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Much of the debate over how to address the economic crisis has focused on a single word: regulation. And it's easy to understand why. Bad behavior by a variety of businesses landed us in this mess--so it seems rather obvious that the way to avoid future economic meltdowns is to create, and vigorously enforce, new rules proscribing such behavior. But the truth is quite a bit more complicated. The world economy consists of billions of transactions every day. There can never be enough inspectors, accountants, customs officers, and police to ensure that all or even most of these transactions are properly carried out. Moreover, those charged with enforcing regulations are themselves not immune to corruption, and, hence, they too must be supervised and held accountable to others--who also have to be somehow regulated. The upshot is that regulation cannot be the linchpin of attempts to reform our economy. What is needed instead is something far more sweeping: for people to internalize a different sense of how one ought to behave, and act on it because they believe it is right.

That may sound far-fetched. It is commonly believed that people conduct themselves in a moral manner mainly because they fear the punishment that will be meted out if they engage in anti-social behavior. But this position does not stand up to close inspection. Most areas of behavior are extralegal; we frequently do what is expected because we care or love. This is evident in the ways we attend to our children (beyond a very low requirement set by law), treat our spouses, do volunteer work, and participate in public life. What's more, in many of those areas that are covered by law, the likelihood of being caught is actually quite low, and the penalties are often surprisingly mild. For instance, only about one in 100 tax returns gets audited, and most cheaters are merely asked to pay back what they "missed," plus some interest. Nevertheless, most Americans pay the taxes due. Alan Lewis's classic study The Psychology of Taxation concluded that people don't just pay taxes because they fear the government; they do it because they consider the burden fairly shared and the monies legitimately spent. In short, the normative values of a culture matter. Regulation is needed when culture fails, but it cannot alone serve as the mainstay of good conduct.

So what kind of transformation in our normative culture is called for? What needs to be eradicated, or at least greatly tempered, is consumerism: the obsession with acquisition that has become the organizing principle of American life. This is not the same thing as capitalism, nor is it the same thing as consumption. To explain the difference, it is useful to draw on Abraham Maslow's hierarchy of human needs. At the bottom of this hierarchy are basic creature comforts; once these are sated, more satisfaction is drawn from affection, self-esteem, and, finally, self-actualization. As long as consumption is focused on satisfying basic human needs--safety, shelter, food, clothing, health care, education--it is not consumerism. But, when the acquisition of goods and services is used to satisfy the higher needs, consumption turns into consumerism--and consumerism becomes a social disease.

The link to the economic crisis should be obvious. A culture in which the urge to consume dominates the psychology of citizens is a culture in which people will do most anything to acquire the means to consume--working slavish hours, behaving rapaciously in their business pursuits, and even bending the rules in order to maximize their earnings. They will also buy homes beyond their means and think nothing of running up credit-card debt. It therefore seems safe to say that consumerism is, as much as anything else, responsible for the current economic mess. But it is not enough to establish that which people ought not to do, to end the obsession with making and consuming evermore than the next person. Consumerism will not just magically disappear from its central place in our culture. It needs to be supplanted by something.

A shift away from consumerism, and toward this something else, would obviously be a dramatic change for American society. But such grand cultural changes are far from unprecedented. Profound transformations in the definition of "the good life" have occurred throughout human history. Before the spirit of capitalism swept across much of the world, neither work nor commerce were highly valued pursuits--indeed, they were often delegated to scorned minorities such as Jews. For centuries in aristocratic Europe and Japan, making war was a highly admired profession. In China, philosophy, poetry, and brush painting were respected during the heyday of the literati. Religion was once the dominant source of normative culture; then, following the Enlightenment, secular humanism was viewed in some parts of the world as the foundation of society. In recent years, there has been a significant increase in the influence of religious values in places like Russia and, of course, the Middle East. (Details can be found in John Micklethwait and Adrian Wooldridge's new book, God is Back--although, for many, he never left.) It is true that not all these changes have elevated the human condition. The point is merely that such change, especially during times of crisis, is possible.

To accomplish this kind of radical change, it is neither necessary nor desirable to imitate devotees of the 1960s counterculture, early socialists, or followers of ascetic religious orders, all of whom have resisted consumerism by rejecting the whole capitalist project. On the contrary, capitalism should be allowed to thrive, albeit within clear and well-enforced limits. This position does not call for a life of sackcloth and ashes, nor of altruism. And it does not call on poor people or poor nations to be content with their fate and learn to love their misery; clearly, the capitalist economy must be strong enough to provide for the basic creature comforts of all people. But it does call for a new balance between consumption and other human pursuits.

