Time and time again, I come across these questions and arguments:
What if everyone was minimalist and stopped buying things?
Our economy depends on consumerism, so it would crash if we all lived with less!
The financial system, as it stands today, would collapse!
We would not be able to sustain our wealth and support jobs!
I always feel that people say this to create an argument against minimalism and confuse it with owning and buying nothing.
Minimalism on a global scale is a very unrealistic scenario. But my theory and short answer would be this:
Minimalism does not suggest buying nothing, so people would still keep spending money, just in other areas. After a short period of financial struggles, the new economy would find its way to earn money in other areas such as recreational activities, traveling, food, education, sustainability, and experiences.
The true nature of economics is based on demand and supply. The throw-away market would suffer most but had no other choice than to shift its supply to our new demands. That is what the economy always did and will keep on doing.
Though it is a hypothetical question, it still is a worthwhile thought experiment to examine some possible concepts.
So let us explore what could happen when minimalism became more widespread.
What happens to the economy if the vast majority of people become minimalists?
The True Meaning Of Becoming Minimalist
First, let’s get one misconception out of the way. To be a minimalist is not owning or spending nothing.
Minimalism is a lifestyle choice and truly means to focus on reducing things, chores, and activities we don’t value and to keep things we do.
In short, one of the principles of minimalism is owning less to reduce distractions and gain more joy and freedom.
Minimalists can spend money without acquiring new material things.
Solely spending less would mean to follow the principles of frugality, which not all minimalists do.
Though both lifestyles intersect in so many ways, frugal people focus on reaching financial independence by reducing their costs wherever possible and spend less overall.
MINIMALISM = OWNING LESS
FRUGALITY = SPENDING LESS
So, if at all, I think the world economy would suffer more if we all became frugal and thrifty.
Mr. Money Mustache wrote a great article on this topic. He shares that not even when the entire world turned frugal, it would crash.
Consumers being the engine of economic growth is a common misconception, and the real drivers of our economy are the savers and investors.
Still, I would expect a stronger impact on our economy if frugality took over than solely choosing to live with less.
But even then, only in the short run.
The shift had to happen so rapidly that we had no chance to adapt to the new economy – and that is merely impossible.
The question remains, what if everyone lived minimal and/or frugal? Are we doomed or not? Or would the world surprisingly be amazing for everyone after some hiccups?
Valid questions and I’m burning inside too to get the right answers in this ongoing debate.
What happens to the economy if the vast majority of people become minimalists?
If hypothetically the vast majority suddenly decided to live minimally, how far would it disrupt our economy?
People argue that our economy depends on consumerism. But I think the impact may be less than you may think because manufactured goods (clothing, shoe wear, electronics) only account for less than 10% of expenditure for a typical American household, as this graph shows.
This statistic underlines Mr. Moneymustache’s argument that consumers do not represent the engine of economic growth.
If everyone turned to minimalists, people still need to eat, somewhere to live, and all the necessities for living.
So, if the entire population has less demand for material things, then less will get produced.
Retail, car dealerships, and malls would go out of business, whereas the new economy would thrive in these areas:
Recreational activities (sport, fitness, hobbies, spa)
Sharing (Airbnbs, carsharing, land sharing)
Travel tour companies
High quality and fairtrade products
Sustainability and green energy
So there will be a higher demand for workers in those areas rather than in a t-shirt factory or single-use disposable items industry.
Joshua Becker, one of our leading examples of the minimalist movement, sees a brighter picture after a short financial crash.
He says that many companies would go out of business, leading to an exponential increase in unemployment. It would lead to a financial crisis.
But after a short period of chaos and hiccups, we would all benefit from minimal living.
At its core, the economy functions on the model of demand and supply.
It will naturally have to adapt to the new wants of society.
And redirect its productivity to what people need and want.
The purpose of an economy is to provide the people with the goods and services they ask for.
Entrepreneurs would recognize that market demands have shifted and that they needed to adapt their productivity.
Further, the economy will cater to a more minimal and frugal type of people.
The positive effects of a minimalist economy
In our world, consumption is not the problem, but mindless consumerism is. Why? Because it just keeps us feeding our greed for more stuff but never really contributes to love, human connection, happiness, and satisfaction.
Though, when we realize that our basic needs are met and start living more intentionally, we can finally focus on building a better, healthier, and more sustainable economy.
The positive outcomes of it could be:
Less consumerism means less work, which leads to fewer needs that results in less stress and better health.
We would consume less in some areas (stuff) but spend more in others (experiences).
