Tag Archives: conspicuous consumption

Throwing Great Gatsby parties ignores Fitzgerald’s critiques

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The novel The Great Gatsby is an American classic but here is an argument that a number of people have misinterpreted the point:

Gatsby parties are common, but this one stands out for its extravagance—the expected outlay was $20,000—and the particular irony of its locale. F. Scott Fitzgerald, who wrote The Great Gatsby after dropping out of Princeton, once called the school “the pleasantest country club in America,” which is one of those great insults that sounds like a compliment to those being held out for criticism.

So it is with Gatsby parties, as well. It spoils neither the book nor the new film adaptation, which opens in US theaters on May 10, to say The Great Gatsby is a critique of the American dream. It peels back a gilded veneer of success to reveal the hollow, rotting underbelly of class and capital in the early 1920s. Jay Gatsby’s weekend-long parties are lavish indictments of the whole, hard-charging scene that propelled him to sudden, extraordinary, unscrupulous wealth—”a new world, material without being real, where poor ghosts, breathing dreams like air, drifted fortuitously about,” as Fitzgerald writes toward the end.

Yet so many people seem enchanted enough by the decadence described in Fitzgerald’s book to ignore its fairly obvious message of condemnation. Gatsby parties can be found all over town. They are staples of spring on many Ivy League campuses and a frequent theme of galas in Manhattan. Just the other day, vacation rental startup Airbnb sent out invitations to a “Gatsby-inspired soiree” at a multi-million-dollar home on Long Island, seemingly oblivious to the novel’s undertones.

It’s like throwing a Lolita-themed children’s birthday party.

Perhaps all of this suggests Americans haven’t changed all that much since the 1920s: many still desire to move up and have the ability to spend money in lavish ways. This argument makes me think of Veblen’s concept of “conspicuous consumption,” the behavior of spending money in such a way to show others that you can afford to waste that money. Isn’t that what the Gatsby parties are about? Having a good time doesn’t necessarily require much beyond the people involved but having a lavish and memorable experience, particularly one that is noticed by others, requires more resources.

How the megarich live in London: in the shadows

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A profile of a newer housing development in London suggests the megarich live in secrecy:

The secrecy extends to the media, many of whose members, including myself and the London Sunday Times’s and Vanity Fair’s A. A. Gill, have tried but failed to gain entry to the building. “The vibe is junior Arab dictator,” says Peter York, co-author of The Official Sloane Ranger Handbook, the riotous 1982 style guide documenting the shopping and mating rituals of a certain striving class of Brits, who claimed Knightsbridge’s high-end shopping area, which stretches from Harrods to Sloane Square, as their urban heartland…The really curious aspect of One Hyde Park can be appreciated only at night. Walk past the complex then and you notice nearly every window is dark. As John Arlidge wrote in The Sunday Times, “It’s dark. Not just a bit dark—darker, say, than the surrounding buildings—but black dark. Only the odd light is on. . . . Seems like nobody’s home.”

That’s not because the apartments haven’t sold. London land-registry records say that 76 had been by January 2013 for a total of $2.7 billion—but, of these, only 12 were registered in the names of warm-blooded humans, including Christian Candy, in a sixth-floor penthouse. The remaining 64 are held in the names of unfamiliar corporations: three based in London; one, called One Unique L.L.C., in California; and one, Smooth E Co., in Thailand. The other 59—with such names as Giant Bloom International Limited, Rose of Sharon 7 Limited, and Stag Holdings Limited—belong to corporations registered in well-known offshore tax havens, such as the Cayman Islands, the British Virgin Islands, Liechtenstein, and the Isle of Man.

From this we can conclude at least two things with certainty about the tenants of One Hyde Park: they are extremely wealthy, and most of them don’t want you to know who they are and how they got their money.

This reminds me of Veblen’s idea of conspicuous consumption where the rich spend or waste money to show that they can. In other words, the rich often want people to take notice of their wealth and status. But, this London development suggests the opposite: some of the megarich today want to stay hidden. Why is this? I wonder if it has to do with modern society where having lots of money is not always viewed positively, particularly when tied to particular industries or practices such as storing money in tax havens.

