by Brett Stevens on April 28, 2017

Consumerism had a good thing going. We invented all of these cool gadgets for the home and personal care back in the 1950s, and as long as we had people, we could sell them and make a tidy profit.

But then consumerism took over the culture, as it always seems to do. Planned obsolescence became a thing; so did low-cost junk made abroad. And then people slowed down in buying because when everything is sort of worthless, why care much about what you buy?

No matter what option you choose — unless you have real luxury spending dollars like a billionaire — it will perform adequately and die within a few years, so there is no point investing much effort into the choice. Sort of like how the Soviet system faded away into heat death…

This follows a pattern we see in most business, and in fact everything in life: it starts out as a new idea that few understand, then gets accepted and the load of humans that it supports grows, which requires it to raise more money, which happens simultaneously with the acceptance of the new idea as part of normal life and thus a lowering of its margins. At that point, the business is in a death cycle.

As Plato pointed out, the same thing happens to civilizations. They start out idealistic, then deviate into materialism, at which point they cycle through aristocracy, military rule, business rule and finally democracy before self-destructing in tyranny. The point is that a new innovation cannot be expected to maintain itself, but requires an active pressure to enforce quality, in a Darwinian sense, or it bloats and self-destructs.

Consumerism has bloated and self-destructed. Refrigerators are so bad now that you need to purchase a ten-year warranty to get five years out of them; in the 1950s, they made refrigerators that lasted for decades. We have clearly degenerated, and the latest victim is the internet.

When the internet was new, it gave us all these new capabilities. But over the next twenty years, it became clear that some were actually useful and the rest hype. However, the hype got the most focus from the media, because it was most like their own business model.

Now ad payments are falling because the people watching the ads are not actual consumers but cube slaves time wasting at their McJobs. As a result, the internet economy is imploding. Today, Paul Joseph Watson sees his business model collapse; tomorrow, Twitter or Facebook will.

This collapse follows the same pattern as consumerism. An initially high-value product attracted the herd, got overburdened with expenses to support all those people, and then folded inward as its relevance declined with its novelty.

We are seeing the convergence of internet and consumerism collapses already:

In March, MarketWatch estimated that Amazon will destroy 1.5 million retail jobs in the next five years. And with its push into self-driving trucks, drone delivery, automated grocery stores and more, the site said the total number of lost jobs would likely be more than 2 million, concluding, â€œCould Amazon actually kill more American jobs than China did? Itâ€™s quite likely.â€ …Critics are beginning to wonder if Amazon â€” with such control over retail sales, jobs, ad dollars and more â€” is good for America. …â€œRetail always evolves and reflects society, and right now, consumers are getting more value for their money,â€ said Richard Kestenbaum, a partner in Triangle Capital. â€œThat makes our society stronger and it forces other retailers to be more creative and competitive.â€

In other words, Amazon has become more efficient, and so is displacing most of the rest of the market. However, this will cause collapse by crushing margins on these products, which will in turn mean that they will be of less quality in the future. Soviet-style.

The worst case scenario is that Amazon gobbles up a bunch of smaller industries and then finds its own margins falling, and then goes down with a mighty crash, leaving the consumers with no options.

Looking at this, it makes sense to advance a theory of economy inefficiency. In contrast to the idea that lower price is always better, this theory states that there is a “sweet spot” in cost where a product is cheap enough for the upper half of society to afford it, but still expensive enough that there is incentive to compete on the basis of quality.

Consumerism fails this test, and the internet has as well. In their greed to increase shareholder prices, these companies destroy more than they create, and leave behind mediocre substitutes. This cannot last, like Soviet product entropy, and will cascade in failure together, leaving a void.

Tags: amazon, collapse, consumerism, dot-com 3.0, soviet union

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