Conspicuous consumption

The sociologist and economist Thorstein Veblen coined the term “conspicuous consumption”, and was a co-founder of the institutional economics movement.

Conspicuous consumption is the spending of money for and the acquiring of luxury goods and services to publicly display economic power — either the buyer’s income or the buyer’s accumulated wealth. Sociologically, to the conspicuous consumer, such a public display of discretionary economic power is a means either of attaining or of maintaining a given social status. Moreover, invidious consumption, a more specialized sociologic term, denotes the deliberate conspicuous consumption of goods and services intended to provoke the envy of other people, as a means of displaying the buyer’s superior socio-economic status.

History and evolution

In the 19th century, the term conspicuous consumption was introduced by the economist and sociologist Thorstein Veblen (1857–1929), in the book The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), to describe the behavioural characteristics of the nouveau riche (new rich) social class who emerged as a result of the accumulation of capital wealth during the Second Industrial Revolution (ca. 1860–1914).^[1] In that social and historical context, the term “conspicuous consumption” was narrowly applied to describe the men, women, and families of the upper class who applied their great wealth as a means of publicly manifesting their social power and prestige, be it real or perceived.

In the 20th century, the significant improvement of the standard of living of a society, and the consequent emergence of the middle class, broadly applied the term “conspicuous consumption” to the men, women, and households who possessed the discretionary income that allowed them to practice the patterns of economic consumption — of goods and services — which were motivated by the desire for prestige, the public display of social status, rather than by the intrinsic, practical utility of the goods and the services proper. In the 1920s, economists such as Paul Nystrom (1878–1969), proposed that changes in the style of life, made feasible by the economics of the industrial age, had induced to the mass of society a “philosophy of futility” that would increase the consumption of goods and services as a social fashion; an activity done for its own sake. In that context, “conspicuous consumption” is discussed either as a behavioural addiction or as a narcissistic behaviour, or both, which are psychologic conditions induced by consumerism — the desire for the immediate gratification of hedonic expectations.

In that time, the economist and the sociologist defined conspicuous consumption as the socio-economic behaviours of consumerism primarily practiced by rich people; yet the research of the finance professor Nikolai Roussanove, and the conomists Kerwin Kofi Charles and Erik Hurst, indicated that conspicuous consumption is a complex of socio-economic behaviours very common to the poor social classes and economic groups, and common to the societies of countries with emerging economies. Among such people of the “poor” social classes, the displays of wealth psychologically combat the impression of poverty, often because he or she belongs to a social class or to an economic group whom society perceive as “poor”.^[2] In The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (1996) Thomas J. Stanley and William D. Danko reviewed the traditional definition of conspicuous consumption, wherein the examination of the style of life of rich Americans indicated that most tended to economic frugality and practiced a modest standard of living.^[3]

In the 21st century, emerged the term conspicuous compassion, describing a variant consumerist behaviour that is the practice of publicly donating great sums of money to charity, as a means of enhancing the social prestige of the donor man, woman, or family; thus buildings emblazoned with the donor’s name.^[4]

Distinctions of type

Enhanced prestige: Buying and displaying luxury goods communicate that the conspicuous consumer has discretionary income for things inessential.

Since the 19th-century coinage of the term conspicuous consumption, and its denotation of “consumption-as-status”, Thorstein Veblen’s sociologic and economic propositions have been broadened and deepened to comprehend and describe the socio-economic behaviours that people practice in the contemporary pursuit of social prestige.

• Definitions

A contemporary dictionary definition: “conspicuous consumption” is the buying of many things, especially expensive things, that are not necessary to one’s life, and which purchases are done in a way that will make people take notice of the spending of money.^[5] In the Journal of Economic Issues article “Veblen, Bourdieu, and Conspicuous Consumption” (2001), A. Trigg defined conspicuous consumption as the behaviours whereby a man or a woman can display great wealth by means of idleness — such as expending much time in the practice of leisure activities, and spending much money to consume luxury goods and services.^[6]

• Self-worth

In the book Income, Saving and the Theory of Consumer Behavior (1949), J.S. Duesenberry proposed that a person’s conspicuous consumption psychologically depends not only upon the actual level of spending, but also depends upon the degree of his or her spending, as compared with and to the spending of other people. That the conspicuous consumer is motivated by the importance, to him or to her, of the opinion of the social and economic reference groups for whom are performed the patterns of conspicuous consumption.^[7][8]

• Aggressive ostentation

In 2009, the television reporter Dick Meyer (CBS News) proposed that conspicuous consumption is a form of anger towards society, an “aggressive ostentation” that is an antisocial behaviour, which arose from the social alienation suffered by men, women, and families who feel they have become anonymous in and to their societies. The feeling of alienation is aggravated by the decay of the communitarian ethic essential to a person feeling him or herself part of the whole society.^[9]

