Copyright Martin Armstrong all right reserved January 5th, 2013
The Age of Materialism/Consumerism
Why Starbucks is a Global Success &
How Consumerism Created the Industrial Revolution
By Martin Armstrong
Traveling around the globe for 3 months, there was always a feeling of security when a Starbucks was nearby – except in Italy where coffee is not a food group. The Italians still drink coffee out of tiny little cups girls play with when serving their dolls tea. You won’t find a Starbucks in Italy. I tried! I have been compared to Winston Churchill on so many levels, coffee is just one: When a woman said to him: “Winston, if I were your wife, I’d put poison in your coffee.” Churchill replied to the acid-tongued woman, “If I were your husband, I’d drink it.”
The model for Starbucks shows one thing, not only is consumerism inherent in human nature, but the key is following the same pattern of previous success reinventing the same idea time and time again. Could it be a cycle is really timeless? So much for the Mayan hype that was supposed to be this shift away from materialism and a return to the way things were; of course, being a history buff, I just never could find that mythical age where communism worked and materialism/consumerism somehow did not exist.
Materialism/consumerism is part of human nature – it is inherent. Gold became desirable as jewelry because it had no utility as a weapon or tool. That is materialism/consumerism at its root core. I really do not understand where these people come up with this nonsense. It was Cicero who stood before the Senate of Rome in 55BC and said they were going to go bankrupt unless the trade deficit for luxuries (spices & silks) from China was not curtailed among other things.
From the 1650s, English inventories and criminal records illustrate the rebirth of materialism/consumerism after the Dark Ages. (Yes we had staff research this stuff too). Ordinary people began to acquire possessions that had previously been the luxuries first of royalty and then of the elite upper class.
This is the same pattern that gold followed. Gold was first believed to be the tears of the sun god and was reserved for royalty. Only as gold became more common did it migrate down the chain of class within society. Gold never became circulating money in Egypt until it had been conquered by Alexander III the Great (336-323BC) in 332BC. Likewise, trends start with those who can afford them as luxuries and then the lower classes want them and this is how materialism/consumerism becomes the driving force behind rising living standards.
Ordinary people slept on loose straw. By the 17th century England, ordinary people were starting to sleep on mattresses and sometimes in the ultimate luxury – beds. They began to sleep apart from their children in separate beds albeit in the same room. This is how luxuries move down the chain and become necessities. They began to purchase additional clothing even though it was usually second-hand, which was the origin of the English Boxing Day (day of giving used clothes away to the poor).
By the end of the 18th century a large proportion of clothing and bedding was made from cotton that was a leading export of the American Colonies. The urban residents in London began to use wallpaper and purchased clocks which were a luxury at first. In 1675 only one in ten Londoners’ inventories after death mentions clocks. By 1715 the ownership of clocks was more than 50% of the population of London. Consumerism was emerging as this became the age of the small shopkeeper in London where the term “shoplift” was coined for theft about 1685.
Tea and coffee became popular, in addition to beer and local wine. Coffee is indigenous to Abyssinia and Arabia. It was first mentioned by an Arab physician at the end of 9th century. In the 15th and 16th centuries, coffee was cultivated in Yemen. In 1600 it was cultivated in India. It was the Dutch who transported a coffee plant from Mocha to Holland in 1616 and started to cultivate it in Ceylon in 1658 and then in Java in 1696.
In the 17th century, London became an important trade center when William or Orange brought Dutch financial innovations to England upon assuming the British throne with Mary. This led to an increasing demand for ship and cargo insurance which had been perfected by the Dutch. Edward Lloyd’s coffee house became recognized as the place for obtaining marine insurance and this is where the Lloyd’s of London began. From those beginnings in a coffee house in 1688, Lloyd’s has been a pioneer in insurance and has grown over 300 years to become the world’s leading market for specialist insurance.
