Lesson 3
The Market System and Consumerism

"Students should examine the operations of markets. They should learn how prices and the quantity demanded and supplied are determined in the markets for goods and factors of production."

California History/ Social Science Framework


As we approach the year 2000, Americans seem to be consuming more and more material goods. Americans constitute 5% of the world's population but consume over 25% of the world's resources. To make our economy sustainable, we need to evaluate our consumption habits, what influences them and how to reduce our consumption. Advertising plays an enormous role in creating and sustaining the demand for non-essential goods. Discussions of the role of the consumer should introduce this modern aberration of the market economy and challenge students to consider the influence and ethics of advertising.


This lesson is designed to get students to think critically about their own comsumption habits and the role of advertising in dictating our needs. It encourages them to be more conscious of the influence of advertising, their consumer choices, and empowers them to change their consumer habits to have a better quality of life. It also encourages them to recognize the deeper needs for creativity, community and meaningful work that cannot be met by the instant gratification of material purchases.


Students are asked to watch television with a critical eye towards advertising. They record the different strategies for selling products that they observe, paying close attention to the values that the commercials appeal to, both explicitly and implicitly. They then gather in groups of 4 to develop their own 30 second commercial for a chosen product. Finally, students are given a set of questions to work on in their groups that ask them to think critically about the idea of creating demand and the degree to which consumerism is a cornerstone of our modern economy.


Students will keep a detailed record of what they buy, consume or use for 1 week. After this week, students will assess what they consume. Thjey will determine shich items they need and which they could live without.


Students are asked to read an article entitled, "Consumerism vs. Culture". First, however, they are to predict the content of the article from the title. While reading silently to themselves, they should list the aspects of culture that the author feels are threatened by consumerism on one side of a sheet of paper, and their response on the other side. Students will then share their outline and responses with other students as a basis for discussion.


Most people agree with what classical economists have assumed for decades: that the market with its tendency to come to an equilibrium point between the needs of suppliers and the needs of consumers, will provide for the common good. Implied here are actually two assumptions that need to be challenged.

The first is that the motor of the whole system is consumer need, that products will come and go on the market according to the needs of the people and their willingness to pay a price that will adequately reimburse the producer. Not to be ignored, in the 20th century, is the desire on the part of producers for ever larger profit margins. In the late 19th century American industrial productivity began to outpace the demand for consumer goods. In order to find markets for their products, industry focussed on finding new markets overseas and bolstering the demand for goods here at home. This latter venture was the birth of modern advertising. Consumer needs are still important, but with modern advertising, producers have begun to realize that those needs can be created. People can be manipulated into thinking that they need to buy a product. The question of whether this is ethical or sustainable arises. The result is a whole society of people conditioned to think that "more is better" and that happiness can be attained through the acquisition of material things.

A 1998 PBS documentary, Affluenza, showed how American culture has become focused on excessive consumption of material goods as the way to happiness. The show presents a strong case that Americans are not achieving happiness this way. They humorously define "Affluenza" as "the bloated, sluggish and unfulfilled feeling that results from efforts to keep up with the Joneses; an epidemic of stress, overwork, waste and indebtedness caused by dogged pursuit of the American Dream [i.e. material wealth]; and an unsustainable addition to economic growth [more and more consumpiton]." The webiste for this program has many ideas and even lessons for teachers to use. It's worth a good look (www.pbs/kcts/affluenza.

The second assumption of the classical model of economics is that 'the common good' pertains primarily to material needs: food, shelter, transportation etc. But this fails to take into consideration such things as the environment, future generations, and human fulfillment. A market that, for instance, encourages planned obsolescence ( deliberately making goods that quickly go out of style or no longer function in order to assure profits both on the original purchase and on replacement purchases in the future) may be pumping out goods that consumers will buy, and from which producers can profit, but it is also contributing to the overloading of our landfills and the depletion of finite natural resources. It contributes to what Lester Brown aptly names our 'throwaway society.'

A 1998 Master Card Ad suggests that while ther are some things money can't buy, there is also so much that can be bought to make you better or happier. The ad ends with the saying, "There are some things money can't buy. For everything else, there is Master Card."

Clearly, the underlying message in much of modern advertising is precisely that you can buy happiness. If you are lonely, or you are feeling poorly about yourself, a simple purchase can bring you contentment.

Questions to Explore:

What are the elements of a product that make it valuable?

In what ways and for what reasons might people overconsume?

How does per capita consumption in the U.S. compare to that in other countries?


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