Conscientious Consumerism?

Walmart in Beijing
from galaygobi at Flickr's Creative Commons

I read an interesting thread over on Mr. Money Mustache's forums the other day, debating the merits of supporting small businesses versus saving money. The debate is framed as such: some people purchase in a utilitarian way by shopping for the things they want at the places that offer the best price or value, and some people purchase in conscientious way by supporting local, small, or moral businesses. All of us probably do some mix of both, but the dichotomy is useful for understanding different approaches to what we do with our dollars. Are we more concerned with finding the best value for our dollar, or some different kind of value?  And which approach is better for us personally, and as a society?

David McRaney brilliantly writes about the gaps in our thinking, the places where we don't realize that we are not so smart. His post on selling out rang true to me, and scared me, too, like everything he writes. He says the things we buy might not just be the things we want at the best price or a reflection of our values. But, rather, they are a reflection of the kind of status we want to show to the world. The things we buy are the physical manifestation of our desire to seem cool.

It's likely that we shop for specific things and at certain stores, not so much because of moral reasons, but because of the status our purchases convey. You're one kind of person if you get Old Spice deodorant at Walmart, and a different kind of person if you shop at Nordstroms for John Vavartos Artisan deodorant, which "embodies the lost art of craftsmanship while exuding a modern edge."  

Because humans need to establish their status in some fashion and we live in a consumer culture, no one is immune, not even us frugal minded who read personal finance blogs for fun. For Mustachians, I gather we get a lot of pride and, in a way, a weird subculture status, from making 'smart' purchases, especially when contrasted with face-punch-deserving foolish purchases like a leased Ford F-150 or a cappuccino. My bicycle and my hatchback and my Costco membership are not just objectively logical purchases chosen purely for their frugal & utilitarian value.  These are things that tell the world that I'm not a dummy when it comes to money.  They show that I'm smarter and, probably, richer than the average bear. Hooray, status!

But it's not all-frugality, all-the-time, either.  An occasional splurge for hand-crafted, locally-sourced, 'artisan' goods made by over-educated twenty-somethings in the cool part of town (and placed into a pannier, of course) gives me a nice, well-rounded persona as someone who is enlightened and cool, but not an underemployed hipster.  I am frugal, but not cheap or crazy. I'm not dumpster diving or foraging for nuts, like some weirdo, after all. I don't purchase much, because I care about the environment and I care about financial independence and I don't want to be burdened with stuff.  But when it's warranted to buy something, I buy quality and support my community at the same time, because, hey, my wife and I are the kind of people who care about supporting artisans whose life calling was to make organic cosmetics from fruit.  My stuff and where I bought my stuff reflect my choices, and therefore illustrate who I am. And, of course, that makes me cooler than you.

But if McRaney is right and I'm hardwired to seek out social status via the selection of the things I buy, and my motives are probably less altruistic than I realize, then what, exactly, is a boy to do?  And isn't this all a bit depressing?

Laura Vanderkam convincingly argues in her excellent book, All the Money in the World, that certain types of purchases or investments can bring us more happiness than others. For her, investing a small amount in a local start up via kickstarter was more satisfying than a large purchase of an S&P 500 ETF, even though the latter would almost certainly bring a better return for her personal finances. Similarly, she posits that the types of purchases we make have the potential to bring us more happiness. The $5,200 spent on the average engagement ring might bring more happiness if spent on fifty-two weekly $100 date nights over the first year of a young couple's marriage, for example.  Also, frequent small purchases bring more happiness than large infrequent ones and buying experiences makes us happier than buying stuff.  Interestingly, giving brings us more happiness than spending, too, which seems intuitive and not true at the same time.

So instead of philosophizing about where we ought be making our purchases, maybe we ought to give more thought to what we're buying (or giving) and how often.  Vanderkam offers some good advice on this front.  We should stop spending so much time and money on big things that don't bring us much happiness, like houses and cars (and the commutes that come with them), and spend more money on frequent little things that do, like charity and date nights and maybe even some three dollar lattes.  Just be sure not to buy them at Starbucks.