Conspicuous consumption

Conspicuous Consumption

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Conspicuous consumption

Conspicuous consumption is a term used to describe the lavish spending on goods and services acquired mainly for the purpose of displaying income

Income

Income, refers to consumption opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received......
or wealth

Wealth

Wealth is an abundance of valuable material possessions or resources. The word is derived from the old English wela, which is from an Indo-European word stem....
. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status

Social status

In sociology or anthropology, social status is the honor or prestige attached to one's position in society . The stratification system, which is the system of distributing rewards to the members of society, determines social status....
. A very similar but more colloquial term is "keeping up with the Joneses

Keeping up with the Joneses

"Keeping up with the Joneses" is a catchphrase in many parts of the English language-speaking world, referring to the comparison to one's neighbor as a benchmark for social class or the accumulation of material goods....
".

Invidious consumption, a necessary corollary

Corollary

A corollary is a statement which follows readily from a previously proven statement. In mathematics a corollary typically follows a theorem. The use of the term corollary, rather than proposition or theorem, is intrinsically subjective....
, is the term applied to consumption of goods and services for the deliberate purpose of inspiring envy

Envy

Envy may be defined as an emotion that "occurs when a person lacks another?s [perceived] superior quality, achievement, or possession and either desires it or wishes that the other lacked it." It can also derive from a sense of low self-esteem that results from an upward social comparison threatening a person's self image: another person...
in others.

term conspicuous consumption was introduced by economist and sociologist Thorstein Veblen

Thorstein Veblen

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History and evolution of the term

The term conspicuous consumption was introduced by economist and sociologist Thorstein Veblen

Thorstein Veblen

Thorstein Bunde Veblen was a Norwegian-American sociology and economist and a founder, along with John R. Commons, of the Institutional economics movement....
in his 1899 book The Theory of the Leisure Class
The Theory of the Leisure Class

The Theory of the Leisure Class is a book, first published in 1899, by the Norwegian-American economist Thorstein Veblen while he was a professor at the University of Chicago....
. Veblen used the term to depict the behavioral characteristic of the nouveau riche
Nouveau riche

Nouveau riche , or new money, refers to a person who has acquired considerable wealth within his or her generation. This term is generally to emphasize that the individual was previously part of a lower socioeconomic rank, and that such wealth has provided the means for the acquisition of goods or luxuries that were previously unobt...
, a class emerging in the 19th century as a result of the accumulation of wealth

Capital accumulation

Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth....
during the Second Industrial Revolution

Second Industrial Revolution

The Second Industrial Revolution, typically dated between 1870 and 1914, was a second phase of the Industrial Revolution, involving several developments within the chemical industry, electrical industry, petroleum industry, and steel industry....
. In this context, the application of the term should be narrowed to the elements of the upper class

Upper class

The upper class is a concept in sociology that refers to the group of people at the top of a social hierarchy. Members of an upper class often have great power over the allocation of resources and governmental policy in their area....
who use their enormous wealth to manifest social power, whether real or perceived.

With significant improvement of living standards and the emergence of the middle class

Middle class

Middle class is the group of people in contemporary society who are between the working class and nobility. This socioeconomic class includes professionals, highly skilled workers, and lower and middle management....
in the 20th century, the term conspicuous consumption is now broadly applied to individuals and households with expendable incomes whose consumption patterns are prompted by the utility of goods to show their status

Status

Status is a state, condition or situation. In common usage it may refer to:*Social status*Economic status*HIV status*Status *Status quo*Status symbol...
rather than any intrinsic utility of such goods. In the 1920s, economists such as Paul Nystrom theorized that lifestyle changes brought on by the industrial age were inducing a "philosophy of futility

Philosophy of futility

Philosophy of futility is a phrase coined by Columbia University marketing professor Paul Nystrom to describe the disposition caused by the monotony of the new industrial age....
" in the masses, which would increase fashionable consumption. Thus, the concept of conspicuous consumption has been discussed in the context of addictive

Addiction

The term "addiction" is used in many contexts to describe an obsession, compulsion, or excessive physical dependence or psychological dependence, such as: drug addiction, video game addiction, crime, alcoholism, compulsive overeating, problem gambling, computer addiction, pornography addiction, etc....
or narcissistic

Narcissism

Narcissism describes the trait of excessive self-love, based on self-image or ego.The term is derived from the Greek mythology of Narcissus . Narcissus was a handsome Greek youth who rejected the desperate advances of the nymph Echo ....
behaviors induced by consumerism

Consumerism

Consumerism is the equation of personal happiness with Consumption and the purchase of material possessions.The term is often associated with criticisms of consumption starting with Thorstein Veblen....
, the desire for immediate gratification, and hedonic

Hedonism

Hedonism is a school of philosophy which argues that pleasure has an intrinsic value and is the most important pursuit of humanity....
expectations.

Social and economic effects

Since socio-economic status (the socially-created effects of wealth or income) is a positional good

Positional good

Positional goods are products and services whose value is mostly a function of their ranking in desirability, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality....
which is in fixed supply, any conspicuous consumption generates negative externalities. In fact, conspicuous consumption may be seen as the in-kind scarcity rent

Economic rent

Economic rent is the difference between what a factor of production is paid and how much it would need to be paid to remain in its current use....
of socio-economic status. Minimizing economic inefficiency by capturing this rent and curbing wasteful consumption is an important argument for luxury tax

Luxury tax

For the special case of the term "luxury tax" applied to the salaries of athletes, see Luxury tax A luxury tax is a tax on luxury goods -- products not considered essential....
es and other corrective policies. As John Stuart Mill

John Stuart Mill

John Stuart Mill , United Kingdom philosopher, political economy, civil servant and Parliament of the United Kingdom, was an influential liberalism thinker of the 19th century....
argued:

External links

at Fordham University's "Modern History Sourcebook"

Conspicuous consumption

History and evolution of the term

Social and economic effects

See also

External links