Cultural attitudes have shaped economic patterns in the past and continue to do so today. A general shift in societal values is seen in today's world through the theory of postmaterialism – a shift in priorities from overconsumption to self-expression. This shift is explained by an individualistic desire to create a better quality of life over one that prioritizes materialistic values.
The extent of one’s postmaterialism is measured by the Inglehart Index which has respondents assign themselves a value between 1-3, with a lower number indicating more materialistic values. With a significant coefficient at 1.78, there is a strong relationship between the Inglehart index indicating the extent of postmaterialism in a society's GDP per capita (Social Indicators Research).
According to the Bureau of Economic Analysis, personal income and disposable personal income both increased by 0.7% in 2022 (Bureau of Economic Analysis). As income levels increase, people have less to worry about (such as survival and physical security). So, non-materialistic priorities like quality of life, personal freedoms, and social equity have become more important. These rising levels of income have led to the development of post-materialism.
However, characterizing post-materialism in its essence is hard as was made apparent in an interview with Simone Shevchuk who attempts to incorporate non-materialistic philosophy into her daily life, as preached by Buddhism, but finds herself unsuccessful most times. Simone says, “post-materialistic beliefs are easier to practice in some aspects of my life than others, and are most times driven by a desire to save money.”
Regardless of why, the shift into more post-materialistic societies may have adverse effects for the economy. Intuitively, high levels of post-materialism could lead to a decrease in demand and production levels hurting the economy. Ilesh Kurani, a medical counselor, reasons that the cause of the mass resignations in 2022 could be attributed to monetary wealth being a lower priority for more people due to postmaterialism. This would also have a negative effect on the economy.
However, there has also been evidence to the contrary. It has been found that post-materialistic citizens value their economic autonomy and want to decide when they make their financial investments. Therefore, post-materialism in this case positively impacts the stock market, which fosters economic growth.
The shift to postmaterialism is instrumental in predicting future market trends, and will thus be an important indicator of how the world will be.
Sources
Ilesh Kurani, Medical Counselor, ileshkurani@gmail.com
Simone Shevchuk, Student Employee at Fermilab, sshevchuk@cps.edu