There is strong evidence that when consumption is used to try to address higher needs--that is, needs beyond basic creature comforts--it is ultimately Sisyphean. Several studies have shown that, across many nations with annual incomes above $20,000, there is no correlation between increased income and increased happiness. In the United States since World War II, per capita income has tripled, but levels of life satisfaction remain about the same, while the people of Japan, despite experiencing a sixfold increase in income since 1958, have seen their levels of contentment stay largely stagnant. Studies also indicate that many members of capitalist societies feel unsatisfied, if not outright deprived, however much they earn and consume, because others make and spend even more: Relative rather than absolute deprivation is what counts. This is a problem since, by definition, most people cannot consume more than most others. True, it is sometimes hard to tell a basic good from a status good, and a status good can turn into a basic one (air conditioning, for instance). However, it is not a matter of cultural snobbery to note that no one needs inflatable Santas or plastic flamingos on their front lawn or, for that matter, lawns that are strikingly green even in the scorching heat of summer. No one needs a flat-screen television, not to mention diamonds as a token of love or a master's painting as a source of self-esteem.

Consumerism, it must be noted, afflicts not merely the upper class in affluent societies but also the middle class and many in the working class. Large numbers of people across society believe that they work merely to make ends meet, but an examination of their shopping lists and closets reveals that they spend good parts of their income on status goods such as brand-name clothing, the "right" kind of car, and other assorted items that they don't really need.

This mentality may seem so integral to American culture that resisting it is doomed to futility. But the current economic downturn may provide an opening of sorts. The crisis has caused people to spend less on luxury goods, such as diamonds and flashy cars; scale back on lavish celebrations for holidays, birthdays, weddings, and bar mitzvahs; and agree to caps on executive compensation. Some workers have accepted fewer hours, lower salaries, and unpaid furloughs.

So far, much of this scaling-back has been involuntary, the result of economic necessity. What is needed next is to help people realize that limiting consumption is not a reflection of failure. Rather, it represents liberation from an obsession--a chance to abandon consumerism and focus on ... well, what exactly? What should replace the worship of consumer goods?

The kind of culture that would best serve a Maslowian hierarchy of needs is hardly one that would kill the goose that lays the golden eggs--the economy that can provide the goods needed for basic creature comforts. Nor one that merely mocks the use of consumer goods to respond to higher needs. It must be a culture that extols sources of human flourishing besides acquisition. The two most obvious candidates to fill this role are communitarian pursuits and transcendental ones.

Communitarianism refers to investing time and energy in relations with the other, including family, friends, and members of one's community. The term also encompasses service to the common good, such as volunteering, national service, and politics. Communitarian life is not centered around altruism but around mutuality, in the sense that deeper and thicker involvement with the other is rewarding to both the recipient and the giver. Indeed, numerous studies show that communitarian pursuits breed deep contentment. A study of 50-year-old men shows that those with friendships are far less likely to experience heart disease. Another shows that life satisfaction in older adults is higher for those who participate in community service.

Transcendental pursuits refer to spiritual activities broadly understood, including religious, contemplative, and artistic ones. The lifestyle of the Chinese literati, centered around poetry, philosophy, and brush painting, was a case in point, but a limited one because this lifestyle was practiced by an elite social stratum and based in part on exploitation of other groups. In modern society, transcendental pursuits have often been emphasized by bohemians, beginning artists, and others involved in lifelong learning who consume modestly. Here again, however, these people make up only a small fraction of society. Clearly, for a culture to buy out of consumerism and move to satisfying higher human needs with transcendental projects, the option to participate in these pursuits must be available on a wider scale.

All this may seem abstract, not to mention utopian. But one can see a precedent of sorts for a society that emphasizes communitarian and transcendental pursuits among retired people, who spend the final decades of their lives painting not for a market or galleries but as a form of self- expression, socializing with each other, volunteering, and, in some cases, taking classes. Of course, these citizens already put in the work that enables them to lead this kind of life. For other ages to participate before retirement, they will have to shorten their workweek and workday, refuse to take work home, turn off their BlackBerrys, and otherwise downgrade the centrality of labor to their lives. This is, in effect, what the French, with their 35-hour workweeks, tried to do, as did other countries in "old" Europe. Mainstream American economists--who argue that a modern economy cannot survive unless people consume evermore and hence produce and work evermore--have long scoffed at these societies and urged them to modernize. To some extent, they did, especially the Brits. Now it seems that maybe these countries were onto something after all.

A society that downplayed consumerism in favor of other organizing principles would not just limit the threat of economic meltdown and feature a generally happier populace; it would have other advantages as well. Such a society would, for example, use fewer material resources and, therefore, be much more compatible with protecting the environment. It would also exhibit higher levels of social justice.