The actual first coffee house opened in Venice’s St Mark’s Square in 1647. In 1650 the first English coffee house opened in Oxford called the Angel and was operated by a Lebanese man named Jacob. A sort of 17th century Starbucks qualifying as a “coffee house” meaning a place to hang-out opened in 1652 named Pasqua, at Rosee’s Head in Change Alley, Cornhill. By the early 1700s, the equivalent of Starbucks had infiltrated London and there were more than 500 coffee houses in London. In 1660 the Café Procope in Paris became was the forerunner of numerous French coffee houses.
Tea was predominantly a domestic beverage consumed mainly by women but as well as men. English tea became so widespread it was claimed that many female domestic servants allegedly refused to work in any establishment where tea was not provided as a bonus. To this day, “afternoon tea” is still served not merely in Britain, but in the old English colonies such as India over to Singapore where tea rooms still exist.
The Assam plantations were cultivated in the 1820’s, and this brought tea other than from China where even to this day there are about 250 varieties of tea. Tea in China had been in use there since 273 BC. The first reference in Japan to tea (ocha) dates from 815 AD. It was in 1595 and 1599 that Jan Hugo van Linschooten (1563-1633), a Dutch navigator who had sailed to India with the Portuguese and published an account of his travels which included a section on tea. In 1595, the Portuguese harbors were closed to Dutch. This encouraged exploration in Java. In 1602 by the Dutch East India Company was founded and by 1607 the first Dutch ship reached Japan and took tea to Java. In 1610 first tea transported to Holland was from Java.
The word tea (used in all European countries except Portugal and Russia) is based on “tay” from the Amoy dialect rather than the Cantonese “ch’a”. The Japanese call tea “ocha” a derivative of Cantonese. This is because the Dutch had established Batavia as a base in Java in 1596 and traded with ships from Amoy. The Portuguese traded out of Macao where Cantonese was spoken.
In 1713 the East India Company negotiated a right of access to Canton and from then on regular supplies tea could be guaranteed. In 1706, the first tea shop was opened in the Strand in London by Thomas Twining to cater for ladies of fashion. Of course, Twining Tea is still a famous brand today. The Tea shop was much like Starbucks allowing women to mix shopping and pleasure and proved extremely popular then as it still is today.
Tea Parties became fashionable at home gatherings that were a very inclusive social event. There was an elaborate ceremony performed with kettle, teapot, china and silver, all copying such events in Asia. Today, a Japanese tea ceremony is still very serious. In London, ladies offered tea in the “parlour” in the same way as gentlemen gather at the local pub for a spot of ale in the traditional tavern setting. Both such gatherings were very much all part of 18th century sociability. By 1720, there were nine million pounds of tea being shipped in from the East India Company into Britain. This grew to a staggering 37 million pounds just by mid-century mark. The King taxed tea with punitive duties trying to cash in on the crazy. This led to many complaints of moralists like Jonas Hanway (1712–1786), the English traveler and philanthropist. It was Hanway who became the first Londoner to carry an umbrella. He attacked “vail-giving”, or tipping, with only temporary success. He railed against tea-drinking and the taxation.
Tea, coffee and chocolate were all drunk with sugar and this fueled the expansion in the Americas for trade. The production of sugar was at first from cane in the Caribbean and later from beets. The sugar trade actually extends back as early as 327 BC and the time of Alexander III the Great (336-323 BC) where it was reported that sugar cane was being cultivated in India. However, sugar at that time was extracted from the cane by chewing and sucking the plant. At some point later in time, a sugar-syrup was being extracted by means of pressing and boiling the cane. This process which was first practiced in India in about 300 AD and became the basis for producing sugar in solid form as we know it today.
Sugar was brought back to Europe from the crusades along with bathing. However, at first sugar was a rare and very expensive commodity worth more than its weight in gold similar to pepper. In the 1390’s improvements in technology resulted in a more efficient press that doubled the juice obtained from the cane. This advancement in technology allowed the economic expansion of sugar plantations. In the 1420’s, sugar was carried to the Canaries, Madeira and Porto Santa Maria where it began to be cultivated. In 1493, Columbus stopped at Gomera in the Canary Islands, for wine and water, but he took with him cuttings of sugarcane to Santo Domingo. This was the introduction of sugar to America. The Portuguese took sugar down to Brazil where the production exploded. More than 3000 small mills were constructed prior to 1550. With the available supply increased, as was the case with gold, a market was born. It was after 1625, when the Dutch carried sugarcane from South America to the Caribbean islands.
