Shiny Objects: Why We Spend Money We Don’t Have on Happiness We Can’t Buy

Texas Economy occasionally chats with business and marketing faculty across Texas about books they’ve written about economic matters that touch Texans.

Baylor’ Dr. James Roberts has published extensively in the area of consumer spending, investigating the role credit cards, money attitudes and materialism play in compulsive buying and spending among college students and non-student adult populations (Baby Busters and Baby Boomers). Roberts owns Roberts and Associates Bull’s-Eye Marketing

His latest book, “Shiny Objects: Why We Spend Money We Don’t Have on Happiness We Can’t Buy,” looks at how consumers have fallen in love with possession obsession and how it’s not too late to kick the habit.

Q: What was your inspiration for the book?

A: “Shiny Objects” has really been a life-long work in progress. I grew up in a family that recycled and where my brothers and I were expected to earn money for the things we wanted. Outside of the basics of food, shelter, underwear and socks, we worked to pay for everything else. I worked cutting grass and trees, and doing odd jobs for an older gentleman by the time I was 11 years old. I also worked 80-hour weeks at the end of each summer when the corn came in for processing. It was at these and many other similar jobs that I learned the true value of money. Along the way I may have complained about not having what others had, but it was a lesson that has stayed with me to this day.

After college, I worked as a stockbroker and found that a life spent solely in the pursuit of money was not for me. A later stint in the consumer loan division of Norwest Banks opened my eyes to the devastating impact poor money management could have on individuals and their families. For the past 15 years I have studied the psychology of consumer behavior including the topics of materialism, compulsive buying, and credit card abuse. I have always been fascinated with what many might call the dark side of consumer behavior.

Q: Why do we buy things?

A: Buying things to increase our happiness is the primary reason behind most of our purchases. The Greek philosopher Socrates felt that all human activity has as its ultimate goal to increase one’s happiness. Retail therapy is an often-prescribed remedy for what ails us. But the “rush” we receive from shopping and buying quickly fades away and, like a drug addict, we are compelled to purchase more and more stuff to get our fix. Madison Avenue spent $131 billion in 2010 to convince Americans that happiness can be purchased online, at the mall, or from a catalog. What they neglected to tell us, however, is that it isn’t working. From 1970 - 2010 America’s GDP (largely made up of personal spending) has been on the rise with only small dips in spending during recessions. But, as consumers we suffer from short-term amnesia, as soon as the economic clouds lift we return to our profligate spending ways.

Q: How did our culture draw a connection that buying “shiny objects” leads to happiness?

A: It really wasn’t until the early 20th century that brands evolved and, because of the advent of mass production, consumers started to have a wide choice of products to choose from about the same time. In chapter 11 of Shiny Objects, entitled “Weapons of Mass Consumption,” I talk about how industry has spurred on our spending as consumers. It was in the 1920s that General Motors introduced the annual style change. This is something I call perceived obsolescence. The year of a GM automobile could be clearly discerned by the body style that made it easily recognizable as last year’s model or the newest GM had to offer. Long gone were the days of one Ford looking like another for year upon year. In fact, Henry Ford only gave in to the idea of annual style changes reluctantly and only after GM had stolen the lion’s share of the market with newly styled autos every year. The race was on.

Another weapon of mass consumption is planned obsolescence. This was the simple but “ingenious” idea of making products that were designed to break down after a specified period of time. Products were manufactured with a “death date” at which an integral part of the product would die a premature death. And, as we all well know in today’s technology driven society, when most products break down they can’t be fixed, or are too expensive to be fixed, or it’s cheaper to buy new. This “throw-away” ethic took flight in the 1950s and is thriving in today’s economy.

The connection between material possessions and happiness received a real boost after World War II. Referred to as the “Golden Age of Advertising,” the years immediately following WW II were the salad days of the advertising industry. The economy was shifting from war production to domestic production and there was pent-up consumer demand that developed throughout the deprivation of the war years. (Planned housing developments) popped up all over the country and with a purchase of a home came a need for home furnishings, appliances, cars, and a myriad of other products that told the world that you were a proud member of the newly burgeoning middle class.

Q: If not happiness, what instead do these “shiny objects” bring the consumer?

A:The graphs (reproduced below) tell the tale more eloquently than I ever could. The first graph shows an upward slope in our personal spending since the 1970s. With few exceptions (recessions), we have spent more money than the year before nearly every year since 1970. But it’s the second graph that delivers the punch line. Over the same time period (1970-2011), our happiness has flat-lined. We are no happier today than we were in 1970 despite an ever-increasing pile of material possessions. In fact, we are less happy. Today’s young people and adults are more anxious, stressed and depressed than their cohorts from earlier generations.

Happiness data was taken from the General Social Survey (GSS) of more than 50,000 people, presented here

Q: With so many Americans living paycheck-to-paycheck, is this a potentially financially disastrous economic trend for the consumer market?

A: Yes, it’s potentially devastating. The average Baby Boomer is hitting retirement age with an average of $50,000 in savings – this means half of this group has less than $50,000, which in itself is woefully inadequate to sustain someone through their retirement years. This is creating a welfare state where an increasing number of people will have to rely upon the government to provide them with healthcare and the funds necessary to eke out an existence during their “Golden Years”. Of course, this burden will disproportionately be placed on a smaller and smaller number of those who have sacrificed and saved for their retirements.

