Materialistic Values and the Current Economic Crisis

Tim Kasser

moneyMany factors contributed to the current economic crisis, but three seem primary: the deregulation of the finance industry, the extremely risky loans banks made, and the desire of consumers to take out these loans to pay for large homes and/or to acquire other possessions. The research my colleagues and I have been conducting over the last 15 years suggests that materialistic values probably played a role in encouraging each of these three factors.

Studies show, for instance, that when citizens are highly focused on goals for making a lot of money, having many possessions, and attaining high status, nations pursue highly competitive forms of capitalism with little governmental regulation (Kasser, Cohn, Kanner, & Ryan, 2007; Schwartz, 2007). Thus, materialistic values are part of the ideological and institutional package that encouraged politicians and other power-brokers to promote the economic policies that contributed to the current crisis.

Other studies show that when under the sway of materialistic values, people are more likely to make questionable ethical decisions and to manipulate others so as to obtain the profit that they desire (see Kasser, Vansteenkiste, & Deckop, 2006). Thus, materialistic values contributed to bank employees making very risky and highly untenable loans to customers who in most cases could not actually afford the loans.

The research also makes it clear that people who care a good deal about materialistic values consume more (Brown, Kasser, Ryan, & Konow, 2008); high levels of consumption require more money, and often more debt. Thus, materialistic values influenced the willingness of consumers to take on such risky loans.

So long as materialistic values continue to dominate our economic and political systems, and our personal lives, we can expect that similar crises will recur. This analysis therefore suggests the need for re-organizing cultural systems and personal lives around values that oppose materialism. Research on values and goals suggests that the aims in life that oppose materialism include personal growth, close interpersonal relationships, and contributing to the wider community (Grouzet et al., 2005). These “intrinsic” values are also known to promote greater well-being, more pro-social behavior, and higher levels of ecological sustainability. Thus, any reorganization would do well to be formed around these intrinsic values (Kasser, 2006).

For example, society could focus on “time affluence” rather than “material affluence”, taking the focus off the belief that money and consumption are the most important pursuits in life. Business could move from a shareholder to a stakeholder model, supporting cooperative enterprises for which profit is not the bottom-line in all decisions. Government can create alternative indicators (such as those proposed by Redefining Progress, the Kingdom of Bhutan, and the new economics foundation) that aim not to maximize the extent of economic exchange in a nation, but instead consider other values as well. And society could ban from public spaces and begin taxing the many advertisements that continually propound the worth of materialistic values.

If our nation had already been pursuing these types of policies, economic growth imperatives may not have been so primary to politicians, profit may not have been so necessary to banks, and consuming may not have been so desirable to citizens. Changing policies to minimize, rather than maximize, materialistic values could help avert similar crises in the future, and might promote greater equality and environmental sustainability along the way.

References

Brown, K. W., Kasser, T., Ryan, R. M., & Konow, J. (2008). Materialism, acquisition, and unpleasant affect: A multimethod investigation. Manuscript in preparation.

Grouzet, F. M. E., Kasser, T., Ahuvia, A., Fernandez-Dols, J. M., Kim, Y., Lau, S., Ryan, R. M., Saunders, S., Schmuck, P., & Sheldon, K. M. (2005). The structure of goal contents across 15 cultures. Journal of Personality and Social Psychology, 89, 800-816.

Kasser, T. (2006). Materialism and its alternatives. In M. Csikszentmihalyi & I. S. Csikszentmihalyi (Eds.), A life worth living: Contributions to positive psychology (pp. 200-214). Oxford: Oxford University Press.

Kasser, T., Cohn, S., Kanner, A. D., & Ryan, R. M. (2007). Some costs of American corporate capitalism: A psychological exploration of value and goal conflicts. Psychological Inquiry, 18, 1-22.

Kasser, T., Vansteenkiste, M., & Deckop, J. R. (2006). The ethical problems of a materialistic value orientation for businesses (and some suggestions for alternatives). In J. R. Deckop (Ed.), Human Resource Management Ethics (pp. 283-306). Greenwich, CT: Information Age Publishing, Inc.

Schwartz, S. H. (2007). Cultural and individual value correlates of capitalism: A comparative analysis. Psychological Inquiry, 18, 52-57.

PsySR member Tim Kasser, Ph.D., is an associate professor of Psychology at Knox College in Galesburg, Illinois. He is the author of The High Price of Materialism (MIT Press, 2002) and co-editor of Psychology and Consumer Culture (APA, 2004). Tim can be reached at tkasser@knox.edu.

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2 Responses to “Materialistic Values and the Current Economic Crisis”

  1. Judith Margerum Says:

    I hope this article and Tim’s books are sent to President-elect Obama and his advisory team. I believe deeply that we need to redefine success and happiness because materialism does not make people feel fulfilled. Our entire country needs a new message about what is important in life….Thanks for the succinct article.

  2. Sasha Daucus Says:

    Thanks, very interesting. Also just read support for what you say in the New Atlanticist blog, Islamic Banks Surge, Thanks to Financial Crisis.


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