Capitalism is frequently accused of making people materialistic, of focusing their attention away from spiritual and idealistic matters and towards the pursuit of material wealth. It cannot be denied that modern Westerners spend an awful lot of time and effort on obtaining larger houses, faster cars, designer clothing, and the latest smart phone. I will argue here that the blame for this cannot be put on capitalism, but that this state of affairs is indeed lamentable, and that most people would be better off if they spent less effort chasing after worldly possessions.
One of the most important insights of economics is the law of declining marginal utility: the more of something you have, the less valuable, as a general rule, is another unit of that thing to you. Due to the enormous productivity increases brough about by capitalism, we now have vastly more material goods, which means we value material wealth less than our pre-capitalistic ancestors or our contemporaries unfortunate enough not to live in a capitalist country.
Indeed, people on the verge of starvation might well come to blows over a half-eaten sandwich, or prostitute themselves for the price of a warm meal. This is not to say that well-fed Westerners would never stoop to such behaviour, but the pecuniary reward necessary to induce them to engange in behaviour they find degrading is much higher. In other words, they value idealistic concerns like dignity more highly compared to material wealth, i.e. they are less materialistic.
Capitalism has not made us more materialistic, it has merely given us the means to more easily pursue our pre-existing materialistic inclinations. If they could have, ancient and medieval people would have happily gorged themselves on fast food and pop and whiled away the hours watching reality TV. The European Middle Ages in particular seem to us to be a much more spiritual time, but that perception is severely distorted by the fact that almost all the records we have of that time were put down by clergymen, who of course were much more concerned with non-material concerns than the average peasant or serf.
While it is true that religiosity has decreased since the beginning of the Industrial Age, it is not true that this has brought about an overall decrease in idealism. Rather, our idealisitic concerns have grown and multiplied to include concerns such as human liberty, scientific progress, and the environment. (I do not mean to suggest that these played no role in pre-Industrial societies, but their importance has grown enormously.) On the whole, we are now so rich that we can afford to care about a host of non-materialistic issues.
Still, I do believe that there still is an overemphasis on material wealth in contemporary Western society. A lot of people work long hours in jobs they despise to be able to afford a slightly larger house or a nicer car. Many of them would be happier looking for a less stressful job, even if it means accepting lower pay. You do not need to buy the latest iPhone. That smart phone you bought two years ago is still perfectly fine and you can use it for another couple of years. You don’t need to get a new car every five years. Just because the Joneses have a pool in their garden doesn’t mean you have to get one, too. If some particular material good really makes you happy, go for it. But don’t work yourself ragged just to achieve some sort of status symbol. Life is pretty good if you live in a modern capitalist economy. Enjoy it.