The economist and Nobel Prize winner Herbert Simon had some peculiar habits. For example, he wore one brand of socks so that he did not have to choose from different colors and styles. And he had said we all need three sets of clothes: “one on one’s body, one in the wash and one in the closet ready to wear.”
I read this in the Op-Ed piece “Stop Trying So Hard to Make the Best Decision” by David Epstein in the NYT (5/17/2026). The author makes the case that we should stop being maximizers and agonize whether we have chosen the best among many choices. Instead, we should be satisficers, meaning choosing what meets a need well enough without worrying whether there are better ways to do so. As a matter of fact, psychologists have found that satisficers fare better than maximizers.
What stuck with me, however, was Simon’s ascetic-sounding lifestyle. So, I asked myself: What would happen if we all carried out his lifestyle of meeting our needs and wants with less rather than with more? Which brings up the following question: Can modern capitalism survive with more frugality and self-restraint in meeting our wants?
The tension between asceticism and acquisitiveness is one of the contradictions of modern capitalism discussed in Daniel Bell’s book The Cultural Contradictions of Capitalism. Given the explosion of new wants and consumerism, the book is even more relevant today than at the time of its publication in 1976. Although capitalism traces its cultural roots to the Protestant ethic, it would be difficult to reconcile its reliance on the never-ending development of wants and unfettered consumerism with an ethic that called for frugality, discipline and delayed gratification. So how did we evolve from the austerity of the Protestant ethic to today’s turbocharged consumerism?
Well, before the advent of the industrial revolution and capitalism, subsistence incomes were the major constraint on consumption. There were also other powerful reasons. During the Middle Ages, monarchs and local rulers imposed limits on the lifestyles of ordinary people and the Church prescribed what was an acceptable way of life. Then the wave of explorations introduced Europeans to exotic goods and wealth so that, along with the new manners brought by Renaissance, consumption habits started to become more liberal. The Protestant Reformation and the Enlightenment further loosened the grip of religious authorities on peoples’ lives and provided the cultural impetus that shifted the individual’s preoccupation away from conforming to the norms of the collectivity and tradition toward achieving self-actualization by choosing how to live and what to want.
In the early part of the 20th century, innovations in the mass production of goods in the US had made the need for commensurate consumption an urgent problem if an economic slowdown was to be averted. In the words of Marriner Eccles, who later served as Chairman of the Fed, “A mass production economy has to be accompanied by mass consumption.” The realization that capitalism was inescapably tethered to consumption surfaced again in the years following the end of WW II. For Peter Schumpeter, famous for his theory of creative destruction, “The impulse that sets and keeps the capitalist engine in motion comes from new customers.” The importance of consumerism was even better articulated in 1955 by a retail analyst, Victor Lebow: “Our enormous productive economy demands that we make consumption our way of life . . . that we seek our spiritual satisfaction, our ego satisfaction in consumption.”
These statements recognize that capitalism is sustained by entrepreneurial competition for profits that can come with success in the marketplace. The pursuit of new customers follows a two-prong approach: entice consumers to spend more on satisfying the same need or want. The case of former first lady of the Philippines, Imelda Marcos, with her alleged collection of 3,000 pairs of shoes is the extreme example of this approach. However, the real entrepreneurial success comes from the creation of new wants, some of them superficial others necessary to remedy or complement previous wants. New wants beget new wants akin to an evolutionary process. For example, new digital products and services brought us new forms of fraud and that gave rise to a whole cybersecurity industry. Enticing people to eat tasty but not necessarily healthy foods and beverages begets new industries of gyms, dietary and weight-loss programs, medical services, and weight-fighting drugs.
Some economists believe that our economies will attain a steady-state stage when our wants are saturated. What if, however, the saturation point is a moving target? Or what if there was a wide-spread adoption of the spartan style of Herbert Simon and we cut our consumption to the most basic level?
A world of unending wants and acquisitiveness would certainly satisfy the inherent drive of capitalism for new products and greater profits. But it could also prevent us from ever reaching the point where work and leisure come to a balance and we finally engage in what John Maynard Keynes called the “art of life.” Satisfying an ever-rising consumption would also tax the natural environment at great damage to our ecosystem. And that’s not all. Economic inequality deprives most people of the means to meet new wants and cope with consumption patterns set by the wealthy. They must work more and borrow more. As Daniel Bell puts it: the old fear of going into debt has been replaced by the fear of not qualifying for debt. In fact, in a world of acute economic inequality and spending culture, consumer credit is being used by the economic system as a substitute for higher wages to fill the gap in household budgets.
The dependence of economies on an upward trending consumption is undeniable. Consumer spending comprises two thirds or more of the GDP in most advanced economies. China’s export-oriented model relies on the rising consumption of its trading partners as it tries to remedy its domestic over-saving (under-consumption) policy with over-consumption in the rest of the world. Therefore, a collapse of consumer spending (think of the Covid lockdown) would bring a painful transition toward an economic state of earning less and spending less. The geopolitical consequences would be too great and complicated to fathom.
We seem to be stuck between two forces. One is the inherent drive of capitalism for consumers and sales. Opposite to it stands the quest for the personal virtues of moderation and self-restraint which if adopted as a collective norm threaten the foundations of capitalism as Schumpeter put it in the quote above.
All this is to show that how we manage the development of wants and how we meet our needs, with more moderation or more indulgence, are not trivial matters. Many are content to surrender all that to the inherent forces of capitalism and treat our future trajectory as inevitable. Others will remind us that humanity has lived most of its existence within modest means. And others will advise that we must find a way to live better with less.
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