

The richer a society or peer group, the less important visible spending becomes. - theoneill
http://www.theatlantic.com/doc/200807/consumption

======
marvin

      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.
    

Ever since I read PG discuss the smallness of the actual differences between
the lives of tech millionaires and Joe Average, I've wondered how much money
it would take to live with principally the same standard of living as someone
who can buy whatever they want. Obviously, most of the wealth of a typical
billionaire is never used for any material purpose.

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...

~~~
nazgulnarsil
I've been touting this for awhile now. You can decrease your cost of living
and Increase your standard of living at the same time by figuring out what you
truly value and redistributing your income.

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.

~~~
mattmaroon
I wouldn't want to enter the kitchen in which dishes have been accumulating
for weeks.

~~~
dreish
I'm picturing a lot of cardboard boxes and stacks of Jolt.

------
Alex3917
Pamela Paul's new book Parenting Inc has an interesting take on this:

"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)

~~~
andreyf
Definitely an interesting take, but I can't help but think that valuing your
children's education and upbringing is not just a fashion of our times, but
something also universally noble. Certainly more noble than BMW's and
Rolexes...

(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)

~~~
Alex3917
People have always valued their kids, but what the author argues is new is
that parents now derive their social status primarily from how much money they
spend on their children.

------
mattmaroon
I find that richer people still flash their wealth, just in a different way.
For instance, I know a lot of very wealthy people who wear Patek Phillipe
watches that cost in the 6 figure range. This would not appear to be showing
off to an average American, who couldn't spot or guess the price of an uber-
expensive watch, but in wealthy circles everyone notices.

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.

~~~
mynameishere
[http://www.gemnation.com/base?processor=viewWatchDetails&...](http://www.gemnation.com/base?processor=viewWatchDetails&watch_id=1502)

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.

~~~
johnyzee
Beyond a certain threshold they're just making shit up to make ever more
exclusive stuff for rich people to spend their surplus on, without adding any
more value than exclusivity itself.

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.

~~~
falsestprophet
Actually, ultra high-end cars are apprenticing assets unlike any Volkswagen.

------
wmeredith
This is common sense. If people make negative assumptions about your peer
group, you end up with something to prove.

------
wallflower
"A household with income under $13,000 spends, on average, $645 a year on
lottery tickets, about 9 percent of all income." via Jason Kottke

~~~
utnick
i was renting a dvd from a redbox at a supermarket last weekend and next to
the redbox is a lottery ticket vending machine with various tickets ranging
from 1$ to 50$!

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

~~~
akd
Yeah I heard two grocery store employees debating how you get paid when you
win the jackpot :(

------
mchristoff
I think the higher income bracket you belong to the less acceptable it is to
spend your money on things that are considered "conspicuous". My feeling is
that Patek Philippe watch and Italian marble counter tops express the same
basic thing to world:

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.

~~~
gaius
Hilariously in many parts of Italy they use marble for floors because it's
_cheaper_ than carpet.

------
aswanson
Unless you are signaling quality to potential mates I see no reason for
showing status to anyone. Same sex signaling (among heterosexuals) has always
confounded me, as well as old people (beyond reproductive years), and people
with a ton of kids.

Beyond gene propagation why care?

~~~
akd
The behaviors that evolve for gene propagation have unintended effects outside
the sphere of the mating game. Evolution is not perfect.

~~~
aswanson
You are right, especially if you are not conscious of their effect. We have
all been victims of the selfish ones, at one time or another...

------
stcredzero
I have a 13 year old Mercedes Diesel fueled entirely on Biodiesel and a $3000
car stereo with J&L subwoofer and subwoofer amp installed.

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.

------
hugh
Interesting, but it ignores the other half of the phenomenon: richer peer
groups generally tend to frown upon ostentatious displays of wealth.

~~~
ionfish
Really? I imagine the Millionaire Fair will be going out of business very soon
then.

<http://www.millionairfair.ru/eng/main/>
<http://news.bbc.co.uk/1/hi/business/7109164.stm>

~~~
eru
From the article "Rich people in poor places want to show off their wealth."

------
bocajuniors
it seems that one important benefit of beeing rich is that, if you are a
male,it attracts females(the opposite doesn't seem to be true, maybe this
could account for lower female salaries?).so, if you are a rich man, of course
you will want to make it show.if you are the king everyone knows you are the
king, if not you have to do what you have to do...

------
ajross
I haven't finished reading the article yet, but this strikes me as a classic
example of innapropriate generalization. The hip-hop culture example seems to
reinforce the argument, but many other subcultures fail: think of the french
aristocracy in the 18th century as a classic example of conspicuous
consumption. Or the roaring 20's. Or various calvinist groups of the 17th
century as examples of the austere poor. Or...

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.

~~~
Retric
_I haven't finished reading the article yet_

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._

~~~
pchristensen
Boston has way more much richer people, so showing off with stuff like a Rolex
won't do much good. Your $10K watch isn't that impressive if there are people
that could buy the watch company.

~~~
maw
Indeed.

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.

