Residents stroll about a commercial alley in Luyang District, Hefei, Anhui Province, on Dec. 21, which signals a recovering local consumer market. Photo: CFP

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In his speech at the 10th meeting of the Central Financial and Economic Commission on August 17, 2021, General Secretary of the CPC Central Committee Xi Jinping stated: “We have advanced into a historical stage in which we will make solid steps toward common prosperity.”

From eradicating absolute poverty to building a moderately prosperous society in all respects, and further, to bringing about prosperity for all, China has made qualitative leaps in improving people’s wellbeing and living standards. To achieve common prosperity and ensure that the fruits of development are shared by urban and rural residents alike requires reducing disparities not only in income distribution, but also in consumption levels. 

However, existing studies and policies usually focus more on income levels, with inadequate attention to gaps in consumption distribution. In fact, consumption represents a significant part of people’s wellbeing. A crucial goal of the phased advancement of common prosperity is to gradually narrow gaps between individual incomes and actual consumption levels by the end of the 14th Five-Year Plan period (2021–25).

Currently, wide consumption disparities between urban and rural areas, and the resultant consumptive stratification and inequality, have emerged as prominent social problems. Research findings indicate that consumption inequality is more prone to causing undesired social effects than income gaps. Stratification and inequality in the process of consumption are inevitable in China’s push toward common prosperity. The new era calls for a new consumptive sociology and greater attention to the consumption distribution structure. 

Consumption versus income

Studies of either income or consumption inequality reflect worries and contemplations on the wealth gaps and inequality issues worldwide. Economics provides many insights into income and consumption inequalities. Since famed English economist John Keynes introduced the consumption function theory, arguing that consumption is a direct function of current disposable income, other economists have also proposed competitive theoretical models on the consumption function. 

These theoretical models reveal differences in spending power between families with different income levels, emphasizing that changes in the propensity to consume are the principal influencing factor. 

Notwithstanding, the models are obviously problematic. Renowned Australian political economist Joseph Schumpeter rejected the assumption that consumer expenditures are only associated with income. Moreover, income is a rather limited means of measuring economic wellbeing disparities. Many studies argue that consumption is a better indicator to gauge economic wellbeing, and that the measurement of consumption gaps will provide more faithful accounts of inequalities in family welfare. Generally, global inequality research has shifted its focus from income to consumption levels in recent years. 

Currently, in extended studies of social stratification, consumptive stratification is regarded the most promising area. Sociologists agree it is unproductive to consider consumptive stratification an extension or result of income stratification, maintaining that consumptive stratification has a logic independent from income stratification and is a mechanism which reproduces social inequalities. 

Early in the age of classical sociology, sociological pioneers had already noticed the importance of consumption to social stratification. Several concepts they developed, such as Max Weber’s “status group,” Georg Simmel’s “fashion” and “urban life,” and Thorstein Veblen’s “conspicuous consumption,” have left valuable theoretical legacies to contemporary research on consumptive stratification. 

Modern sociology and post-modern sociology prioritize the societal factors behind consumptive stratification, including cultural practices, taste distinction, power symbols, stratum position, status competition, lifestyles, and identity. Many cross-disciplinary studies even place consumption inequality on the political agenda. All these have established the theoretical legitimacy of consumption as a key dimension of social stratification. 

Empirical studies

Empirically, academia proceeds from the following three aspects in consumptive stratification research. First, focus is placed on the criteria for consumption stratification. Most modern scholars follow reputed French sociologist Pierre Bourdieu’s cultural distinction theory to delineate consumption strata. Many scholars classify consumers by their use of objects, while others identify consumers’ social strata through highly symbolic “positional goods.”

On this basis, Chinese scholars have also proposed specific indicators for consumptive stratification. The first category of indicators is made up of single indicators, like the Engel coefficient or the household durables index. The second category is comprised of diverse indicators that combine consumption levels, structures, and patterns. 

