so that many high-paying jobs have been replaced by new
technologies or outsourced overseas. As a result there has been a shift in the fortunes of
the middle class whose traditional high-paying hourly wages and good benefits are in
danger of shrinking or being eliminated. Instead of expanding, the traditional middle
class is shrinking (think of the auto industry). The following is an article from The
Boston Globe (October 2006) on how the link between productivity and wages has
broken and is affecting the average worker.
http://bostonworks.boston.com/news/articles/2006/10/10/workers_do_more_but_wages_fall_short/

Summary

What does the future hold? Without a crystal ball, no one can know, but Americans
are waiting to see whether their long-standing optimism about the future being
better than the present will hold true.

On the positive side, people have become far more aware of our physical
environment and the effect that our habits of consumption have had on the
environment nationally and globally. This may spur additional American creativity to
solve problems raised by the effects of so much abundance. After all, we do generate
and have to dispose of more trash than any other industrialized nation. (7 lbs of
garbage per person per day.)

On the negative side, Americans have traditionally relied on optimism and a sense
that life will only get better for succeeding generations. If this no longer holds true,
then one of the main values of the country will be shaken to its core.

Please re-read the chapter and do the exercises on pages 102 - 113. You should find
at least 3-4 more values or value statements to add to your list, such as "American
abundance" and "the ever-expanding pie".

Web Resources

1) The following link gives a review of the history of advertising in the the US from
1880 through 1920.
How many companies or brands existed in these years that still exist today? (This
will be one of your assignments).
http://scriptorium.lib.duke.edu/eaa/timeline.html

2) While this The Wall Street Journal article refers to one television network (NBC),
all traditional entertainment providers are challenged by the mounting competition
for the consumer's advertising
dollar.http://online.wsj.com/article/SB116122516063297321.html

3) The following is an article from The Boston Globe (October 2006) on how the link
between productivity and wages has broken and is affecting the average worker.
http://bostonworks.boston.com/news/articles/2006/10/10/workers_do_more_but_wages_f
all_short/

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