Conspicuous consumption was introduced by economist and sociologist Thorstein Veblen in his 1899 book The Theory of the Leisure Class. It is a term used to describe the lavish spending on goods and services acquired mainly for the purpose of displaying income or wealth. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. Economists and sociologists often cite the 1980’s as a time of extreme conspicuous consumption. The yuppie materialised as the key agent of conspicuous consumption in the US. Yuppies didn’t need to purchase BMWs or Mercedes’ cars for example; they did so in order to show off their wealth.
Most developed countries cannot be dependent on private domestic consumption in excess of 60% of its GDP. Not only is the planet running out of resources to produce these goods/services but also the impact on climate change is very significant. The essay that won the 2021 Financial Times ‘Political Economy Club prize’ by Krzysztof Pelc outlines that there is a shift in attitudes of today’s consumer. He states that much of the material wealth that people generate is an expression of signalling to others ‘look at me’. In each case this signalling demands some sort of ‘conspicuous waste’ – a highly visible expenditure of resources that brings no material benefit but simply signals the purchaser’s ability and willingness to waste those resources. As there are more things to buy the greater the pressure on people to buy them and thereby increasing the waste and diluting the means of social distinction. The conspicuous consumer could be a thing of the past as loud labels become a shallow human signal with show-off status being gradually replaced by natural-face-to-face interaction and an emphasis on a sustainable planet.
Owning material things from expensive homes to luxurious cars turn out to provide less happiness than holidays, concerts and special occasions. In the long run it doesn’t matter so much about the USA, European economies and their consumption habits but those that are fast growing and with vast populations – China and India. They have a good chance to shift their trait-display systems before conspicuous consumption becomes locked in as a cultural norm.
The recent global downturn with Coivd-19 has sent out a few mixed messages. Firstly there has been the reduction in consumption as people’s credit lines have dried up but there are those that believe that you should spend more to maintain growth and employment in the economy. With household budgets being very tight smarter consumption rather than less consumption has been advocated by Geoffrey Miller in his book ‘Spent’. He refers to this as more ethical consumption where the production of produce does not involve the abuse of natural resources or the exploitation of people or animals. Furthermore a need to switch from an income tax that promotes short-term runaway consumption to a consumption tax that promotes longer-term ethical investment, charity, social capital, and neighbourly warmth.
“affluent economies such as Britain’s have already reached a point at which further advances in wellbeing are not likely to come from a single-minded focus on growth.” Krzysztof Pelc