Some things about our lives as consumers hardly ever change. We like new clothes, we enjoy a meal with friends, and we always seem to run out of toilet paper. But the nature of our consumption is shifting in an unprecedented way, from tangible stuff to intangible experiences. This is probably a good thing, since essential commodities from copper to corn are getting scarce, and someday the very atoms that make up the universe may be as well. But if we're going to have new kinds of consumption, we'll need new policies to support them as well.
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Today a rising share of our consumption is made up of experiences: human interactions, fantasies, and creative moments. They sometimes take place in the real world, with face-to-face contact and other forms of communication facilitated by ever-improving technology. But increasingly, they happen in the virtual world, through the media of computers, television, cinema screens, video game systems, and even our own minds. We pay for some of these experiences directly, like the Angry Birds sequel, but others are supported by services and platforms we buy separately. For example, Twitter may be free to use, but your computer, your Internet service, and the electricity to run both of them are not.
The satisfaction we get from all of these experiences is an important part of our living standards. We get to share our interests, air our views, forge new relationships, receive recognition, and even live beyond the bounds of our physical existence. We can't easily get that kind of satisfaction from plain old stuff.
There are other important differences from an economic point of view. First, producing new experiences usually requires a big upfront investment -- it costs upwards of $10 million to create a video game these days -- but offering an existing experience to an additional Angry Birds consumer has a very low cost. In addition, one consumer's enjoyment of an experience doesn't necessarily preclude or subtract from anyone else's enjoyment; that's not true for something like an apple or a library book. And finally, the satisfaction we obtain from experiences is non-comparable; you and I may both have a great time watching the new James Bond film, but for different reasons and in different ways. We can't necessarily say whether you had a better time than I did.
This last distinction is especially important, because it opens the door to much higher levels of wellbeing. Economists have suggested that people earning more than a certain income may only be happier when their material living standards are higher than those of people around them. It's easy to compare living standards by looking at people's cars, houses, clothes, and the like, but it's much harder to compare edification from experiences. The "keeping up with the Joneses" aspect of our lives may finally start to disappear as experiences make up a greater share of consumption.
This may sound like a "first world problem," but the number of rich countries is steadily increasing. Unfortunately, most of them still live with economic policies designed to promote the supply of and demand for more traditional products such as crops, fuels, and manufactured goods. To enjoy more experiences, we need different priorities.
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