Q: And yet, on the other hand wouldn’t a movement away from such spending – a.k.a. decreased demand – also hurt the economy?

A: That’s a fair argument but maybe we need to look elsewhere for judging the health of our economy. An index of well being rather than the reliance on purely economic indicators might show that being happy and economically well off are not one and the same thing. Having the government ask individual consumers to bail it out of its financial troubles is akin to a mother lion eating her cubs to survive. Propping up a bloated economy by going into debt to spend is not sound fiscal policy. A wise man once said, “Growth for the sake of growth is the philosophy of the cancer cell.” Asking U.S. consumers to spend and eschew savings to keep the economy chugging along is a stop-gap measure at best that leaves consumers to fend for themselves as they reach retirement.

Q: Has the phenomenon of equating shiny objects with happiness been around as long as mankind, or have evolving advertising trends played a part in people getting more attracted to bling?

A: That’s a good question. Humans have venerated gold and other shiny objects for thousands of years. Egyptian kings and queens were buried with all of their earthly possessions because they thought this would give them an easier entrance into the next world. Shiny objects have always been a signifier of power – where we fit into the social hierarchy – so it is difficult to pin the blame on marketing and advertising because our love of money and material possessions has been around long before any real advertising existed. The current 24-7 marketing onslaught has just brought all of this excessive materialism and spending to a quicker head. On average, Americans watch 4-5 hours of TV every day and are exposed to approximately 2,000-3,000 marketing messages daily. We surf the Internet almost as much. What used to be called “Keeping Up With The Joneses” has now morphed into “Keeping up With The Gateses” as the Internet and other 24-7 media has broadened whom we use to make social comparisons. No longer do we simply peer over the backyard fence and see if we have as much stuff as the neighbors – who probably make about as much as we do – but now we have front-row seats to the lifestyles of the rich and famous and all their toys that makes a card-carrying materialist feel very inadequate. For example, I will never have a house as big as former NBA basketball star Shaquille O’Neal’s 70,000-square-foot behemoth. The current consumer culture’s days are, however, limited. With China and India (among others) jumping on the consumerism bandwagon, we simply won’t have the natural resources to provide the world with a never-ending supply of consumer goods

Q: What can a consumer do to limit such impulse spending?

A: It won’t be easy but consumers must learn to curb their impulses to spend, as I discuss in my book. As humans we have a tendency to place a higher value on immediate short-term rewards at the expense of larger, but more distant rewards. For example, buy those shiny objects today at the expense of our economic well-being in the future. Environmental programming (EP) simply means constructing an environment that encourages the desired behavior, which in this case may be to avoid impulse purchases and saving for your kid’s college and your retirement. This could be something as simple as using cash instead of credit cards to reduce your spending. Trust me – it works. Pay yourself first is another golden chestnut of advice when trying to increase your savings. This involves having money for retirement, the kid’s college, or whatever else you’re saving for taken out of your check before it ever gets into our greedy little hands where it evaporates almost magically. I have 25 “tweaks” you can perform on your environment to encourage responsible handling of your finances. Behavioral programming (BP) has to do with using rewards and punishments to encourage desired behaviors – the carrot or the stick approach to better living

Q: Why should someone buy your book?

A: Because it is an investment in your happiness. As long as we continue to pursue happiness through material possessions we will fall short of the goal. Spending more and more never gets us any closer to happiness it merely speeds up the treadmill. My book explains all of this and lays out a simple plan for achieving the true happiness we all deserve. Ultimately, “Shiny Objects” is a hopeful tale of how true happiness can still be found in a culture awash in material possession love.

Q: Do you have any particular stories of such spending run amok?

A: Do I ever. But oh where should I begin? Let’s begin with our love affair with pets. In 2011, Americans spent approximately $58 billion on their pets – that’s more than the GDP of all but 64 countries around the world. For those who suffer from math anxiety, $58 billion is equivalent to $58,000 million. The $58 billion spent on pets last year breaks down to an average of $456.69 per household or $193.33 for every man, woman, and child in the US. On a related subject, Americans spent $7 billion on Halloween in 2011 - $310 million was on costumes for our pets. This is no case of puppy love. A kindly grandmother in Colorado, a charter member of the National Cookie Cutters Collectors Club – I have attempted to update their image by referring to them as NC4 – owns 10,000 cookie cutters. A logical question of all of this, you might ask, is, “Where do we keep all this stuff?” Look no further than the storage unit industry for your answer. In 1984 there were 6,601 storage units in the US; by 2010 there were 46,500. To give you some perspective, there is enough room under the storage unit canopy to fit every man, woman, and child in the U.S.

Q: Finally, for a member of the Baylor faculty, such as yourself, would buying Superman socks like the ones Robert Griffin III wore at the Heisman ceremony count as a “shiny object” – or are they a fashion necessity?

A: For Baylor faculty and staff it’s in our contract (laughs). I suggest, however, that the Baylor faithful make their own Superman socks and put the money saved to good use.

To learn more about Roberts’ writings, visit his blog.