• Shelter and transport

In the U.S. of the 1950s, there began the trend towards building over-sized houses, domestic dwellings that were larger-than-needed, by the nuclear family; fifty years later, in the year 2000, such a practice in conspicuous consumption resulted in people buying large houses that were double the average size required to comfortably house a nuclear family. The negative consequences of either buying or of building an over-sized house was either the loss or the reduction of the family’s domestic recreational space — either the back yard or the front yard, or both; the spending of old-age retirement funds to pay for a too-big house; and an over-long commuting time, from house to job, and vice versa, because the required plot of land was unavailable near a city. Furthermore, over-sized houses facilitated other forms of conspicuous consumption, such as an over-sized garage for the family’s over-sized motor vehicles; buying more clothing to fill larger clothes closets; et cetera; hence, conspicuous consumption becomes a self-generating cycle of spending money for the sake of social prestige. Analogous to the consumer trend for over-sized houses is the trend towards buying over-sized light-trucks, specifically the off-road sport-utility vehicle type (cf. station wagon and estate car), as a form of psychologically comforting conspicuous consumption, because such big motor-vehicles usually are consumed by people who work in a city, but live and reside in an over-sized house in a suburban community.^[10]

• Prestige

In the Journal of Marketing Theory and Practice article “Status Consumption in Consumer Behaviour: Scale Development and Validation” (1999), J.K. Eastman et al. said that status consumption is based upon conspicuous consumption (among other contributions); yet, because there exist overlapping definitions, the literature does not establish definitive denotations for the terms “status consumption” and “conspicuous consumption”.^[11][12] Furthermore, in the Journal of Product & Brand Management article “Status Brands: Examining the Effects of Non-product-related Brand Associations on Status and Conspicuous Consumption” (2002), A. O’Cass and H. Frost reported that sociologists often have incorrectly and inaccurately used the terms “status consumption” and “conspicuous consumption” as interchangeable and equivalent terms. Moreover, in a later study, the authors found that, as sociologic constructs, the terms “status consumption” and “conspicuous consumption” denote different sociologic behaviours.^[13] Regarding the ambiguities of denotation and connotation of the term “conspicuous consumption”, in the European Journal of Marketing article “Conspicuous Consumption: A Literature Review” (1984), R. Mason reported that the classical, general theories of consumer decision-processes do not readily accommodate the construct of “conspicuous consumption”, because the nature of said socio-economic behaviours varies according to the social class and the economic group studied.^[14]

• Motivations

In the International Marketing Review article “Status Consumption in Cross-national Context: Socio–Psychological, Brand and Situational Antecedents” (2010), Paurav Shukla reported that, whilst researchers recognize the importance of the consumer’s social and psychological environment, the definition of the construct of status-directed consumption remains ambiguous, because, in order to develop a comprehensive general theory, social scientists are intellectually required to accept two fundamental assumptions that do not always concord. First, although the “rational” (economic) and the “irrational” (psychologic) elements of consumer decision-making often influence a person’s decision to buy particular goods and services, researchers and marketers usually have considered the rational element as the dominant factor affecting the person’s decision to buy the particular goods and services. Second, that the man or woman (consumer) has perceived the utility of the product (the goods, the services) as his or her prime consideration in evaluating its usefulness; the reason for buying the product.^[15] These assumptions, required for the development of a general theory of brand selection and brand purchase, are problematic, because the resultant theories tend either to misunderstand or to ignore the “irrational” element in the behaviour of the person-as-consumer; and because conspicuous consumption is a behaviour predominantly “psychological” in motivation and expression, Therefore, a comprehensive general theory would require a separate construct for the psychological elements of the socio-economic phenomenon that is conspicuous consumption.

Consumerism theory

As proposed by Thorstein Veblen in the 19th-century, conspicuous consumption (spending money to buy goods and services for their own sakes) explains the psychological mechanics of a consumer society, and the increase in the number and the types of the goods and services that people consider necessary to and for their lives in a developed economy. Supporting interpretations and explanations of contemporary conspicuous consumption are proffered in Consumer Culture (1996), by C. Lury,^[16]Consumer Culture and Modernity (1997), by D. Slater,^[17]Symbolic Exchange and Death (1998), by Jean Baudrillard,^[18] and Spent: Sex, Evolution, and the Secrets of Consumerism (2009), by Geoffrey Miller.^[19] Moreover, Hiding in the Light (1994), by D. Hebdige, proposed that conspicuous consumption is a form of displaying a personal identity,^[20][17][21] and a consequent function of advertising, as proposed in Ads, Fads, and Consumer Culture (2000), by A.A. Berger.^[22] Each variant interpretation and complementary explanation is derived from Thorstein Veblen’s original sociologic proposition, that conspicuous consumption was a psychological end in itself, from which the practitioner (man, woman, family) derived the honour of superior social status.

Criticism

As sociologic theory, conspicuous consumption proposes that the public display of discretionary buying power, either as income or as accumulated wealth, does not provide direct utility to the man or the woman behaving thus, unlike the consumption of food and shelter, necessary commodities which do provide direct utility — physical and psychological satisfaction — to the buyer.

A remedy

In the New York Times newspaper article “The Big City: Rich and Poor, Consumed by Consuming” (1998), to remedy the social and psychological malaise that is conspicuous consumption, the economist Robert H. Frank proposed eliminating the personal income tax, and that it be replaced with a progressive tax upon the yearly sum of discretionary income so spent by men and women.^[23]

See also

References

External links

Look up conspicuous consumption in Wiktionary, the free dictionary.

• Theory of the Leisure Class by Thorstein Veblen at Project Gutenberg
• Thorstein Veblen: Conspicuous Consumption, 1902 at Fordham University's "Modern History Sourcebook"
• Conspicuous consumption at its worst... shooting at Toys R Us on Black Friday
• Wal-Mart employee trampled to death by shoppers hungry for deals.