There is a link between national culture, the economic situation, and the frugality of the consumer. Many literatures attempt to define this link from divergent perspectives and how these differences are manifested in different countries. This is true because a country’s cultural values differ significantly from another country. Whether there are common denominators in understanding national culture, economy, and consumer frugality will also inform this literature review. The aim is to seek for varying opinions from different scholars in order to get a wider picture of these issues and their interconnectedness. For instance, poverty has been understood in some aspects of international perspective despite the potential of social anthropology that incorporates both the international perspectives and social relation. Anthropology has been sidelined from the mainstream measures of poverty despite its association with society-based researches, (Green, 2006).
Poverty levels within a country determines the level of consumption; thus, anthropology is the best way of evaluation of poverty policies. The aim is to keep monitors poverty levels in order to develop amicable solution. For constructive development to take place, poverty eradication should be the first objective for consideration. It is in doing so that the society is empowered. Morgen and Maskovsky, (2003) in their article concurs with this view by proposing that the American ethnographic trends show that there is need for welfare restructuring to curb erosion of social well being of the poor.
In their text Morgen and Maskovsky, (2003) identify five themes in understanding the anthropological studies in the United States. The goal is to give a theoretical framework that would address welfare restructuring to curb erosion of social wellbeing of the poor in society. It is the need to address poverty and off set development track that led to the birth of Millennium Development Goals (MDGs). Poverty has a deep root among the low-income bracket to the extend it is a threat to education and health, among other basic human needs. MDGs aim at empowering women, who are mainly affected by poverty given their natural needs and responsibilities.
Corruption is detrimental to development and therefore perpetuates poverty. Sissener, (2001), develops this perspective using anthropological views. The author emphasizes the effectiveness of anthropological methodology in explaining corruption, and gives a deeper understanding on how the vice can be eradicated at international levels. The proposal is to make use of funds recovered from corrupt deals towards poverty alleviation. This author nevertheless, agrees that socio-cultural differences give an explanation on why the meaning of corruption is still ambiguous. By effectively addressing corruption matters in an economy, many barriers that cause exploitation of the poor by the powerful and wealthy individuals can be resolved.
Poverty has been related to a number of cultural practices. The society is divided into social strata that are responsible for continued oppression of the out-group; hence, persistent poverty levels. Others view poverty based on cultural perspective and blame the poor for their state. It is otherwise true that culture explains the root cause and existence of poverty as affirmed by, Lundy and Janes, (2009) that poverty has taken cultural basis with regard to how the society adopts it and how it deals with it. Poverty can be understood via three main cultural representations: culture as a frame, culture in capitalist economy, and institutionalized culture.
Culture as Frame: Cultural sociologists have perceived that there exists culture based on frames. In this concept the, normative concepts gives attention to how individuals evaluate the good from the bad while the cognitive individuals’ main concern is how to perceive something as real. Thus, sociologists say that individuals’ perception of the world is not based on the reality on ground but on cultural frames that hide out what is bad and focuses on the good. As a result, social classes, social interaction, neighborhoods, and organizations emerge. Poverty has been linked to racial abuse in both Canada and the US. Lin and Harris, (2008) note that kaleidoscope factors have widened the racial gaps and discrimination. Wallis and Kwok, (2008) say social inequities (racism among others) are responsible for poverty among the poor in Canada.
Cultural Economy: Culture is also classified as cultural capital. In this concept, the rich against the poor manipulate the processes of cultural and social interactions in a way to maintains dominance of the in-groups. The high-income earners pass on socio benefits to their children that give then advantage over children of the poor. These include the education systems and health systems among other social benefits. In addition, children of the oppressed are brought up to understand that they are the minority and this makes them accept dominance by the rich. As a result, there is generational development that ensures those on top of financial ladder remain up while the poor continue to struggle. Culture capital as identified by Lin and Harris, (2008) is a practice in the US though in Canada this specification is not clear.
Institutionalized Culture: Culture depicts itself on institutional grounds. The setting up of institutional reforms and policies are dominated by the rich who are either leaders or powerful in the political front. As a result, policies that govern our institutions are benefit-bended to suit the needs of the rich and narrow the margin for the deserving poor citizens. These institutionalizations not only affect policymaking but also influence cultural practices on basis of what should or should not be a community norm. In Canada, institutionalized culture is effected in political perspective in a way to manipulate economy. In addition, poverty prevalence among the out-group in the U.S. is a result institutionalization of policymaking and its cumulative effects has been transferred from generation to generation.
Economic empowerment of majority of the population is critical in strengthening an economy according to Wood et al., (2009). The authors took a study of the Australian economic development via structural decomposition analysis for a period. They were able to “distinguish changing export orientation, material intensity, personal affluence, and population growth, among many other potential drivers, and their effects on the overall material metabolism of Australia over the past 30 years,” (Wood et al., 2009, p. 359). This opinion concurs with the cultural perspective of poverty. Economic stimulus packages make money available in the economy and this encourages consumers to spend. On the other hand, where poverty is persistent, consumers’ ability to spend is limited.
