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UK riots were product of consumerism and will hit economy, says City broker

Analyst’s report points to ‘deeply flawed social ethos’ and calls for a shift of emphasis ‘from material to non-material values’

The recent riots in London and other big cities were the product of consumerism and will have profound impacts on the UK economy, a leading City broker has said.

Unusually for City analysts, the report by Tullett Prebon focuses on social and political rather than economic issues. It says: “The consumerist ethos, in which a materialist vision is both peddled and, for the vast majority, simultaneously ruled out by exclusion, has extremely damaging consequences, both social and economic.”

The report, by Tim Morgan, the firm’s global head of research, is part of a series in which the broker analyses bigger issues for the UK. Last month, Tullett Prebon issued a report on the UK’s economic situation as part of Morgan’s Project Armageddon.

The latest report details recommendations to resolve what it sees as a political and economic malaise: new role models, policies to encourage savings, the channelling of private investment into creating rather than inflating assets, and greater public investment.

“We conclude that the rioting reflects a deeply flawed economic and social ethos, one which acts as a common skein running through the themes of generational theft, recklessly borrowed consumption, the breakdown both of top-end accountability and of trust in institutions, and severe failings by governments over more than two decades.”

The note pinpoints consumerism as the philosophy behind the riots.

“Consumerism is the underlying message of the advertising and marketing industries, and huge budgets are devoted to pushing a message which, updated from Déscartes, is: ‘I buy, therefore I am.’ “

The typical internet user is subjected to one hundred advertisements an hour, the report says, and the underlying message received by many is: “Here’s the ideal. You can’t have it.”

That has been accompanied by an inflation of government and private debt, a key theme of Dr Morgan’s other work.

“The economy has been subjected to repeated ‘boom and bust’ cycles, above all in property. The overall pattern has been that an over-consuming West has borrowed and spent the surpluses of the increasingly productive and under-consuming East.

“The dominant ethos of ‘I buy, therefore I am’ needs to be challenged by a shift of emphasis from material to non-material values. David Cameron’s ‘big society’ project may contribute to the inculcation of more socially-oriented values, but much more will need to be done to challenge the out-of-control consumerist ethos.

“The government, too, needs to consume less, and invest more. Government spending has increased by more than 50% in real terms over the last decade, but public investment has languished. Saving needs to be encouraged, and private investment needs to be channelled into asset creation, not asset inflation.”

Role models need to change, too: “A young person who tries to become the next Alan Sugar or James Dyson is as likely to fall short as if he or she sets out to become the next global football star. But… failure to become the next Alan Sugar can still leave a person well equipped for a career in management, finance or accountancy. Failure to emulate James Dyson will leave the aspirant with useful engineering or technological skills.” © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds