The Market Size of the Frivolity Economy

frivolity economy: person swinging 6 shopping bags

Over the 20th century, the US moved from an agricultural economy to manufacturing, then to a services economy. What’s next?

Probably a frivolity economy.

This often bothers people, on the left and the right. A standard complaint about capitalism is that it devotes enormous energy to producing things we don’t need and shouldn’t want. Many thinkers seem to think we should just produce the bare necessities– or at least, avoid obvious excesses, like plastic surgery and video games.

But what capitalism is good at is producing things people want, whether or not we approve of those things. And I’d contend that it should produce those things—not least because ethically, we should as much as possible give people what they want. More importantly, perhaps, if we didn’t produce frivolities, the economy would collapse.

I tried to quantify that by looking up total U.S. sales figures for various industries. (These are all recent figures, and I tried to be accurate, but please take them only as estimates.)

All figures are in billions of dollars.

  • Tourism / travel – $1,400
  • Restaurants – $472
  • Sports – $422
  • Charitable contributions – $298
  • Half of universities – $148
  • Cable and broadcast TV – $107
  • Consumer electronics – $99
  • Soft drinks – $75
  • Illegal drugs – $67
  • Pets – $56
  • Gardening – $50
  • Fancy apparel* – $54
  • Alcohol – $44
  • Pizza – $41
  • Weddings – $40
  • Newspapers – $39
  • Cosmetics – $38
  • Tobacco – $35
  • Confectionary – $33
  • Luxury cars – $33
  • Firearms – $32
  • Organic foods – $29
  • Book publishing – $28
  • Games – $19
  • NASA – $18
  • Toys – $17
  • Music – $17
  • Internet advertising – $17
  • Radio – $14
  • Plastic surgery – $13
  • Porn – $13
  • Films – $11
  • Coffee and tea – $11
  • Yachting – $11

Total, $3.8 trillion, or 25% of the total US GDP of $15.1 trillion.

*There is no economic category for “fancy apparel” (clothing we don’t really need). However, men’s apparel is a $57 billion industry, and women’s is $111 billion. I assume the men’s figure is the more utilitarian, and that women could be clothed at the same price, so the excess is a first approximation of the luxury figure.

Now, you might quibble with a few of these– though really, every one of these categories is something we could live without, and something even many Americans do live without. Besides, it would be easy to extend the list. Once you start thinking this way, it’s hard to stop. Do we need churches or carpets? You can be cremated for $1000, so maybe anything above that (including services or a burial) is a luxury. We spend twice as much per capita on defense as Germany does, so that could add $380b to the luxury column. We need a finance industry, but we hardly need one as bubble-prone and highly-paid as we have now. We pay for health care at far above the going rate for the First World.

In addition, even if we need all the roads and oil and houses and basic clothes and food, you have to figure that at least 25% of these necessities are supporting the industries and people on the luxury list. The frivolity economy isn’t draining resources from the necessities; it’s expanding the market for them.

So, be careful what you ask for. Even with generous allowances for ‘need’, an economy that only produced what we ‘really need’ would be shrunken and poor. Like it or not, we’re well into the frivolity era, and it’s a safe bet that the growth areas for the 21st century are these and even more ‘unnecessary’ things.

Mark Rosenfelder is the author of the science fiction comedy, Against Peace and Freedom, and the book The Planet Construction Kit, among other works.

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