The richer a society or peer group, the less important visible spending becomes.
theatlantic.com
theatlantic.com
"Child enrichment has replaced the yuppie trends of the late 1980s and early 1990s, when it was important to own a BMW and Rolex watch. Today, the children of this same generation have become the vital signs of success... Messages that speak to mothers about bettering the lives of their children, enriching their experiences, and creating more intelligent students can be seen in print and electronic ads." (p. 75)
"In the 1990s yuppies shifted from spending on BMWs and Rolexes to their children. Children became their status symbol. Discretionary dollars switched from diamond bracelets to private violin instructors and university sports camps located seven states away." (p. 82)
"A baby is not an accessory, exactly, but when you go outside with a baby, all eyes go to the baby. All of the sudden, it's not so important to spend as much money on yourself-- you spend on the baby." (p. 201)
(before someone points this out - I realize she doesn't say children are just a fad, but that's a "natural" inference from what she is saying, and I would argue it's wrong)
I do agree that there's a shift in spending patterns among the wealthy (and Bobos in Paradise is a good book and explains it well) but I don't think that it's due to a desire to be less conspicuous, nor does it have that effect within their social circles. (They're sure to show off their $20,000 slate shower stall.) I think people are just shifting toward buying stuff they like rather than stuff they think other people will be impressed by.
1.7 million and it looks like a piece of junk. You'd think that rich people of that quality would at least get something of actual value, like a 100 million gallons of horse shit. Now that's a status symbol that says something about the wearer.
Well, I'm assuming the guy already has a Gulfstream.
Most Patek's are not that much though. I think you can get a number of them in the $30-$50k range. I think that one is produced in very limited quantities.
But yeah, give me a $700 Movado any day. Looks better, is more durable, keeps time far more accurately.
Now you can get a watch at WalMart for $10 that keeps better time than the most expensive mechanical watch. Technology lets us all live the same way. The rich are reduced to comical displays of gluing diamonds to the outdated mechanical monsters of the past.
Some of the "rich watches" are quite beautiful, both physically and mechanically. Most are not. In any case, they're just bling now.
The funny thing is that the exclusive brands are crap at delivering actual value in their products compared with mass market manufacturers. A Lamborghini is a piece of junk compared to a top of the line VW and will look like dogshit after five years. Similarly, lots of the most expensive men's clothing you can buy in upmarket boutiques will be falling apart after two washes. Don't even get me started about haute couture fashion.
The point is that once you've pushed the envelope on quality and good design, all you can add is higher price to make a product exclusive. So the rich will actually give money for nothing - high price is an aim in itself, even at the expense of real virtues. Which is really weird.
As for goods, forget showing off. “If you want to live like a billionaire,
buy a $12,000 bed,” says a financial-planner friend of mine.
In the spirit of the quoted financial planner, therefore, I propose to discuss and uncover the areas where a lot of money is still able to buy more comfort and capability than a mere paycheck. If we could shrink these gaps, standard-of-living per dollar would increase, which would be very nice.
+ The quality of living quarters is basically as good as it can be, even for smallish sums. Fifty million dollars won't improve the quality of our hot water, good beds, good insulation and home entertainment by much. Rich people can still buy huge properties, but the utility of a private forest is small. Perhaps the biggest change that could happen here would be if people decided to not to skimp too much on the parts that matter.
+ Free time and attention. It is a pain in the ass to have to work for a living, usually at a somewhat painful job. Not quite sure how to tackle this problem. Robotics and artificial intelligence, maybe. It won't be solved in the forseeable future.
+ Efficient personal transportation still requires a lot of money. Think private jets: being able to travel to any location on earth as quickly and painlessly as anyone. This will probably remain a hurdle in the forseeable future, although the cost has come down a lot quite recently. It remains a matter of cheap airframes and cheap energy. Believe what you may, but being able to move ten of fifteen times faster than a car is a great boon. Get a private pilot's license, and you'll get the idea.
+ Personal attention. Money can buy all sorts of servants, therapists, coaches and mentors. I question how much of a boon many of these services actually are, but some of them would be very comfy. For example massage therapists, housemaids or chaffeurs. Also, learning new skills comes easier if you have world-class teaching talent available: the kind of teaching talent which would be bored to death and vastly underpaid teaching in public schools. Ironically, the most useful of these services (housemaids or nannies, for example, or prostitutes if we want to step into darker territory) can already be rented on the open market quite cheaply. Not to the same level of availability or quality as a billionaire could, but still vastly better than nothing.
