Meet the spend-shifters

This long economic slump has led to all kinds of fragmented changes in behaviour. Individuals and companies are spending less and saving more.

Thrift has become a virtue and old-
fashioned practices such as barter are making a comeback. Local is preferred to global, authenticity to razzle-dazzle. Two American writers have tried to capture these changing behaviours in a single term: spend-shift.

John Gerzema, an advertising executive, an Michael D'Antonio, a business writer, crisscrossed America over the past five years trying to understand what is going on in the minds of American consumers. Their book Spend Shift is now a bestseller. They found that all the new, small, local producers of everything from food to clothing, the suddenly humbled large corporations, and the diminished spending power of ordinary Americans added up to a shift from "mindless to mindful consumption".

They surveyed some 100,000 people to discover how their buying habits were changing. Between 2005 and 2009, as the economy tanked, the attributes consumers most desired in a company dramatically changed. Daring fell by 20 per cent, exclusive by 60 per cent and sensuous by 30 per cent. Kindness and empathy rose fourfold.

Even more interesting is the huge number of innovative businesses emerging. There are now Time Banks, where people can trade their time rather than money. For example, a chef can work for three hours cooking for a plumber, who then fixes the chef's bathroom. Then there are textbook renting companies, which allow owners of expensive textbooks to rent them out to other students. A website in Los Angeles now allows neighbours to swap lawnmowers, bikes and tools.

WhipCar in London operates on the same "latent capacity" principle, allowing people to rent out their own cars while they are not using them.
Consumers are also organising themselves to get the best deals. In one extraordinary case, a small town in western Massachusetts created its own currency in 2006 in a bid to stop large national chains. The currency could be used in local stores only, and meant you paid five per cent less than if you used regular dollar bills.

During the recession, the local currency kept local businesses going.

A deeper lesson from all of this is that consumers are taking more into their own hands.

Trust in large organisations, whether political parties or companies, is exceedingly low and people are looking to eliminate as much uncertainty as possible from their lives, to rely less on others and more on themselves and their immediate communities.

Meanwhile companies are practising what Gerzema and D'Antonio call "Block Party Capitalism", a way of engaging neighbours and friends in doing something good for each other rather than just acquiring ever more possessions. There has been a surge in Americans keeping chickens in their back gardens. In the UK, beekeeping has become a middle-class obsession, with the number of hives doubling over the past three years.

One facet of the spend-shift is an increased pragmatism. Whatever works, we'll take it. As Gerzema and D'Antonio write: "Executives and politicians who understand this ethos will be embraced. Those who fail to grasp it will find themselves either irrelevant or out of a job.

Either way, the folks most affected by the downturn are finding ways to make sense of a life in a time when having less doesn't mean you can't enjoy life more." If the economy does ever roar back, we will see how lasting this change really is.