Sugar had entered Britain during the 17th century as a pharmacist’s (apothecary’s) ingredient. It was commonly sold in solid cones and required a sugar nip to break off pieces. Several thousand tons of sugar was imported in the 1650’s. However, with the consumer revolution, the importation of sugar to Britain reached 23,000 tons by 1700 and almost 250,000 tons by 1800. The price of sugar fell and with its demand spread down the class ladder. Sugar prices fell by 50% during the 17th century and continued to drop another 20% by 1750 as imports doubled by 1700 and doubled again by the 1730’s.
With the European colonization of the Americas, the Caribbean became the world’s largest source of sugar much as Arabia today supplies crude oil. Sugar cane grew in the Caribbean lowering prices to such a point that no longer could sugar beets could be grown in Europe to compete. The Caribbean now produced 90% of the sugar for European consumption. Haiti became the largest sugar producer in the world by 1750 controlled by the French. It was this trade that created the demand for labor and African slaves proved to be the preferred plantation worker as they were better suited to the hot climate and seemed to have a natural immunity to diseases such as malaria and yellow fever probably because these diseases where common in the tropics. The European indentured servants died and proved to be too fragile for the climate. They were better north picking cotton.
Nevertheless, the English diet became more varied and increasingly included cane sugar and chocolate as society became more affluent. They ate off pottery rather than wooden plates and they drank increasingly out of glasses instead of pewter mugs. Romans saw the very same pattern in materialism/consumerism. By the peak of the Roman Empire in 180 AD, glassware had become common. Metal and wooden cups were abundant. Glass was a real luxury. This same identical pattern followed the rise of Britain.
During the reign of Charles II (1630–1685) almost no English home had china plates and cups. By the time of George II (1683-1760), one in six English homes now had china plates. This was called “china” because that is where they came from. In Rome, the color purple came from trade with the Far East. It was deemed so beautiful; no one was allowed to wear purple other than the emperor – hence the term when he “assumed the purple”.
The greatest success of the Roman Empire was enabled by their road building. This dramatically increased their ability to mobilize their forces and respond rapidly to any threat. It was the British who followed the very same pattern. However, they were not alone. More roads were constructed throughout Europe at this time of the 18th and 19th centuries than at any time since the Roman Empire. The journey from Paris to Marseilles, which required seven days at 48 kilometers per day in 1765, was cut drastically by 1780 to 3 days at 112 kilometers per day. Just as the railroads dramatically expended the United States economy during the 19th century, it was roads that provided that first innovation for economic expansion.
The 18th century materialism/consumerism revolution varied greatly from country to country depending upon its economic freedoms moving away from serfdom of the 14th century prior to the Black Death. By the 1730’s the rapid growth in the number and proportion of people employed in supplying services rather than manufacture and agriculture had made London the greatest modern city of its era. The peak demand may have occurred even earlier in the cities of the Dutch Republic as the economics began to shift to London with William of Orange in the 17th century. The peak in the service industry may have taken place even earlier in France. This is illustrated by the famous painting by Jean-Antoine Watteau (1684-1721) of L’Enseigne de Gersaint, or “Gersaint’s Shopsign”, (1720), which is considered to be his last masterpiece. It was painted as a shop sign for the merchant or art dealer, Edme François Gersaint. According to Daniel Roche the sign functioned more as an advertisement for the artist than the dealer. Nevertheless, it is an important snapshot of a shop in Paris at that point in time. Keep in mind that this was also the peak in the economy in Paris for it was 1720 when the Mississippi Bubble burst followed a few months later by the South Sea Bubble in England. Going into these bubbles, money was abundant and this fueled the shop keeping trade as people spent their profits on all sorts of things offered by the shops.
