Oxford University Press's
Academic Insights for the Thinking World

Over-consumption in America: beyond corporate power

It is easy enough for critics to trace America’s over-consumption of things like food and fuel to the excess power of our profit-making corporations. Americans consume more food and fuel than Europeans in part because these companies in America are better able to resist taxes and regulations. Yet the deeper source of this greater corporate power is surprisingly non-corporate.

America is the king of over-consumption when it comes to both food and fuel. CO2 emissions per capita and obesity rates in America are in each case twice as high as averages on the European continent. Corporate power contributes to both outcomes when it blocks tax and regulatory measures that might correct the excess. But private companies have more room to do this in America because of the nation’s unique culture, political institutions, and material resources.

Starting with fuel, Americans consume far more oil, coal, and gas than Europeans because consumption here is less heavily taxed. Combined federal and state consumption tax rates on petroleum in the United States are only a sixth of the level in France, and a seventh of the level in Italy, Norway, and the Netherlands. Gasoline taxes in America are just an eighth of the average in Western Europe. Higher fuel taxes are blocked because our fossil fuel industry is so much larger and richer, and thus better positioned to lobby for governmental favors. We have this bigger fossil fuel industry because our proven reserves of coal, oil, and gas are in each case two to three times as large as in all of Europe combined. A fundamental material resource endowment is thus at the base of the over-consumption outcome.

Regarding America’s over-consumption of food, our distinct national culture is more important than resource endowments. Compared to Europeans, Americans believe far more in personal responsibility, and much less in social or governmental responsibility. Freedom-loving, individualistic Americans do not want the government telling them, or their children, what to eat or how much to eat. Only 23% of Americans believe the federal government should have any direct role at all in setting nutritional standards for public schools, and only 22% support taxes on caloric soda. Industry-wide regulations on food advertisements to kids are legally blocked in America by a unique presumption that such ads are “commercial speech” protected under the First Amendment. This libertarian legal view enjoys bipartisan political support. When the Obama Administration in 2011 dared to suggest “voluntary” guidelines on food ads to children, Congress rejected the idea by a 3-to-1 vote in the House and a 2-to-1 vote in the Senate.

The New Fred Meyer on Interstate on Lombard by By Original: lyzadanger Derivative work: Diliff. CC BY-SA 2.0 via Wikimedia Commons.
The New Fred Meyer on Interstate on Lombard by By Original: lyzadanger Derivative work: Diliff. CC BY-SA 2.0 via Wikimedia Commons.

There is also a populist streak in American culture, one that tends to block regressive consumption taxes on the poor. Only 8% of public sector revenues in America derive from consumption taxes, compared to roughly 20% in Europe. Congress failed in 2009 to support a cap-and-trade measure to limit fossil fuel consumption in part because – as Warren Buffett said at the time – it was “pretty regressive.” Grocery sales in America are essentially untaxed for the same reason. European governments routinely impose consumption taxes on food (using a value added tax, or VAT), which helps to explain why food is 30% more expensive in Europe, and hence more lightly consumed. In America, Republicans as well as Democrats have rejected the VAT approach. In 2010, a resolution against any federal VAT tax was approved in the Senate by a 6-to-1 margin, once fears were voiced that it would “cripple families on fixed income.”

America’s unique political institutions are another important non-corporate source of corporate power. The nation’s pre-modern Constitution was intentionally written to create a weak central government, and to the present day it provides both corporate and non-corporate actors with multiple “veto points” they can use to block government action. The Senate itself is a major veto point, since majority votes are often blocked on the floor by a rule requiring 60 votes simply to take a vote, or in committee by an informal tradition that allows individual Senators to place a “hold” on any measure they don’t like. In 2009, the cap-and-trade bill to reduce fossil fuel consumption actually passed the House, but was then blocked in the Senate. President Clinton’s fuel tax proposal in 1993 also made it through the House, only to be blocked in the Senate.

Exploring these material, cultural, and institutional foundations of America’s over-consumption in some detail, little in the way of corrective action will be possible. Our nation’s dominant policy response to both climate change and obesity will be adaptation rather than mitigation. The result in the first case will be deeper international inequalities, and in the second case deeper domestic inequalities. But that could be the subject for another entry.

Featured image: Breezewood, Pennsylvania by SchuminWeb. CC BY-SA 2.5 via Wikimedia Commons.

Recent Comments

There are currently no comments.

Leave a Comment

Your email address will not be published. Required fields are marked *