In 1899, a scholar named Thorstein Veblen published a book he thought was a work of serious economic and social theory. Somewhat to his chagrin, reviewers and readers thought "The Theory of the Leisure Class" was satire.
Still, it was popular. And Veblen would surely be delighted that his misunderstood theories spawned a phrase that is instantly recognizable – and meaningful – over 100 years later: "conspicuous consumption."
Veblen wanted to use anthropology to understand contemporary economics. He didn't believe that consumers and individuals acted rationally in pursuit of their economic self-interest.
He thought much modern economic behavior had primitive roots, relics of the customs and survival mechanisms of a predatory society. But his turn of the century audience thought it was hilarious when he compared the fine silver and mansions of Midwest burghers to tribal chieftains who had more goats than his family could possibly eat and more beer than they could possibly drink.
But Veblen was dead serious about this conspicuous consumption, which he argued was a way for people to signal their wealth and status to others. A key to this kind of social display is waste. The wealthy chief had more food, drink, shelter and weaponry than he could consume or use – and this made him safer and more powerful; the wealthy industrialist had more homes, staff, cars, and airplanes.
The other key is the creation of easily visible symbols of wealth. The chieftain had fat wives, huge feasts, fine feathers and thick furs; the railroad baron had private trains, silk clothes, gold watches and Rembrandts.
In some European and Asian cultures, dress and ornament could signal caste and status with extraordinary precision. And that is why even now a Judith Leiber handbag or a pair of Manolo Blahnik shoes are important: they may not be prettier or longer lasting than less costly alternatives, but they are instantly recognizable to strangers as expensive and wasteful. Conspicuous consumption.
Veblen thought that as societies grow larger and more dispersed, conspicuous consumption needed to get more complex in order to work. It's one thing to show a village of 100 that you're rich; it's another signify this to a city of one million. Chiefs had to start adorning their wives and children and servants to reach larger groups.
In today's nomadic country of 250 million, signifying wealth takes far more sophistication involving homes, cars, airplanes, clothes, jewelry for a network of family, servants and supplicants, as well as publicity and celebrity.
Veblen is on my mind because I recently spent a week in the Chicago suburb where I grew up (to the extent that I did, in fact, grow up) and I thought I saw a whole lot more conspicuous consumption than I had when we baby boomers were growing up there – conspicuous consumption generally perpetrated by we baby boomers, all grown up.
The houses are gargantuan. The shops are peddlers of luxury, not utility. The cars are all fancy. The jewelry is gaudy. The parks are empty. I think all this is apparent to most anyone who visits big cities and their suburbs.
Some caveats and full disclosure: By any statistical measure, Glencoe, Illinois was as well-off in the 60s, 70s and 80s as it is today, though it is also true that the gaps between the absolute super-rich percentiles and the rest of the economic ladder are wider than they have been in generations. It is also true that by any statistical measure, I am a conspicuous consumer compared to the population as a whole, though not compared to the super-rich.
Indeed, this was an original criticism of Veblen: his theory that conspicuous consumption was a crude form of lording it over the less fortunate was seen as simple elitism and snobbery from an egghead.
The critic was H.L. Mencken:
"Do I enjoy a decent bath because I know that John Smith cannot afford one - or because I delight in being clean? Do I admire Beethoven's Fifth Symphony because it is incomprehensible to Congressmen and Methodists - or because I genuinely love music? Do I prefer terrapin à la Maryland to fried liver because plowhands must put up with the liver - or because the terrapin is intrinsically a more charming dose? Do I prefer kissing a pretty girl to kissing a charwoman because even a janitor may kiss a charwoman - or because the pretty girl looks better, smells better and kisses better?"So these are my questions: Is conspicuous consumption more conspicuous than in other periods? Is there anything new or different about today's strain? Is there anything more pernicious going on now than what Veblen spotted a century ago?
I haven't reached any conclusions (yet). But these are some worries and questions:
Example: A recent study of tax returns from 2003 shows that the super-rich are the least generous of all working-age Americans. Two groups – those who made over $10 million in 2003 and those who made between $500,000 and $1 million - made charitable gifts of 0.4 percent of their assets; taxpayers the same age who made between $50,000 and $100,000 contributed 2.5 percent of their assets to charities, more than six times what the uber-rich gave. Taxpayers between 36 and 50 who made $50,000 to $100,000 are twice as charitable as people the same age that made $200,000 to $10 million.
The crooks of the Enron, Tyco and financial services scams are highly-educated, baby boom MBAs and lawyers operating in large bureaucracies; they aren't rogue swindlers and they aren't "fresh off the boat." They are products of the 'me-first' post-war generation and a long era of prosperous, American conspicuous consumption.
It seems that some of the checks on the materialism or ambition of our parents and grandparents – be they religious, cultural (political, aesthetic or social – have weakened. Political correctness is a tepid, vapid creed compared to Puritanism.
In these anonymous conditions, consumption has to be even more conspicuous to be noticed because it's only strangers who do the noticing – and even some of them are virtual. And the anonymity makes people act out to get noticed. Real community – knowing the people you live around – is a known deterrent to all kinds of antisocial behavior.
So let's go back to Glencoe, for example. My mother lived her whole life within about five miles of where she was born. Most of her friends were friends from childhood. She rarely needed to do business with people she didn't personally know. You bought appliances from Charlie at Skokie Electric, who also fixed them. Arthur Weinecke owned hardware and toy store, Wally King owned the record store and you bought sports stuff from Ray. Johnny, a tallish midget who once threw a snow shovel at my dog, delivered prescriptions. There were no chains in Glencoe, no spas, no luxury stores.
This is both a social and commercial community. I would argue that the decline of those communitarian ties are alienating and contribute to consumption – to public signaling – that is not just conspicuous but passively antisocial. Call it aggressive ostentation. And that's not satire.
Dick Meyer, a veteran political and investigative producer for CBS News, is the Editorial Director of CBSNews.com, based in Washington.
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By Dick Meyer