This article was first published in the September 2016 UK edition of Accounting and Business magazine.

The notion that people will always crave more material possessions has long seemed like an iron-clad rule of economics. For centuries economic growth has been powered by the near-universal quest for more furniture, vehicles and gadgets. 

But there are some intriguing signs that citizens of richer nations may be nearing ‘peak stuff’ – the point at which most physical needs have been met. The amount of ‘stuff’ demanded by the average Brit has fallen by around a third, from 15 tonnes of material in 2001 to just over 10 tonnes in 2013, the last year for which data has been collated. And the same trend can be seen in other rich nations. 

‘There is some compelling evidence that we are entering a new phase of capitalism,’ says Chris Goodall, founder of the website Carbon Commentary, author of Ten Technologies to Fix Energy and Climate and the expert who coined the term ‘peak stuff’. ‘The weight of things we use to sustain a modern economy is tending to fall.’

If true, the ‘peak stuff’ hypothesis (also alluded to earlier this year by Ikea’s head of sustainability, Steve Howard, when he said the appetite of Western consumers for home furnishings and familiar goods was at its limit) would have important implications for the global economy and the environment. Endless economic growth and an increasing world population may not spell ecological disaster after all. On the downside, the world’s manufacturers, many of which are now clustered in emerging nations, may be entering a long malaise.

So have we really had enough? Proponents of peak stuff see a host of reasons why material consumption may be starting to level off, at least in wealthy nations. ‘By the turn of the millennium most people had most of the things they needed,’ says Goodall. ‘At that point manufacturing really no longer needed to grow any more.’ For example, in 1959 just 13% of British households owned a fridge. By 2011 this was up to 99%. A similar trend can be seen in other appliances.  

Technology might also be promoting this trend in several ways. Firstly, in advanced nations, manufacturing processes are becoming ever thriftier in terms of resource usage, says Goodall. And, once produced, everything from cars to fridges demands less energy to operate. 

Shift away from materialism

In addition, more consumption is being ‘de-materialised’. Downloads have replaced CDs and DVDs. E-readers can compress vast libraries of material into a device that can be held in the hand. The ability to ‘share’ goods – such as cars – is also making it less necessary to own them. Zipcar in the US has been helping to chip away at rates of car ownership among young city dwellers. Adam Millard-Ball, an assistant professor of environmental studies at the University of California Santa Cruz, believes that a variety of forces are starting to cause car ownership, and driving, to level off. ‘Re-urbanisation has been one contributor,’ he argues. ‘Young people have been flocking back to city centres as they have become safer, livelier and gained more services and amenities.’

More radically still, it is possible that the new generation is shifting away from materialism, preferring to spend money on experiences and declutter their lives. ‘Millennials are supposedly less likely to seek to demonstrate status through the acquisition of material possessions such as fancy cars,’ says Goodall. Instead, spending on exotic travel, entertainment and other experiences has been increasing. Proponents of the ‘peak stuff’ thesis also point to the growing acceptance of recycling and repairing, rather than replacing, possessions. ‘Repair cafes’, community events where you can get goods fixed for free by volunteers, have been taking off around the world.

A turning point in the global economy may have been reached in 2014. For the first time since records began, services, rather than goods, accounted for the bulk of growth in world trade, according to data from the United Nations. Tourism, entertainment and business services made up 62% of the rise in exports, and goods just 38%. 

‘Peak stuff’ would also explain several perplexing economic phenomena that have been vexing economists for years. Since improving manufacturing efficiency has historically been the driving force behind productivity growth, peak stuff could help account for the weakness of productivity growth in advanced nations since the turn of the millennium, Goodall suggests. More immediately, it could account for the recent underperformance of manufacturing relative to service sectors in most rich nations. ‘Purchasing managers indices from the US and Europe have all shown far weaker activity among goods-producing firms relative to those providing services,’ says Marc Chandler, an economist at Brown Brothers Harriman. If manufacturing has indeed passed its prime, this would create losers as well as winners. 

Many developing nations could face headwinds. Services accounted for 21.2% of the exports of rich countries and just 14.8% for emerging countries, according to 2014 data from the United Nations trade office, UNCTAD. In addition, many emerging nations are more reliant on exports of commodities. Some developing nations have become powerhouses of service sector trade – notably India with its IT centres and Poland with its back-office accounting and legal services. 

But though not all economies would win in the short term, the global ecological payoff from peak stuff could be huge: a more sustainable planet and economic growth with less damage to the environment. 

Statistical illusion?

Still, some academics believe it is too soon to start celebrating. Researchers at the University of Leeds, among others, have argued that ‘peak stuff’ is merely a statistical illusion. 

The first concern is that there is a potential flaw in the way wealthy countries measure their material footprint. The resources used to produce domestic goods and exports can be calculated, but assumptions need to be made about how much energy and materials went into generating imported goods. And since more goods are being imported from less resource-efficient producers such as China and India, the estimate of resource usage may be falling short. ‘Material usage looks to have been displaced and not necessarily reduced,’ argues Anne Owen, an academic at the Sustainability Research Institute at the University of Leeds. 

Added to this, Owen says, a longer period of data may also be needed before environmentalists can crack open the champagne. ‘Our research suggests the levelling-off of resource demands in recent years may also have been due to the economic contraction since the 2008 financial crisis, rather than any step change in efficiency or a reduction in demand for goods,’ she says. 

Digitisation may not always be the environmental boon it appears, either, says Owen. While e-readers – such as Kindle of iPad – don’t rely heavily on forests, their production requires ‘hidden materials,’ she says. ‘The myriad resources used to produce the e-reader are not so easy to identify. But there is not necessarily a significant ecological saving.’

The other major caveat to peak stuff is that it still only affects a relatively small portion of the world’s population. As the middle-class populations of China, India and Africa continue to swell, so will the global demand for cars, televisions, fridges and washing machines. 

However, even the sceptics are starting to see some light at the end of the tunnel. ‘With every passing year, goods around the world are being made more efficiently, with less materials per product,’ says Owen. ‘That is taking us closer to a situation in which our material footprint will no longer expand in tandem with the economic cycle.’

But it remains an issue of debate as to whether we have reached that point. The ‘peak oil theory’ – from which ‘peak stuff’ derives its name – predicted that US oil production would start to level out in the 1970s and then decline. Four decades later, US oil output shows no signs of maxing out. For the sake of the environment, we must hope that ‘peak stuff’ won’t be similarly elusive.

Fernando Florez, journalist