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turning point in the history of credit cards was when American Express introduced the option of maintaining a revolving balance in 1959. Cardholders no longer had to pay their bills in full but could carry a balance from one month to the next. Joe Nocera writes in his book A Piece of the Action: How the Middle Class Joined the Money Class, ‘Thus did Americans begin to spend money they didn’t yet have; thus did the unaffordable become affordable.’²⁰

      Between 1989 and 2001, credit card debt nearly tripled, soaring from $238 billion to $692 billion. In 2007, it was up to $937 billion. The equation is simple: the more credit we have, the more stuff we can afford to buy, the more resources are consumed and the more waste is created. The credit card (or more specifically, credit card debt) has become as much a symbol of American life as apple pie, with US citizens holding more than 1.3 billion cards. There are more than four credit cards for each American. In contrast, the Chinese have only a total of 5 million credit cards, for all 1.2 billion of the population.²¹ In Western Europe, there is only 0.23 credit card per person.

      Think about your own credit card statement for a second (that is if you are not the one in four who has never looked at his or her statement).²² What are the four logical pieces of information missing from it? You probably guessed the first two: your statement of interest and fees paid. But what about the interest rate itself and the length of time it will take you to pay off your debt at your current minimum monthly payment? This missing information begins to explain why the average family carries, often ignorantly, $8,000 of debt (over eight cards) and pays $1,000 a year in interest and fees alone.²³ The nation’s credit card charges amount to more than $1.8 trillion a year.²⁴ So what have we spent all this credit on?²⁵

      Of course most of us benefit from credit cards at some point in time. As the credit card industry says, ‘We provide the credit, in many cases, for people to start businesses . . . to buy more, to live a better life, to do things that they could never do any other way.’²⁶ So what’s the problem? Looking at the buying habits of a spectrum of consumers, we can see that credit cards have fuelled different types of unhealthy spending habits: accelerated spending, mindless spending, and latest and greatest spending. By no means are these three types mutually exclusive. It is common for one consumer to get caught in the trap of all three. The result, though, is the same and obvious: consumers spend more than they can afford and buy new stuff faster, more easily and more often.

      Accelerated spending is the ‘I’ve got to have it right now’ shopping mentality that leads us to make purchases we can’t afford. David Laibson, an economist at Harvard, notes, ‘Our emotional brain wants to max out the credit card, order dessert, and smoke a cigarette. When it sees something it wants, it has difficulty waiting to get it.’²⁷ Most people’s brains are not wired to do the ‘buy now, pay later’ calculation, as we struggle to understand the principles of exponential growth (which is precisely what credit card interest is). Jonathan Zinman, an economics professor at Dartmouth College, uses an old puzzle to illustrate this point. Imagine a chessboard with $1 on the first square, $2 on the second, then $4, $8, $16 and so on. How many dollars on the final sixty-fourth square? Okay, so if you are like us, your brain does not even try to figure it out, but instinct would suggest it is somewhere around $100,000. Actually, the sixty-fourth square contains $9,000 quadrillion.²⁸ When we borrow money to buy something now, we do not contemplate the interest hangover. Our brain can’t compute the cost of our actions, at least in the moment.

      Mindless spending is the ‘I don’t know what I spent my money on’ type of spending that can take the form of aimlessly wandering around the shopping centre or popping into shops during your lunch break and coming home with things you never intended to buy. The moment when a person shifts from being a conscious consumer shopping for a specific item to an impulse buyer has been named the Gruen Transfer, after architect Victor Gruen, who constructed the first shopping centre in 1956.²⁹ Gruen’s original vision for the centre was to create an ‘idyllic shopping environment’ and a ‘kernel of the community’ – a grand plan far removed from the disorienting and sprawling maze we experience today.

      Latest and greatest spending translates into ‘I’ve got to get it because it is bigger (or smaller), better, faster or even just newer.’ In most instances the existing product still functions; nevertheless it cannot fulfil our desire to have the latest version available. We tend to value whatever is new and original over what is old, durable or used.³⁰ This tendency is not so far removed from the ‘utopia’ described in Aldous Huxley’s classic fantasy Brave New World, where children are indoctrinated from birth to consume. Newness as a trait is something to be cherished.³¹ In Huxley’s imagined world, these children undergo conditioning from teachers who whisper in their ears as they sleep, ‘I do love having new clothes. Ending is better than mending . . . old clothes are beastly. We always throw away old clothes. . . . The more stitches, the less riches; the more stitches . . .’³² The philosophy of Mustapha Mond, the dictator of

      Brave New World, is ‘We don’t want people to be attracted by old things. We want them to like the new ones.’

      Law of Life Cycles

      Mobile phones have now achieved the dubious status of having the shortest life cycle of any electronic consumer product.³³ The average person in America and Britain discards his or her mobile phone within eighteen months of purchase, even though mobile phones will last for ten years on average. (In Japan, the time span from purchase to discard is merely a year.) Every year more than 130 million still-working mobile phones in the United States and 15 million in the UK are retired. Only a small fraction are reassembled for reuse.³⁴ The iPod is not far behind the mobile phone in claiming the ‘shortest life cycle’ crown. For a product introduced in 2001, it is remarkable that by 2009 it had already gone through six ‘generations’ of the first ‘Classic’ model (and that does not even include the extensions of the family such as the Shuffle, Nano, Mini and Touch). If you were one of those consumers who ‘upgraded’ to every new iPod that had come onto the market from 2001 to 2009, you would now own eighteen iPods.³⁵

      We are addicted to new products. According to Colin Campbell, a professor of sociology at the University of York, we suffer from ‘neophilia’. Campbell argues that novelty seeking is a new phenomenon. ‘Pre-modern societies tend to be suspicious of the novel. It is a feature of modernity that we are addicted to novelty.’³⁶ Medieval period fashions changed slowly and slightly over the course of a thousand years. Clothing was primarily a matter of necessity rather than of ever-changing fashion.

      The stories of the founding fathers of the automobile industry, Henry Ford and Alfred P. Sloan, illustrate a dividing line between comfort with the tried and true and the endless chase of the new. One believed in a hyperthyroid economy that could be sustained only through a constant consumer demand for new goods, while the other, the master of mass production, initially rejected force-fed repetitive consumption.

      Henry Ford learned the honest values of quiet country living on a small farm in Dearborn, a rural town just west of Detroit. He spent most of his childhood tending the fields and milking cows. But it was clear from a young age that Henry would not be a farmhand forever. Indeed, he had a gift for mathematics and loved tinkering with machines of all kinds, especially watches. When he founded the Ford Motor Company in 1901, Ford knew that he wanted to make owning a car possible for everyone. Ford, committed to social change, believed a ‘one size fits all’ approach to cars could be a great class leveller. He realized this dream with the introduction of the first Model T in 1908, a car that was simple to drive, cheap, easy to repair, and durable.

      Alfred Sloan, in contrast, had a wealthy and privileged upbringing in New Haven, Connecticut. He studied electrical engineering at MIT, where students were taught to focus on inventing the ‘next big thing’. After graduating at the top of his class, he joined Hyatt Rolling, a small ball bearings manufacturer, acquired by General Motors in 1916. At the age of twenty-six, he became president when his father, a prosperous businessman, bought the company. When Sloan became president of GM in the early 1920s, he faced the threat of an ever-expanding used-car market and an ever-lowering price tag of the Model T. It was around the same time that he brought the new Chevrolet

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