TV programmer: Real Housewives series is “sociology of the rich”

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The programmer behind the Real Housewives shows suggests they might have some sociological value:

Andy Cohen should know as the programmer behind “Top Chef,” the various “Real Housewives” series and his own “Watch What Happens Live.” Cohen, a former producer at CBS News, weighed in on the Bravo success story in an interview with Howard Kurtz on CNN’s “Reliable Sources” Sunday morning.

In picking programs, Cohen said he looks for “something that hasn’t been done before” and a personality different from what viewers have seen…

“In the case of ‘The Housewives,’ I call the ‘Housewives’ sociology of the rich,” Cohen told Kurtz. “I think it’s just fun to watch. It’s guilt-free gossiping that you can have. It’s like the modern-day soap opera, in my mind.”

I would be interested to have a sociologist chime in about whether shows like these reflect an increased interest in the lives of the wealthy and famous say compared to thirty, fifty, or one hundred years ago. When sociological studies like The Gold Coast and the Slum were written in the late 1920s, lower- or working-class residents may have known about the rich or run into them occasionally (and part of the intrigue of this study is that the wealthiest and poorest residents of Chicago lived within blocks of each other) but did they have the kind of vicarious interest in the rich that TV shows today try to promote?

Also: I imagine there are plenty of wealthy people who would argue that these shows only display a small segment of the wealthy lifestyle. What about shows about the millionaires next door or about people who scrimp and save to get their money? These shows seem to encourage people to live a more “wealthy lifestyle,” combining spending (conspicuous consumption, anyone?) and celebrity status.

A second note: it is hard to argue that an edited show about the wealth, a modern-day soap opera, can impart a whole lot about reality or a sociological understanding of the world. It can tell you something…but perhaps more about what Americans like in entertainment than about how people really live.

Tying purchases of larger fast food items to McMansions and status seeking

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A forthcoming study from researchers from Paris and Northwestern University shows that powerless people make larger fast food purchases in order to show their status:

Consumers who feel powerless reach for extra-large portions of food in an effort to increase their social standing in the eyes of others, a new study suggests.

“An ongoing trend in food consumption is consumers’ tendency to eat more and more,” the researchers wrote in the study to be published in the April 2012 print edition of the Journal of Consumer Research. “The increase in food consumption is particularly prevalent among vulnerable populations, such as lower socioeconomic status consumers.”…

The study authors noted that cultural norms associate some larger items, such as houses, vehicles or flatscreen TVs, with wealth, success and high social status. If consumers feel unhappy with their status, they may take this belief and apply it to food, the researchers suggested.

These consumers may attempt to compensate for their perceived lower status by showing others that they can afford to buy the larger sizes, but instead of a Mcmansion they buy larger portion sizes, according to the researchers. In one of the experiments, the participants perceived that consumers who bought a large coffee at a cafe had a higher status than those who chose medium or small — even when the price of all sizes was the same.

It seems that the key here is that these are the decisions made by powerless people, people who have limited, more legitimate ways to show off their status. So do the authors suggest that people with more power don’t buy items to simply show status? This is an argument typically made about McMansions and SUVs: certain people with money feel the need to show off their wealth with these more ostentatious, larger purchases. On the other hand, the implication is that people with more education or taste would consume other sorts of items, not seeking status. Really? A designer larger, green home isn’t also somewhat about status? Going smaller is necessarily less about status?

I would love to see results of similar experiments done with different groups regarding some of the other consumer items mentioned in this report. I suspect we might find that status seeking purchases look different across different socioeconomic statuses, echoing Bourdieu’s distinctions between those who little capital (in this fast food study) versus more capital and also between those with more education and more money.

McMansions in the cemetery

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This may seem like a strange application of the word “McMansion” but this I have seen several other articles that apply the term to cemeteries. With just the right amount of money, one can purchase a plot in one of New York City’s “most prestigious cemeteries”:

Woodlawn, the final home of honorary New Yorkers such as the publisher Joseph Pulitzer, the composer Irving Berlin and the musician Duke Ellington, calls itself the “resting place of a host of history’s greats”…

Labelled the “McMansions of the dead” by Susan Olsen, the cemetery historian, these tombs come complete with features, such as ornate carvings and mosaics, that are detailed in glossy brochures.

