In the book, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel, the author explains how in the aftermath of World War II, America underwent a profound economic transformation.
When the war ended, the U.S. government faced a massive debt and because of this they had to figure out how to get out of this debt; and so a new strategy emerged: encourage consumption. This shift didn't just boost the economy—it fundamentally reshaped American culture, setting the stage for a lifestyle driven by spending and the normalization and cultural acceptance of debt.
Over the decades, what began as a method to stimulate economic growth evolved into a deeply ingrained consumer culture, where buying homes, cars, and modern conveniences became symbols of success and that you're able to "Keep Up With The Kardashians."
Fast forward to today, and social media has taken center stage, transforming how we perceive and engage in consumption. Platforms like TikTok and Instagram have blurred the lines between entertainment and consumerism, amplifying a message that spending is a way of life.
In this post, we are going to discuss the history of America's consumer culture and explain how post-war policies laid the groundwork for today's digital-driven consumption patterns and how social media has accelerated these trends to a new, impossible pace.
the history
After World War II, the U.S. government kept interest rates low to manage the massive $6 trillion war debt. But those low rates also made borrowing cheap for returning GIs, allowing them to easily buy homes, cars, gadgets for the house (think washing machines and dishwashers) and more. This shift marked the beginning of a new economic strategy: encouraging consumption.
Before the war, Americans were pushed to save and be thrifty to support the war effort. But once the war ended, the focus quickly turned to spending. Princeton historian Sheldon Garon explains that after 1945, America diverged from the savings-focused approach seen in Europe and East Asia. Instead, politicians, business leaders, and labor unions all promoted spending as a way to drive economic growth.
According to Housel, two major factors fueled this shift: the GI Bill, which offered unprecedented mortgage opportunities, and an explosion of consumer credit, made possible by loosening Depression-era regulations. The first credit card was introduced in 1950, followed by a surge in store credit, installment plans, personal loans, and payday loans. And what made spending even more of a no-brainer was that interest on all forms of debt, including credit cards, was tax-deductible at the time.
During the war, factories focused on producing military equipment, which meant it was hard to get many household goods. So, when the war ended, there was pent-up demand from GIs and their wives who were eager to buy - and with cheap credit available, they went on a buying spree like the country had never seen before.
To give you an idea of what the time was like, for example, according to Housel, commercial car and truck manufacturing had almost come to a complete halt from 1942 to 1945. But from 1945 to 1949, 21 million cars were sold.
Paul Graham captured this era well when he described how, in the early days of TV, there were only three channels. This meant families across the country would all be watching the same show at the same time, creating a culture where people’s lives were more in sync. For the most part, Americans were living similar lifestyles, which shaped their expectations of what "normal" looked like.
But things began to shift. Between the early 1970s and the early 2000s, the economy continued to grow, but in an uneven way. While the post-war culture had created an expectation that people would have similar lifestyles, economic realities started to paint a totally different picture. The biggest difference between the economy from 1945-1973 and 1982-2000 was that the growth no longer benefited everyone equally.
Still, Americans held onto two ideas rooted in the post-war economy: you should have a lifestyle similar to your peers, and taking on debt to finance that lifestyle is perfectly fine.
However, incomes rose sharply for only a smaller group of people, which created a gap in lifestyle. This smaller group (or later what is known as the "top 1%") bought bigger homes, nicer cars, sent their kids to private schools, and took luxury vacations. And everyone else was watching—first on TV, then on the internet.
Housel explains how over the past 75 years, this cultural acceptance of household debt has only grown. From 1963 to 1973, household debt-to-income levels remained fairly stable. But then it started to rise—hitting over 130% by 2007.
Today, debt and lease payments take up just over 8% of income for the wealthiest Americans, but over 21% for those below the 50th percentile.
What started as a strategy to boost the economy after the war has evolved into a culture of over-consumption, where taking on debt to afford a lifestyle beyond your means or to 'Keep Up With the Kardashians' has become normal. And with modern technology, mainly social media, we’re constantly being encouraged to spend more, buy more, and, ultimately... owe more.
social media enters the chat
When social media was first introduced with platforms like MySpace, Facebook, and the early years of Twitter, these platforms genuinely did feel more centered around connection and being social with your friends and family. However, once companies realized that they needed to find a way to keep these platforms free for users to use is when advertisers entered the arena. And once advertisers entered the arena, Big Tech companies had to figure out how to design algorithms to keep people on the platforms for longer periods of time so that users would actually see the ads.