The broadly based consumer revolution took place in an explosive manner during the latter years of the 18th century. Thomas Jefferson had purchased numerous books in Paris at this time and sent them to the states as references to create the American Constitution for James Madison. Jefferson would not have been able to accomplish this research gathering without the boom in materialism/consumerism that produced a vibrant trade in Paris. In every country the consumer revolution predated the industrial revolution and no doubt enriched many and that inspired ideas that could invent gadgets to be sold in this economic boom. The Industrial Revolution was a response to consumer demand so it was the consumerism that gave birth to the industrialization of society. So do not minimize materialism/consumerism. If people see they can make money, then they will create to fill that slot. This is Adam Smith’s (1723-1790) Invisible Hand. Without a market to make money, nobody will create something for nothing. It takes INSPIRATION. Marxism begrudges people like Henry Ford (1863-1947) because he became rich creating an idea to lower the cost of his automobiles to expand that demand for materialism/consumerism.
It has always been the growth in materialism/consumerism that furthers society. Banking emerged from the Dark Ages as merchants went to the East and brought back consumer goods such as spices and silks. This resulted in merchant banking and foreign exchange. Of course kings began to borrow from the merchants and that gave birth to national debts as well. It was this link with international trade that also inspired empire building. International trade began to explode between 1740 and 1780 increasing by a one-third. This was the most rapid period in economic history post-Rome for international trade expansion. This was the essence of Adam Smith’s Wealth of Nations published in 1776. All of this economic expansion came because materialism/consumerism provided the incentive to find goods to sell to the waiting consumers. Europe has very punitive VAT-taxes that depress this very engine for economic growth.
Clearly, the first materialism/consumerism fueled international trade. The motivation to satisfy that demand came from outside Europe. This obviously fueled industry of cotton and sugar cane in the Americas not to mention tobacco. There was a huge demographic surge in China created a consumer demand for tea, china, silk, and spices which attracted growing numbers of British and Dutch merchants. This was the whole reason Columbus set sail to try to find a short trade route to India in 1492.
Tobacco was the other commodity to exploit the consumer revolution. Tobacco is native to the Americas and it was first grown commercially round Chesapeake Bay when in 1612 John Rolfe introduced a superior species of tobacco from Trinidad. The imported plants flourished in the Tidewater’s soil and climate. Tobacco became a major export from the American colonies that became a large and profitable tobacco industry. It began as a pharmacist’s (apothecary’s) ingredient, and migrated to alehouses where tobacco and china-clay pipes were provided to their patrons. Tobacco was increasingly provided in London shops and smoking quickly became a masculine pursuit.
From 1617 to 1793 tobacco was the most valuable staple export from the English American mainland colonies. The quantity of tobacco shipped to Great Britain rose from 20,000 pounds in 1617 to over 40 million pounds in 1727. A tobacco “hogshead” was a wooden barrel into which farmers packed cured tobacco leaves for transport and to store tobacco. Since the average hogshead weighed over 1,000 pounds, it was practical that warehouses developed to store the crops. The standardized hogshead measured 48 inches (1,219 mm) long and 30 inches (762 mm) in diameter at the head with a weight of about 1,000 pounds (500 kg). In ancient Egypt, farmers took their grain to warehouses run by the government and their receipts became money for they were in bearer form. Egypt never developed coins until the conquest of Alexander the Great in 334BC. This was effective the earliest form of paper money. Therefore, the emergence of tobacco receipts being used as money followed the same identical pattern of development in ancient Egypt where gold and silver in ingot, rings and wire form was only used in international trade or very large domestic transactions.