Second, several empirical studies concentrate on the mechanism of consumptive strata formation. Previous research shows that the formation of consumptive strata is closely related to occupations, incomes, and consumers’ subjective identification with strata, but is not necessarily consistent with these factors. 

Some studies have identified a correlation between urban residents’ consumer behaviors and their occupational strata, but other academics noted that consumptive strata are not regularly congruent with occupational levels. This demonstrates the complicated relationship between consumption and social stratification. Many scholars have examined the relationship between social stratification and consumer division, and the propensity to consume and consumption characteristics of different social strata. 

Third, scholars are investigating the structural form of consumptive strata, which is the hottest issue among social stratification researchers in China. Previous studies have resulted in diverse portrayals of China’s consumptive stratification landscape, such as an olive-shaped form, a terraced pyramid structure, and a transitional construct between the two. Others contend that family spending models in China show a differentiation trend, rather than convergence. 

Consumption and social stratification have become two themes which interface with each other in modern society. Past research mainly addressed two issues. In theory, scholars have responded to the legitimacy of consumption as a dimension of social stratification. Empirically, they dissected certain concrete problems within consumptive stratification, directing pertinent studies from the margins to the frontier. 

However, issues remain which deserve further discussion, such as the criteria for dividing consumptive strata, the interrelation mechanism between consumptive and social stratification, stratification and inequality in the sphere of public consumption, and structural changes in consumptive stratification during China’s transition from a moderately prosperous society in all respects to common prosperity. 

Common prosperity

The shift from income distribution to consumption distribution will help us holistically understand the connotation and inherent requirements of common prosperity. Narrowing consumption gaps, or reducing consumption inequality, and ensuring that benefits from consumption are shared by urban and rural families is a pressing goal at this stage in the pursuit of common prosperity. It is necessary to reexamine challenges posed by consumption inequality and the necessity of consumption equity in the historical course of achieving common prosperity. Discussions on the status quo and trend of consumptive stratification from the perspective of common prosperity require attention to the following points. 

First, common prosperity covers enrichment of people’s lives in both the material and non-material sense. Not only should individuals’ spending power be enhanced, but access to basic public services should be equalized. These offer new dimensions for us to reflect on the basis for delineating consumptive strata and their manifestation forms. 

In other words, we can make sense of consumption’s new value positioned by common prosperity from the perspective of consumption supply and content. Consumption supply includes private and public consumption. Private consumption relies on individuals’ spending power to acquire consumption resources from the market, while public consumption refers to basic public goods and services provided by the government. 

In terms of content, consumption involves the material, intellectual, and cultural spheres. Material consumption mainly concerns the satisfaction of survival needs, while intellectual and cultural consumption is related to development needs. Differences in the acquisition and distribution of consumption resources lead to gaps, stratification, and widening inequality in consumption. 

Second, achieving common prosperity necessitates efforts to include more people with low-incomes into the middle-income ranks. With the expansion of middle-income groups, consumptive strata will be reshaped structurally. As such, the underlying formation and evolution mechanism should be revisited. 

This inspires researchers to delve deeply into the relationships between core variables, such as income levels, occupational status, and educational levels of urban and rural residents, and consumptive stratification. Also, it is crucial to study how urban-rural gaps in the government provision of basic public services affect consumptive stratification, as well as how consumer philosophy, cultural taste, and cultural values impact people’s position within consumptive strata. 

Third, making solid progress toward common prosperity will certainly set off a new consumption upgrade wave and thus alter the structure of consumptive strata. The olive-shaped distribution structure should be the ideal structure to strive for. This prompts us to consider how we should build a systematic policy framework for public consumption to ensure consumptive equity and prevent gaps between urban and rural families from expanding during the consumption upgrade process, thereby avoiding social risks invited by excessive stratification. The problems listed above, arising from the new development stage, should comprise the research focus of consumptive sociology in the future. 

Lin Xiaoshan is a professor and director of the Department of Sociology and Culturology at the Party School of Zhejiang Provincial Committee of C.P.C.. 

Edited by CHEN MIRONG