The Australian experience of national culture, economy and the consumer’s rigidity in spending is explained in consumption perspective where, fuel and natural resources are the basic needs in the manufacturing sector. There are dismal changes in the consumption of services and according to Wood et al., (2009) “The lack of any significant shift in the Australian economy from minimally processed export goods to manufacturing and service production could be seen as a failure in moving towards a knowledge-based economy,” (p. 359). The population is biased towards social integration due to cultural immobility. The Australians shy away room embracing technology due to fear of cultural erosion. This is in line with the findings by Rick et al., (1990) that fear of internationalization on cultural erosion. It is important to note that internationalization converge on the managerial front but differ in cultural dimensions, (Morris and Schindehutte, 2005).
In Australia, consumer frugality is a way of life, as citizens prefer homemade products in favor of imported products. This is shown in their reluctance to buy products by international organizations; for instance, Starbucks failed to penetrate Australian market leading to closure of some of its outlets in Australia. This is because the product represents importation of American coffee culture. Wood et al. proposes a change in national growth focus to stimulating efficiency in specific sectors of the economy. In addition, it is vital that the national administration revise neoliberal and globalization policies in order to address the needs of modern business environment. “Because it poses such visceral challenges to global economic values, it is perhaps unlikely that Material flow analysis, (MFA) will be institutionalized in national policy making quickly,” (Wood et al., 2009 p. 859).
Another study, by Brooks, (2008) monitors the consumption patterns of the American people which, the author characterizes as spend thrift even in nonessential commodities. The level of consumption in the United States was on the rise until the recent economic crisis set in and commodities that were earlier regarded as luxury have now become basic. There was concern by the American citizens about their overconsumption for the last 15 years and the need for downsizing is gaining popularity among the people, (Schor, 1999) and supported by Stafford et al., (2001).
The changes in the consumption patterns can be attributed to changes in cultural values and the growing concerns of overconsumption that in detrimental to conversancy of natural resources. The corporate world, institutions, and individuals are trying to minimize wastage of goods, which is a good fight to the increasing greenhouse gas emission. Report by the Center for American Progress, (CAP) among adults Americans revealed that most interviewees opined that, “Americans should adopt a more sustainable lifestyle by conserving energy and consuming fewer goods,” (Markowitz and Bowerman, 2011, p. 4). Another way of examining change in consumption pattern is the effect of downfall of the American economy and increasing rate of unemployment. Less money is in circulation in the economy and this limits people’s ability to spend, especially on luxury goods. Since America will be better placed if there is less consumption of material goods, Markowitz and Bowerman, (2011) conclude that, “We believe such widely shared beliefs represent a possible opening toward conciliation between groups within the American public that are at odds with pressing environmental and social issues, namely, climate change,” (p. 20).
On the other hand, Morris and Schindehutte, (2005) suggest building economy through ethnic entrepreneurship as the most likely determinant in the coming years. Entrepreneurship is a global phenomenon when viewed through the lenses of cultural values. Asian countries were initially thought to be insignificant compared to Western nations and the North America due to antientrepreneurial cultures. However, with the gains in economic strength, Billing, (1994) observes that there is change in cultural perception as the people now entice proentrepreneurial development. Nevertheless, according to Morris and Schindehutte, (2005) “entrepreneurial attitudes are not as deeply entrenched in culture as they are often portrayed but that such attitudes can adapt rapidly to economic and political circumstances and in turn affect those circumstances in a dynamic interaction pattern,” (p. 472).
China is one of the Asian countries that experiences significant economic growth and this has given it power in the international sphere. This growth is important to examine in order to understand what influences consumer attitude, consumption behavior, and cultural patterns. Podoshen et al., (2011) opine that the recent economic crisis resulted from overconsumption and propensity to spend and as such, “it is paramount importance to further understand consumer values and tendencies,” (p. 17). The authors agree that the world is experiencing economic integration and cultural erosion as the oriental countries begin to attach materialistic values to commodities. In East Asia for example, there is notable change in social values and traditional tenets wane because of embracing materialistic behavior of the European countries and North America. The erosion of traditional values concerns majority of the people in Asia. Podoshen et al., (2011) note, “beliefs are quickly vanishing in the rush to accumulate material wealth,” (p. 17).
Study by Eastman et al., (1997) found out that in China, high level of materialism has affected university students in Nanjing as compared to their American counterparts. The researchers warned of possible adoption materialism in China and as recent studies have established, Podoshen et al., (2011), their prediction was right. In the traditional Chinese society, children had to avoid spending and save considerable amount of money to take care of the elderly but in the new wave of globalization, this is about to change. The materialistic nature of the modern Chinese economy will limits savings and pass on the burden to the government. This lifestyle is a danger to Chinese economy because of Europeans and the North America are apt in engaging in overconsumption but for citizens in East Asia, this is a new life experience, (Schaefer et al., 2004).
From this literature review, it is evident that various countries have different cultures that affect their way of spending. The traditional societies held on some cultural values that discouraged spending but the effects of globalization are changing these values. The Chinese people have embraced materialism and this will further stimulate economic growth of the country. Overconsumption and overspending led to the recent economic crisis and China should be weary of embracing materialistic economy. There are those who have refused to embrace cultural diversity. In Australia, the people are reluctant to change their cultural preferences and it is interesting to find how the Australian economy and the Chinese economy will perform in the coming decades. However, through conventional thinking by most scholars, it is highly predictable that Australian economy will still stand strong due to their resistance to embrace other cultures. This literature review has also shown that other than cultural values, consumers ability to spend depend on economic determinants like unemployment, national income, and propensity to spend by the central government.