The importance of the tobacco trade also led to the formation of the United Kingdom in 1707. The main port of entry for tobacco was actually Glasgow. This was one of the primary reasons Glasgow merchants were overwhelmingly in support of the union with England to ease trade flows creating the United Kingdom. The pound-of-tobacco became a currency unit in Virginia, with warehouse receipts in tobacco circulating as money backed 100% by the tobacco in the warehouse
The beginning of the end of the tobacco age coincided with the outbreak of the American Revolutionary War in 1775. The American planters were heavily in debt to the Glasgow merchants who had lent money against future crops to secure trade. However, the collection of those debts became impossible during hostilities and this ruined many merchants in Glasgow. The Scottish tobacco fleets were seriously threatened by hostile action. Finally, in 1783 when peace came, the now independent United States could send tobacco direct to Europe, cutting out the Glasgow merchants whose monopoly was secured by British domination.
Tobacco profits began to surge eliminating the Scottish merchants. This also dramatically increased the demand for labor that then fueled the slave trade facilitated by the Dutch. Early attempts to employ the Indians to work the fields for the English proved futile. The system of indentured servitude supplied by the English courts that sold “criminals” for the slightest infraction such as even shoplifting an apple was also cut off with British relations who then turned to Australia. Indentured servants had been an important part of the Chesapeake labor force throughout the colonial era. Maryland had also imported substantial numbers of British convicts as bound laborers sentenced to generally 7 year terms. All this supply vanished with the Revolution fueling the alternative slave trade.
The fourth largest export of commodities from America to Britain to feed the consumer revolution was rice. Indeed, rice was to Carolina what tobacco was to Virginia. From the middle of the 18th century rice was also grown in Georgia. Thus, the primary crops exported to Britain were tobacco, sugar, wheat and rice.
Arab merchants brought cotton cloth to Europe about 800 AD. When Columbus discovered America in 1492, he found cotton growing in the Bahamas. By 1500, cotton was known generally throughout the world. Cotton seed are believed to have been planted in Florida in 1556 and in Virginia in 1607. By 1616, colonists were growing cotton along the James River in Virginia. During the 18th century an increasing number of clothes were made from cotton, which was lighter and easier to keep clean than wool. The invention of the cotton gin in the USA in 1793 greatly speeded up the production of cotton, and increased the prosperity of Liverpool and Manchester.
From 1791 to 1802, the United States government was supported by internal taxes on distilled spirits, carriages, refined sugar, tobacco and snuff, property sold at auction, corporate bonds, and slaves. The high cost of the War of 1812 brought about the nation’s first luxury sales taxes on gold, silverware, jewelry, and watches. In 1817, however, Congress did away with all internal taxes, relying on tariffs on imported goods to provide sufficient funds for running the government.
In 1862, in order to support the Civil War effort, Congress enacted the nation’s first income tax law. It was a forerunner of our modern income tax in that it was based on the principles of graduated, or progressive, taxation and of withholding income at the source. During the Civil War, a person earning from $600 to $10,000 per year paid tax at the rate of 3%. Those with incomes of more than $10,000 paid taxes at a higher rate. Additional sales and excise taxes were added, and an “inheritance” tax also made its debut. In 1866, internal revenue collections reached their highest point in the nation’s 90-year history—more than $310 million, an amount not reached again until 1911.
In 1868, Congress again focused its taxation efforts on tobacco and distilled spirits and eliminated the income tax in 1872. It had a short-lived revival in 1894 and 1895. In the latter year, the U.S. Supreme Court decided that the income tax was unconstitutional because it was not apportioned among the states in conformity with the Constitution.
Effectively, the primary target of taxation was consumption. After all, it was the consumer revolution that had captured the attention of government. It was the rise of this consumer market that inspired the industrial revolution. Had materialism/consumerism not preceded the industrial revolution, it is debatable if anyone would have attempted to invent something where there was no demand.
