Wednesday, May 18, 2005

Nation of Rebels II

When people first begin to be able to take care of essential needs, they do indeed behave like conformist consumers. This is because cookie-cutter goods are the cheapest. Levitt houses built after the Second World War represented the first houses most of their owners had ever had a dream of purchasing. They may have been little boxes made of ticky-tacky, as the song goes, but they were affordable. The first mass-produced cars had no accessories either. But far from being conformist consumers, people who live in societies, like America, that are well past the subsistence stage of development, buy things that will confer distinction upon them. "Most people spend money not on things that help them fit in, but on things that allow them to stand out from the crowd. They spend their money on things that offer distinction. People buy what makes them feel superior."

About twenty years ago, I went through a phase of reading in the field of economics, a phase never likely to be repeated in this lifetime. The name Thorstein Veblin sticks in my mind not only because he was affiliated with the University of Chicago. Veblin became something of a hero to me upon my reading that, a bachelor, he would collect his dirty dishes in the bathtub until he had an enormous pile, then hose them all down in a single high energy session, in keeping with the theory of economies of scale. But that is not why he is a hero to the authors. There are other reasons to venerate him, it seems.

"First, it is worth noting that in developing countries, economic growth does an awful lot to promote overall happiness. It is only once a society has become quite wealthy that growth no longer delivers increased happiness. Second, there is still a fairly strong correlation between relative wealth and happiness, even in very rich societies.... In Veblen's view, the fundamental problem with the consumer society is not that our needs are artificial, but that the goods produced are valued less for their intrinsic properties than for their role as markers of relative success.... The problem is that while an increase in 'material' goods can generate increased happiness for everyone, status is an intrinsically zero-sum game. In order for one person to win, someone else must lose." After a certain point, that is, having stuff that your grandfather couldn't imagine having does not make you happier. Only having stuff your contemporaries don't have does the trick.