“We’re a little pricier than most places,” said Ms Olsen. “It’s not only because of the quality of our mausoleums but also the service we provide.

“Our lawns are mowed every 10 days, we have full-time security and we transport visitors to the graveside. It’s sort of like staying in the fancier hotels. We’re certainly the Ritz of cemeteries.”

I like the emphasis on service: that money should buy you more than just a piece of real estate.

The allusion to McMansions apparently refers to the wealth and opulence of such homes. But this isn’t fit just for anyone with money: in addition, Olsen also suggests this trend was started by people with “new money” who wanted to establish themselves. If you can practice conspicuous consumption in life, why not also in death?

I suspect wealthy families might not like having their plots and mausoleums labeled “McMansions.” Could this hurt the cemetery?

McMansions and the “inconspicuous consumption” of the 1990s

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One aspect of McMansions that is frequently discussed is the tie between such houses and larger patterns of excessive consumption. Here is a quote from a CEO of a Pennsylvania construction company that does just this:

“The new-home industry will have to respond to the market for smaller lot size and efficient home construction,” Wagman said. “We’re past the building of McMansions. That type of inconspicuous consumption is so ’90s.”

To be honest, I didn’t quite know what this term “inconspicuous term” meant. I know what conspicuous consumption as it is a common sociological term first introduced by Thorstein Veblen in his 1899 work The Theory of the Leisure Class. So I went digging around Google for the meaning of this term and how it relates to Veblen’s term. This piece from The Economist in 2005 argues that conspicuous consumption is now much more complex in wealthy, Western societies and so inconspicuous consumption still shows off wealth but in more subtle ways:

As well as traditional conspicuous consumption and “self-treating”, Ledbury Research identifies two other motives that are driving buying by the rich: connoisseurship and being an “early adopter”. Both are arguably consumption that is conspicuous only to those you really want to impress. Connoisseurs are people whom their friends respect for their deep knowledge of, say, fine wine or handmade Swiss watches. Early adopters are those who are first with a new technology. Silicon Valley millionaires currently impress their friends by buying an amphibian vehicle to avoid the commuter traffic on the Bay Bridge. Several millionaires have already paid $50,000 a go to clone their pet cat.

Who knew that spending lavishing to show off one’s wealth and status had become so difficult? In 2008, Virginia Postrel says something similar:

The shift away from conspicuous consumption—from goods to services and experiences—can also make luxury more exclusive. Anyone with $6,000 can buy a limited-edition Bottega Veneta bag, an elaborately beaded Roberto Cavalli minidress, or a Cartier watch. Or, for the same sum, you can register for the TED conference. That $6,000 ticket entitles you to spend four days in California hearing short talks by brainy innovators, famous (Frank Gehry, Amy Tan, Brian Greene) and not-so-known. You get to mingle with smart, curious people, all of whom have $6,000 to spare. But to go to TED, you need more than cash. The conference directors have to deem you interesting enough to merit one of the 1,450 spots. It’s the intellectual equivalent of a velvet rope.

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. You can’t park a mattress in your driveway, but it will last for decades and you can enjoy it every night.

So we’ve moved away from garish displays of spending to more exclusive but somewhat more hidden ways to display wealth.

If we return then to the quote from the construction CEO, what exactly was he getting at? A few thoughts:

1. If he is adhering to a similar definition as The Economist piece or Virginia Postrel, then he is suggesting that McMansions were a more subtle display of wealth. But it seems that a lot of the criticism of McMansions comes from the idea that the owners are trying (desperately) to flaunt their wealth in the form of their large, garish house. So is McMansion buying a conspicuous or inconspicuous act? Might there be different opinions if we talk to the buyers/owners of such homes (after all, people need to live somewhere) versus McMansion critics (but people don’t have to live in mass-produced, poorly designed homes)?

2. He suggests that the inconspicuous consumption of McMansions took place during the 1990s. The late 1990s is where the term McMansion started to take off but the houses themselves seemed to receive the most attention from roughly 2000 to the start of the current economic/housing crisis. Perhaps the 1990s get singled out here because of a good economy in the latter half of the decade but much McMansion building and purchasing was still taking place until recent years.

(3. I wonder if he simply didn’t mean to say “conspicuous consumption” and said “inconspicuous consumption” instead.)