Social justice entails redistribution of wealth, taking from those disproportionally endowed and giving to those who are underprivileged through no fault of their own--for reasons ranging from past injustices and their lingering contemporary effects to technological changes to globalization to genetic differences. The reason these redistributions have been surprisingly limited in free societies is that those who command the "extra" assets tend also to be those who are politically powerful. Promoting social justice by organizing those with less and forcing those in power to yield has had limited success in democratic countries and led to massive bloodshed in others. So the question arises: Are there other ways to reduce the resistance of elites to redistribution?

The answer is found when elites derive their main source of contentment not from acquiring more goods and services, but from activities that are neither labor nor capital intensive and, hence, do not require great amounts of money. Communitarian activities require social skills and communication skills as well as time and personal energy--but, as a rule, minimal material or financial outlays. The same holds for transcendental activities such as prayer, meditation, music, art, sports, adult education, and so on. True, consumerism has turned many of these pursuits into expensive endeavors. But one can break out of this mentality and find that it is possible to engage in most transcendental activities quite profoundly using minimal goods and services. One does not need designer clothes to enjoy the sunset or shoes with fancy labels to benefit from a hike. Chess played with plastic pieces is the same game as the one played with carved mahogany or marble pieces. And I'm quite sure that the Lord does not listen better to prayers read from a leatherbound Bible than those read from a plain one, printed on recycled paper. (Among several books that depict how this kind of culture can flourish is Seven Pleasures by Willard Spiegelman.) In short, those who embrace this lifestyle will find that they can achieve a high level of contentment even if they give up a considerable segment of the surplus wealth they command.

As for actually putting this vision into practice: The main way societies will determine whether the current crisis will serve as an event that leads to cultural transformation or merely constitute an interlude in the consumerism project is through a process I call "moral megalogues." Societies are constantly engaged in mass dialogues over what is right and wrong. Typically, only one or two topics dominate these megalogues at any given time. Key recent issues have included the legitimacy of the 2003 invasion of Iraq and whether gay couples should be allowed to marry. In earlier decades, women's rights and minority rights were topics of such discussions. Megalogues involve millions of members of a society exchanging views with one another at workplaces, during family gatherings, in the media, and at public events. They are often contentious and passionate, and, while they have no clear beginning or endpoint, they tend to lead to changes in a society's culture and its members' behavior.

The megalogue about the relationship between consumerism and human flourishing is now flickering but has yet to become a leading topic--like regulation. Public intellectuals, pundits, and politicians are those best- positioned to focus a megalogue on this subject and, above all, to set the proper scope for the discussion. The main challenge is not to pass some laws, but, rather, to ask people to reconsider what a good life entails.

Having a national conversation about this admittedly abstract question is merely a start, though. If a new shared understanding surrounding consumption is to evolve, education will have a crucial role to play. Schools, which often claim to focus solely on academics, are actually major avenues through which changes in societal values are fostered. For instance, many schools deeply impress on young children that they ought to respect the environment, not discriminate on racial or ethnic grounds, and resolve differences in a peaceful manner. There is no reason these schools cannot push back against consumerism while promoting communitarian and transcendental values as well. School uniforms (to counter conspicuous consumption) and an emphasis on community service are just two ways to work these ideas into the culture of public education.

For adults, changes in the workplace could go a long way toward promoting these values. Limits on overtime, except under special conditions (such as natural disasters); shorter workweeks; more part- and flex-time jobs; increased freedom to work from home; allowing employees to dress down and thereby avoid squandering money on suits and other expensive clothes--all these relatively small initiatives would encourage Americans to spend more time on things besides work.

Finally, legislation has a role to play. Taxes can discourage the purchase of ever-larger houses, cause people to favor public transportation over cars, and encourage the use of commercial aviation rather than private jets. Government could also strike a blow against consumerism by instituting caps on executive pay.

Is all this an idle, abstract hypothesis? Not necessarily. Plenty of religious Americans have already embraced versions of these values to some extent or other. And those whose secular beliefs lead them to community service are in the same boat. One such idealist named Barack Obama chose to be a community organizer in Chicago rather than pursue a more lucrative career.

I certainly do not expect that most people will move away from a consumerist mindset overnight. Some may keep one foot in the old value system even as they test the waters of the new one, just like those who wear a blazer with jeans. Still others may merely cut back on conspicuous consumption without guilt or fear of social censure. Societies shift direction gradually. All that is needed is for more and more people to turn the current economic crisis into a liberation from the obsession with consumer goods and the uberwork it requires-- and, bit by bit, begin to rethink their definition of what it means to live a good life.

Amitai Etzioni served as president of the American Sociological Association and is the author of The Active Society.

By Amitai Etzioni