We would no longer need to search for items to provide for our happiness.
We would be directing our spendings to things we value and bring value to us.
The free-market will invent itself new and thrive with alternative inventions.
The environment could recover because we would produce less waste from less consumption.
We would reap the benefits of living with less and focus on staying connected with people instead of hoarding things.
We would all buy new possessions carefully.
We would support companies that share our values (sustainability, health, intentionality, mindfulness, happiness).
We would invest more into our mental and physical health.
Economic health won’t mean much when we’ve destroyed the natural resources that support us. Consuming less means producing less. We could live more sustainably, and resources could be saved.
There will be more money left for education and experiences.
Many retailers would shift from selling to renting.
We would invest our money more in experiences over possessions.
We would support local businesses.
We would live a value-aligned life that is true to ourselves and reduce useless distractions.
We could finally focus on becoming better people and contributing to our community.
To me, this sounds like a far better alternative to strive for. And it would improve the well-being of the planet and all its inhabitants.
We would sacrifice our commodity, but what is it worth if we live in a damaged world where resources get exploited, and we are never satisfied?
Reasons why it is never going to happen
1. Extremes are very unlikely to happen on a global scale
People argue that our consumer-driven economy depends on our mindless spending habits, and if we all stopped buying, we would be doomed.
But the argument “If everyone does ‘X’ then ‘Y’ will happen and we are all doomed” is so common, and I think it mostly serves as a kind of shield to defend our commodities.
Let me explain why such hypothetical questions and arguments are actually kind of silly in the first place.
Obviously we humans love our little routines and predictable schedules and are frightened to risk our comfort with any kind of change, even if it is for the better.
That’s why everyone’s minds go to the extreme versions of things so quickly. It’s easier to eliminate the idea without putting any further thoughts into it.
We would say something like this:
“Minimalism? Why should I deprive myself of things that make me happy? What if everybody did that? Our world would crash! So I’ll continue buying stuff I don’t need to support the consumer economy so that people keep their jobs and can feed their families.”
But what is the point in supporting an economy that exploits our planet in which people work under catastrophic conditions for minimum wage so that we can purchase cheap plastic shit from the markets?
2. Change happens very slowly
Let me tell you what: no matter how much we minimalists wished for the entire civilization to live minimally, it is never going to happen, and not overnight!
Just like the world will never turn vegan or car-free in one day.
It takes time to get used to any lifestyle. And we would never turn minimal all at once unless we get forced by a global catastrophe, deprivation of resources, another world war, or maybe an unstoppable pandemic.
It would take decades for us to move and get used to a minimalist lifestyle. And the economy would have enough time to adapt to our new life standards.
3. Minimalism is not for everyone
For the majority, a minimalist lifestyle is too hard to adapt. Even if the principles are simple, for most, they are far from easy to practice. So becoming a minimalist is not for everyone.
Let’s face it – you cannot force everybody to do anything. We know by now that eating animal products causes significant harm to the planet and our body, yet the majority of the population still isn’t vegan.
We humans are so different from one another. We got different tastes, behaviors, and beliefs. No one can convince us all to change our lifestyles unless we want to.
4. It’s a matter of choice
Though we know that eating processed, sugary junk food is unhealthy, we still do. There are millions of people who did the research and changed their bad eating habits. But what is that number compared to the billions who don’t?
It’s a matter of choice and not force. Our daily individual decisions keep the demands up in areas that we choose to. We allow fast-food and fast-fashion chains, automobile industries, or single-use and disposable product industries to survive.
To change the world for the better, we all would need to improve our choosing habits.
So for those who fear that one day, we would all turn minimal, worry not! We are never going to be all doing X or Y at the same time.
Stopping consumption is not the end goal because every well-informed person will not argue that we should stop consuming.
Hyperconsumption, materialism, and addiction to stuff are the problems.
Living with less consumerism would build a healthier economy where we would value everything we owned. We could make better decisions and demand more from the companies we support. They would have to listen to our needs and wants instead of suggesting we buy things we never needed in the first place.
Our form of minimalist living should be adding what enhances our life and getting rid of everything else.
If we decided to choose what we buy more carefully, choose quality over quantity, and generate less waste, the economy must listen.
And the world would take a shift for the greater good and finally put an end to the throw-away culture.
Therefore I still encourage everybody to live an intentional life with less.
How do you picture a world that practices a minimalist lifestyle?
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How To Stop Always Wanting More?
Simplicity and Happiness: Why A Simple Life Is A Happy Life
How To Learn To Live With Less For Beginners