(Amazon also has a 1997 book that uses this term as a title: Inconspicuous Consumption: An Obsessive Look at the Stuff We Take for Granted, from the Everyday to the Obscure. Interestingly, it is written by Paul Lukas, the mind also behind Uni Watch, a blog with the tagline of “The Obsessive Study of Athletics Aesthetics.” It appears Lukas is still writing about the same topics for ESPN.com but I haven’t seen his material featured in years. When it was more prominently featured, I would read his thoughts quite often.)

Americans buy a lot of stuff they don’t need

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Americans are known for being consumers. In fact, Americans spend quite a bit of money on non-essential goods:

This Easter weekend, Americans will spend a lot of money on items such as marshmallow peeps, plush bunnies and fake hay, begging a question: How much does the U.S. economy depend on purchases of goods and services people don’t absolutely need?

As it turns out, quite a lot. A non-scientific study of Commerce Department data suggests that in February, U.S. consumers spent an annualized $1.2 trillion on non-essential stuff including pleasure boats, jewelry, booze, gambling and candy. That’s 11.2% of total consumer spending, up from 9.3% a decade earlier and only 4% in 1959, adjusted for inflation. In February, spending on non-essential stuff was up an inflation-adjusted 3.3% from a year earlier, compared to 2.4% for essential stuff such as food, housing and medicine.

It would be helpful if this post had more details about the “non-scientific study” and what data is being examined. Nonetheless, it is interesting to see this story at Easter time: isn’t Christmas supposed to be our most commercial holiday? There does seem to be more stories in recent years about the increased spending at Halloween and Easter. Perhaps we just like holidays because they are excuses to spend!

Here are two possible conclusions regarding this data:

The sheer volume of non-essential spending offers fodder for various conclusions. For one, it could be seen as evidence of the triumph of modern capitalism in raising living standards. We enjoy so much leisure and consume so much extra stuff that even a deep depression wouldn’t – in aggregate — cut into the basics.

Alternately, it could be read as a sign that U.S. economic growth relies too heavily on stimulating demand for stuff people don’t really need, to the detriment of public goods such as health and education. By that logic, a consumption tax – like the value-added taxes common throughout Europe—could go a long way toward restoring balance.

Interesting options: we spend so much on these things because we can (conspicuous consumption?) or we frivolously throw our money away at things that don’t really matter while ignoring important issues. Neither sound particularly good. The second one does seem to be at the root of most advertising: make a pitch so that the consumer thinks they “need” a product. Don’t people need iPhones, new cars, and lots of beer?

Ultimately, we might need some more numbers to settle this debate. How does the discretionary spending of the American individual compare to that of other nations? (During this recent recession, we have heard about how Americans had a lower savings rate than past Americans going into this period but how do we compare to other countries?) What are the total costs of living in such an economy (which certainly must help create jobs and generate wealth for someone) vs. one that does put more money into education or infrastructure? How much do average Americans think they should be spending on non-essential items and if given the choice, would they want to spend more?

h/t Instapundit

Conspicuous consumption during a recession

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Trying to make sense of how recent events like the lavish wedding of Chelsea Clinton, the furor over Michelle Obama’s trip to Spain, and other similar events, can take place during this recession, Bella English of the Boston Globe turns to the concept of conspicuous consumption.

Sociologist Juliet Schor comments:

“It’s adding insult to injury at a time like this when so many Americans are suffering such extreme economic pain,’’ says Juliet Schor, a sociology professor at Boston College and author of “Plenitude: The New Economics of True Wealth.’’ “Those kinds of conspicuous displays of wealth undermine everyone else. They make us feel poorer and less satisfied with what we have.’’

Thorstein Veblen coined the term conspicuous consumption. According to Veblen, consumption is not just about buying necessities; it is about projecting an image and establishing status. The wealthy intentionally are wasteful in their consumption in order to show that they can afford to be wasteful.

Schor is expressing what the people toward the bottom of the economic ladder feel when the rich show off their riches. Should the rich cut down on their spending in times like these? Or perhaps they could draw less attention to themselves? My guess is that if one has the money, one is going to spend it whether it is a boom time or a down time. The only barrier to this may be a popular backlash – if the consumption actually leads to decreased status (rather than increased status), it may not be worth it.