Americans tend to overspend or buy cheap substitutes rather than save up for longer-lasting, better-quality goods. That's a function of the accessibility of cheap goods, of having more space to store our purchases, and also of a culture where buying stuff feeds the empty part of our souls. European souls are not necessarily more fulfilled, they just find other, more eco-friendly ways to shut out the darkness—like going on a long bike ride.
In short, with higher prices, a more eco-conscious population and less trade bringing fewer cheap products, Americans may have to get used to consuming like Europeans. We will certainly not be deprived, but we will trim back our excesses, perhaps be more thoughtful about what we buy and purchase fewer, higher-quality goods.
What would that mean for the U.S. economy? European levels of consumption coexist with lower levels of growth. It feels like our voracious consumption is what fuels the economy. But that needn’t be the case. Long-term, sustainable growth doesn't come from going deep into debt to buy stuff we don't really need. It comes from technology and innovation, where we come up with new products and better ways of doing things. An economy based on consumption is not sustainable.
Tufts University business professor Amar Bhide argues that what’s great and unique about American consumption is openness to new products and new ideas. Historically, America was a nation of early adopters. This, not just volume, has been what has propelled American growth because it creates a vigorous marketplace where new products can find a market, experiment and improve. Buying smart, while maintaining an openness to new things, can be the foundation of a more sustainable and growing economy.
Allison Schrager is a Bloomberg Opinion columnist. She is a senior fellow at the Manhattan Institute and author of An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.