Since then, social media has only been adding fuel to the fire by magnifying this consumer culture. These platforms are driven by algorithms designed to keep us hooked or engaged, and they do that by encouraging constant consumption—whether that’s content, trends, or products. Not to mention that the pressure to "keep up" is everywhere, and the immediacy of online shopping means that people can indulge in impulsive spending in mere seconds. Think of Amazon’s “one-click buy now button” - where the friction to take even one more minute to re-consider your purchase has almost been completely eliminated.
On top of that, social media influencers often promote an idealized lifestyle filled with luxury items, making it seem normal to prioritize material goods over financial stability. This reinforces the idea that debt is not only normal but expected, especially in a capitalistic society where status and self-worth are often measured by what you own.
It perpetuates a system where people are trapped in cycles of consumption, credit, and debt, while the real societal issues are overshadowed by this constant pursuit of the next "must-have" item.
the acceleration
It feels almost dystopian when platforms like TikTok push features like TikTok shop in our faces, especially when every other video you scroll past is filled with real-world issues like climate change, economic instability, and social injustice.
While people struggle with serious and very real challenges, the constant promotion of consumerism through social media creates a surreal disconnect.
It’s as if we're being trained to focus on shopping and material gain, distracting us from the pressing realities outside our screens. And with the introduction of the shops on Instagram and TikTok, this relentless cycle of consumption makes it even easier to become distracted and ignore the larger, and very real systemic issues that affect the well-being of individuals and communities globally.
the perpetual cycle
On top of all that, not only have creators become dependent on things like TikTok shop for income but everyone becomes addicted in the process.
We know this because we know that tech designers use what is known as the Hook Model to get users addicted to their platforms. Essentially, each step of the model taps into psychological triggers that make people want to spend more time on screens.
On the one hand, creators become addicted to that adrenaline rush or dopamine release (the feeling that they receive) that comes along with posting content and receiving the likes, views, shares and then also making money on top of that.
On the other hand, you have the audience, or the consumers, who are already addicted to social media because of the Hook Model and the way that the algorithm is designed, and in addition to that they are also seeing their favorite creators endorse all these different types of products, which can naturally influence them to feel this need or the urge to "keep up."
Because of this, we have people who feel compelled to buy the next big thing in fear of missing out, even if that pushes them into debt. And so now we've entered into this cycle or this system where creators are incentivized to push consumerism in order to sustain their income, while at the same time, audiences are pulled into the never-ending cycle of spending.
It's almost like the platform turns both the creators and the audience into part of the machine—creators become marketers, sometimes even unintentionally, as they need to monetize their content. And for the audience, seeing their favorite creators promote products only reinforces the idea that buying these things is a part of living a fulfilling or trendy lifestyle.
The result?
Social media becomes a feedback loop of endless consumption where material goods take center stage, making it even harder to break free from the pressures of spending, while real-world issues get buried under the weight of this cycle.
In essence, platforms like TikTok and Instagram become both a stage and a marketplace, further entrenching the idea that success is tied to materialism and that financial stability can come from simply keeping up with these trends—regardless of the long-term consequences.
the conclusion
The post-war era encouraged consumption as an economic strategy, making borrowing to buy homes, cars, and gadgets not only acceptable but a cornerstone of modern American life.
Fast forward to today, and social media—particularly platforms like TikTok and Instagram—have only evolved that strategy by blending consumerism with entertainment. The pressure to buy has intensified, but the mechanisms are more subtle, as we’re now watching influencers and creators normalize constant spending in real-time rather than the same three channels that we all once watched in sync in the 70s and 80s.
This modern version of consumer culture keeps the cycle going, where both audiences and creators are participating in a system that rewards over-consumption.
Social media isn’t just adding fuel to the fire—it’s quite literally become a platform where the very idea of debt and materialism is constantly being reinforced, just as it was back in the post-WWII era when debt was normalized to keep the economy afloat. This time, though, it's cloaked in viral trends, instant gratification, and the relentless need for social approval - all while using the Hook Model.
Sources:
The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel
Hooked: How to Build Habit-Forming Products by Nir Eyal
by: Adriana Leos
Chief Creative Officer
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