+ Personalized health care. Even in Scandinavia, getting an appointment with the doctor and then an appointment with the required specialist is annoying enough to make you wish for something better. Health care is expensive enough as it is, but having a specialist watching you closely for a long time is much more so.
Can anyone think of any areas I missed? Perhaps some of these points could be separated into more sub-points..a list like this compiled 100 years ago would probably lump a lot of the luxuries we have today (washing machines, hot water, automobiles) into the same categories...
for example, I own about a month's worth of everything. clothes, dishes, etc. At the end of the month I pay someone to clean everything for me. It's WELL worth the small amount of money (it's only 3 hours of work) I pay because I hate doing that stuff and having it off my mind entirely is a relief. I severely curtailed frivolous spending by carrying less cash on me. I'm reluctant to use my credit card, so now I buy less things on the spur of the moment.
and everything is fairly neatly organized, a months worth of stuff is more compact than you think when everything is stacked and/or folded up. I have lots of storage bins and a large closet.
I would argue that we can eliminate a lot of jobs without losing much. The advances in advertising and PR have made our economy one where, with time, production increases demand - from Nike creating demand for overpriced shoes (the majority of which's cost is marketing), to the military industrial complex creating demand for wars.
Begin fat does not motivate one eat fast-food.
Being poor does motivate someone to buy a lottery ticket.
"There'll always be gamblers. Maybe this way some good comes out of it."
"There'll always be suicidal people. Maybe if give them organ donor cards some good comes out of it."
Sanctioning self destructive behavior for the sake of gain is tantamount to performing the act itself.
>Begin fat does not motivate one eat fast-food.
>Being poor does motivate someone to buy a lottery ticket.
>
No you never had a causal link. In fact you already said they could both be caused by other factors (poor money sense) and it didn't matter - poverty & ticket buying are correlated therefore that's hypocrisy. In the same way, some genetic factor could both make you fat & make you eat mcdonalds.
When was the last time anyone purchased a lottery ticket with a gun to their head?
Some old lady while I was there probably burned through 50 bucks buying lottery tickets and scratching them off like the vending machine was a slot machine.
kind of sad really
I'm important and successful.
It's just more covert than a diamond studded grill. In fact, it makes the message much more powerful because now only the people you care about, rich people and aspiring rich people, know how important and successful you are.
Beyond gene propagation why care?
We are wired to care what others think. It tends to make us more attractive to potential mates and increase our evolutionary fitness.
The Biodiesel is proclaimed proudly with bumper stickers, but the car stereo is completely hidden behind the stock Mercedes grilles, and when it is parked, the faceplate is detached and the unit hidden with the circa 1990's cassette stereo faceplate.
I want my lower carbon footprint recognized, but the stereo I just want for the better sound.
http://www.millionairfair.ru/eng/main/ http://news.bbc.co.uk/1/hi/business/7109164.stm
The point being that the variation in visible consumption between groups is vast, and this article picked just two groups two compare. It's junk science. And IMHO, it's borderline racist.
Keep reading.
The same is true for whites. Controlling for differences in housing costs, an increase of $10,000 in the mean income for white households—about like going from South Carolina to California—leads to a 13 percent decrease in spending on visible goods. “Take a $100,000-a-year person in Alabama and a $100,000 person in Boston,” says Hurst. “The $100,000 person in Alabama does more visible consumption than the $100,000 person in Massachusetts.” That’s why a diamond-crusted Rolex screams “nouveau riche.” It signals that the owner came from a poor group and has something to prove.
On the other hand, while somebody who makes $100k and lives in Boston won't exactly be struggling to make ends meet, he'll have a lot less money to spend frivolously than somebody making that much in Alabama.
Blacks are poorer (on average) than whites. That's a simple correlation and it says nothing about why black people are poorer. They also looked at the data in a way that eliminates race as a variable and found the same patterns.
I'd say it was a good read.
If you're going to point to the early 20's and the like as a parallel (a time when economic prosperity was high), then I beg you to compare tribal behavior in Africa, and consumption habits within Latin America where economic prosperity is extremely low across the board.
However, I am partially in agreement with the context of your post. MTV/VH1 has been destructive in the picture it paints of meaningful wealth, and I feel media has played a significant factor in "keeping up with the Jones" to the masses. Before the 90's, exposure to this type of wealth-behavior was relatively contained. In retrospect, the credit crunch has hyper-inflated our economy and caused businesses to scale up while a tidal wave formed below. I can't tell you how many people I know that are living a facade, white, black, and brown. It's sad really.
On a side note: That picture has to be Cris Angel's hand. I want to know which Vegas tycoon thought he was a good idea. slap