Microsoft Word Consumer Society doc

4. Consumption and Well-Being 
As noted earlier, consumption activities most directly address people’s living 
standard (or lifestyle) goals. People generally have other goals as well, concerning self-
realization through work, fairness, freedom, ecological balance, etc., which may either be 
supported by, or undermined by, their actions as consumers.
Looking at the contribution of consumption to individual and social well-being 
requires taking a broader view than that of marketers, who are primarily interested in 
selling their products. It also means taking a broader view than that taken by utility 
theorists, who are primarily interested in modeling consumer choice. 
4.1 Old Utility Theory, New Utility Theory, and Capabilities 
What is the relation, then, of consumption to well-being? Can social well-being 
be increased by any particular policies or practices related to consumption? 
Old Utility Theory 
 
In the old-fashioned utility theory view, individual well-being was, rather narrowly, 
simply equated with pleasure. Because, however, some of the early theorists thought that 
utility could be measured and summed not only within a person, but also across persons, 
the theory was sometimes used to draw conclusions about social well-being.
Some of these economists assumed that everyone has similar utility functions, 
characterized by diminishing marginal utility. If so, then taking away $1 that a rich 
person would have spent on a luxury good such as caviar would cause little decrease in 
utility, since the rich person has already consumed a great deal and has low marginal 
utility from consumption. Giving that same $1 to a hungry poor person who has high 
marginal utility to spend on a necessity like bread would cause an increase in overall 
utility that more than outweighed the loss to the rich person. This is a fancy way of 
saying that satisfaction of wants, what people simply desire, should take a back seat to 
satisfaction of needs, what people require for a healthy, flourishing life.