Gold poured into Europe creating massive inflation from South America. The Spanish were simply better at spending money than they were at producing. The vast amount of wealth that poured into the nation created a sense of arrogance so that menial jobs went to imported French labor and people followed the money meaning that there was just plunder from America, not really even trade. This had the effect of steering people and money away from creating a domestic industry in anything other than American plunder and how to get a piece of that action. The materialism/consumerism in Spain was not “earned” even by trade. The imported wealth neither created infrastructure nor domestic industry to export goods, only luxury spending. Spain used its wealth to pay bankers and it turned against its own people to confiscate their wealth using the Spanish Inquisition when money became scarce. At the end of the day, Spain taxed its own people and borrowed against their future ensuring Spain would sink into 3rd world status. They said that the vast majority of people working on the docks in Spain at the time were imported labor from France. The vast amount of gold and silver imported to Europe by Spain, fueled inflation and funded the materialism/consumerism in other nations while Spain lived in luxury but created nothing economically to fall back upon when the ships stopped coming.
In the 18th century consumer products from the tropics and sub-tropics became commonplace in Europe setting the stage for a booming America and migrations. We see even walnut was being replaced by mahogany, a tropical American hardwood that was first imported to England during the 1670s. Additionally, from the late 17th century people began drinking hot drinks such as tea, coffee, and chocolate, all from china cups. This altered society creating indeed many social occasions that concentrated around the consumption of these drinks furthering the growth of London as the urban center. By the Victorian Age, London finally matched ancient Rome reaching a population of 1 million.
However, surveys of probate inventories and the Old Bailey criminal records of stolen goods suggest that the 1720s saw a discernible extension into the commoner ranks of china, porcelain, tea and coffee pots, forks, knives and of course glassware. In 1675 only 9 % of English families had pewter plates that rose dramatically to 45% by 1725. Pewter was then going out of fashion as households shifted to china rising from 27% to 57%. By 1725 cups and other utensils for hot drinks were to be found in 15% of all European families.
The Chinese made the first porcelain during the Tang dynasty (618-907) and made the finest porcelain for centuries that became known as “china-ware”. By the 1100s the secret of making porcelain had spread to Korea, and in the 1500s even Japan knew how to make porcelain. As trade with the Orient grew during the 17th century, Europe was desperate to reverse engineer porcelain as demand exploded. By 1791 the East India Company had imported 215 million pieces of porcelain. However, by the early 18th century porcelain was also manufactured in many parts of Europe at a cheap price for the common folk like knock-off fashions of Gucci bags. In 1756 the town of Sèvres began producing its characteristic soft-paste porcelain while Dresden ware was the hard-paste porcelain produced at Meissen in Saxony from 1710.
As Europeans reverse engineered porcelain, some brands became well known. Worcester porcelain was first produced in 1751 beginning with soft-paste porcelain decorated with Chinese designs in blue under-glaze making it appear as a knock-off. However, the most famous became the cream-ware that was first produced in Staffordshire, England between 1730 and 1740. The principal ingredients were white-firing clay and ground flint, the flint being used to increase the whiteness and strength of the composition. This produced a durable body, where the tone varied from buff to a deep cream color to which the application of a clear lead glaze was applied during a second firing to make it impervious to liquids.
Josiah Wedgwood (1730-95) carried out an enormous number of trials to perfect the cream colored porcelain body. His first really successful cream ware was produced until after 1759. In 1765 Wedgwood opened his first London showrooms in Charles Street, off Grosvenor Square, and in June he received a commission to make an elaborate tea service in green and gold cream-ware for Queen Charlotte. It was after this event that he was officially appointed potter to her majesty and his cream-ware was renamed “Queen’s ware”. By 1770, Wedgwood had received his first order from Empress Catherine II of Russia and 3 years later she commissioned him to make almost 1,000 pieces for the Chesmensky Palace. Wedgwood was a skilled marketer and he was also the first ever to use his own name, which was impressed in the clay as the mark of his work. In 1771–2, he sent unsolicited parcels of his work to many of the noble houses of Germany in the hope of attracting orders and advertising the quality of the goods which proved to be a success.
It is always the same sequence of events. Those who claim this is some unique age of materialism cannot point to a single period other than the Dark Ages where people simply ate and worked with little education or personal property. They could not own land. They merely worked for the landlord. So sorry! I can find no support for such a utopian view of history. It is what it is. Hence the success of Starbucks is merely the same pattern repeating. It is not a new idea. Just a proven one of success.