Saturday, June 14, 2008

Inconspicuous Consumption

Keeping up with the Joneses and showing off your "bling" is a must in L.A. Deviate from it, and people will think you're a loser. Are you? Not necessarily, says The Atlantic -- referring to a recent University of Chicago study. The study started out as an analysis of the wealth gap between black and white Americans, but revealed a wealth-bling gap that transcends race: "Conspicuous consumption is not an unambiguous signal of personal affluence. It’s a sign of belonging to a relatively poor group. Visible luxury thus serves less to establish the owner’s positive status as affluent than to fend off the negative perception that the owner is poor."

"The motive is emulation—the stimulus of an invidious comparison which prompts us to outdo those with whom we are in the habit of classing ourselves," wrote Thorstein Veblen, who first coined the term conspicuous consumption in 1899. "That’s why a diamond-crusted Rolex screams 'nouveau riche,'" The Atlantic adds. "It signals that the owner came from a poor group and has something to prove."

So, what do the truly wealthy do with their money? "The richer a society or peer group, the less important visible spending becomes," the study says. "If you want to live like a billionaire, buy a $12,000 bed," retorts a financial planner. "You can’t park it in your driveway, but it will last for decades and you can enjoy it every night."

Bling is only "A development phase," the University of Chicago researchers argue. "It declines as countries, regions, or distinct groups get richer." Yet, the researchers fail to give a time lag, which makes the findings of the study puzzling, especially in a country like America where so many ultra-wealthy keep blinging their way through life. Is it because we're still a relatively new country? What does it actually take to attain understated luxury? How many generations of affluence does it require? Or is it simply proof that money cannot buy everything -- and certainly not class?
illustration via