Academic journal article Review of Social Economy

Consumption Institutions

Academic journal article Review of Social Economy

Consumption Institutions

Article excerpt

Consumption is primarily an institutional activity. Social economists would generally agree that a variety of institutions contribute to an individual's consumption decisions. For example, institutions guide or constrain choices when a consumer observes dress codes, religious beliefs, or legal regulations in making decisions. How can we understand these consumption institutions, and consumption in light of these institutions?

It is well known that the neoclassical theory of choice considers the individual as an isolated entity and neglects the role of social institutions on the formation of wants and consumption decisions (McPherson 1983). The pioneering work in the analysis of consumption institutions is Thorstein Veblen's The Theory of the Leisure Class. Veblen's influential critique of the leisure class and novel insights into such phenomena as "conspicuous consumption" laid the foundations for the institutional and also other analysis of the consumption process. Though still influential, Veblen's approach has also been recently criticized as being theoretically incoherent and inapplicable for understanding consumption behavior in contemporary societies (McIntyre 1992; Campbell 1994).

This paper has two objectives. The first is to show that both the neoclassical and the Veblenian approaches have been restrictive in the analysis of consumption institutions and that the restrictions of both approaches result from a methodological commitment to modernist dichotomies. The neoclassical approach commits to a dichotomy between the subjective and the objective, which amounts to placing the role of consumption institutions in the category of subjective givens that cannot be analyzed scientifically. Similarly, whereas Veblen and his followers have long criticized the neoclassical approach on other fronts and viewed consumption behavior as conditioned by social institutions, a parallel dichotomy prevails in Veblen's approach to consumption which amounts to preventing a complete analysis of consumption institutions. Veblen distinguished between the technological and ceremonial varieties of consumption, corresponding to a modernist dichotomy between the natural and the artificial, which gives priority to the technological and restricts the analysis of consumption institutions to the category of the ceremonial. These different but parallel modernist dichotomies prevailing in the neoclassical and Veblenian approaches have precluded adequate analysis of consumption institutions.

The second objective is to provide an alternative framework that seeks to escape the bounds of such dichotomies by interpreting consumption as speech and by focusing on the role of institutions in facilitating the communication of individuals through consumption. Two existing perspectives are utilized in constructing this framework. One is the view of goods as a system of communication (Douglas and Isherwood 1979). The other is the rhetorical perspective to communication. I combine insights from these perspectives to develop an analogy between speech and consumption and contribute an institutional dimension by exploring the parallels between the institutions of speech and consumption.


Because "consumption institutions" is not a commonly used term, a clarification might be in order. Although the word institution might be used in various ways to emphasize different aspects, virtually all views of institutions share broad agreement around the notion of rule-following behavior. Similarly, consumption institutions are considered here as reflecting socially constructed systems of rules that generate regularities in people's consumption behavior. They range from the regulation of private consumption patterns by such spontaneous orders as fads to joint consumption patterns by such conscious designs as a dinner party. Whereas some are simple norms that regulate table manners, others are complex rules and behavioral patterns that are embedded in custom, tradition, and the legal system. …

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