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The new, subtle ways the rich signal their wealth
- anguswithgusto 9y agotl;dr: rich people spend more on education and fancy lunches for their kids. Also, they pay attention to reading the right magazines, like The Economist and The New Yorker so everyone knows they went to fancy schools. Choice quotes: >"Given that everyone can now buy designer handbags and new cars..." >"Knowing which New Yorker articles to reference or what small talk to engage in at the local farmers’ market enables and displays the acquisition of cultural capital, thereby providing entry into social networks that, in turn, help to pave the way to elite jobs, key social and professional contacts, and private schools." This article is really stupid.
- TrickyRick 9y agoHow is it really stupid? I thought it was an interesting analysis of consumer behavior
- SwellJoe 9y ago"Given that everyone can now buy designer handbags and new cars..." That's a pretty stupid assertion.
- TrickyRick 9y ago"Everyone" is a hyperbole but compared to 1899 it's relatively true, especially if the author means everyone in the middle class
- pm90 9y agoTaken out of context, of course. But as a sibling mentioned, in the context of middle class being able to afford luxury goods without bankrupting themselves, that statement does make sense.
- relyio 9y agoI think calling the article "really stupid" is excessive although I agree it hardly brings anything new to the table. That is fine, but the title had me expecting a little more. As it is I find it a poor re-hash of Pierre Bourdieu's work on cultural capital ("The Inheritors"). I recommend it, it's marvelously well-written in French. Unfortunately, I do not have an English translation to recommend.
- TrickyRick 9y agoMaybe I'm just uneducated on the spendings of the top 1% but to me it felt new. To each his own I guess
- wfunction 9y agoHow the (English-speaking) rich signal their wealth: by referring to marvelous works in French that have no worthy English translations. :P
- general_so_chkn 9y agoI don't see much analysis, just an assumption that educating yourself through college or reading magazines is an act of "signalling" your wealth. If you have the means to afford these things I think it's rather silly to assume you're doing so to demonstrate how much money you have... There isn't much substance here.
- pm90 9y agoI think there is sufficient analysis for a "news" article. Its not a scientific publication. And the crux seems to be this quote: > The US Consumer Expenditure Survey data reveals that, since 2007, the country’s top 1% (people earning upwards of $300,000 per year) are spending significantly less on material goods, while middle-income groups (earning approximately $70,000 per year) are spending the same, and their trend is upward.
- anguswithgusto 9y ago"The new, subtle ways" of signalling wealth in this article are neither new, subtle, nor interesting. You're telling me: -Rich people bragging about going to/sending their kids to nice schools -Eating fancy food -Ostentatiously namedropping highbrow pop culture are some sort of recent phenomena? Come on :)
- shalmanese 9y agoTraditionally, there was "old money" and "new money" where entry into the old money class didn't rely solely on wealth but also on subtle social signifiers. What's new is the emergence of a class of "new old money" that adopts the same social signalling techniques of old money, even with new wealth.
- pm90 9y agoNo, that's not it. The main point of the article has been that the rich, instead of spending outrageous amounts of money on material things, are instead opting for non-material things to spend money on, and to signal their socio-economic status amongst peers. This has traditionally not been the case, where the rich spent a lot of money on fancy cars, houses and such to be as different as possible from other strata of society. Now such ostentatious displays of wealth are no longer sufficient to signal your high socio-economic standing and that is a rather huge change.
- not_kurt_godel 9y ago> More profoundly, investment in education, healthcare and retirement has a notable impact on consumers’ quality of life, and also on the future life chances of the next generation. Today’s inconspicuous consumption is a far more pernicious form of status spending than the conspicuous consumption of Veblen’s time. Spending money on education, healthcare, and retirement is pernicious? Self-perpetuating, perhaps, but pernicious, really?
- reitzensteinm 9y ago"having a harmful effect, especially in a gradual or subtle way." That seems like exactly the word to use for self perpetuating inequality to me...
- not_kurt_godel 9y agoAnd what's the alternative? Should people make a conscious decision to be less educated, less healthy, and less prepared for retirement?
- Smaug123 9y agoIn response to the statement that "People are defecting on the prisoners' dilemma.", you are saying "What's the alternative? Should people make a conscious decision to get a worse outcome?"
- general_so_chkn 9y agoThere's this very strange and very dangerous notion making the rounds that because some people don't have the means to access something (i.e. a college education) then those that do have the means should abstain out of...what, solidarity? Because it's unfair? Problems of inequality are complex and have many different factors at play. I think it's extremely dangerous to discourage the wealthy from using their wealth in this manner. We need to explore the root causes of problems of inequality and this type of rhetoric does NOTHING but fester resentment.
- tushar-r 9y agoPosted for the 7th time in 7 days (different posters), this article has touched a nerve :-)
- ajhurliman 9y agoSo by admission of the article, they're not really signaling their wealth, they're being more inconspicuous. I'm not even sure what the claim is anymore...
- nopinsight 9y agoSpending more on health, education, and retirement is thinking long-term. Is that a cause or an effect of being wealthy? Perhaps in the old days, when overt classism was still accepted, conspicuous consumption yielded something for the spender. Now it is often frawned upon in the West, why bother? So the money saved is invested in consumption/investments with better returns. That is rational.
- lordgrenville 9y agoExactly. the article may be correct that luxury spending is declining, but investing in education, retirement and health aren't replacements for that - there are other reasons why they correlate with wealth, but they're not for social capital. Also, from my small anecdotal familiarity with the rich, I don't think that they impress each other by name-dropping The Economist and New Yorker articles (perhaps a subset of the educated do, but not all of them are rich). I believe the real luxury good of today is exclusivity and privacy: private dating apps and social networks, vacations, clubs, etc. This article covers it well: https://www.nytimes.com/2017/05/09/magazine/how-privacy-became-a-commodity-for-the-rich-and-powerful.html?mcubz=0 https://www.nytimes.com/2017/05/09/magazine/how-privacy-beca...
- vilmosi 9y ago> Spending more on health, education, and retirement is thinking long-term. Is that a cause or an effect of being wealthy? Probably an effect. You can't choose to invest long-term if you can't afford it.
- nopinsight 9y agoThere are many poor people in developing countries who sacrifice a lot of things and save every bit they can to invest in the education of their children. This phenomenon is very pronounced in China and several countries with Confucius influence. Families with this kind of mindset are unlikely to stay poor for more than 1-2 generations. (This is probably one reason why hundreds of millions in China arose from poverty to middle-class in a single generation, although I do not see many economists in the West discussing it in the context of China's rise.) --- "Zhang Yang, a bright 18-year old from a rural town in Anhui province in China was accepted to study at a prestigious traditional medicine college in Hefei. But the news was too much for his father Zhang Jiasheng. Zhang's father was partly paralysed after he suffered a stroke two years ago and could no longer work. He feared the family, already in debt to pay for medicines, would not be able to afford his son's tuition fees. As his son headed home to celebrate his success, Zhang Jiasheng killed himself by swallowing pesticide. Zhang's case is an extreme. But East Asian families are spending more and more of their money on securing their children the best possible education. In richer Asian countries such as South Korea and emerging countries like China, "education fever" is forcing families to make choices, sometimes dramatic ones, to afford the bills. There are families selling their apartments to raise the funds to send their children to study overseas. --- Extreme Spending ... It is not just middle-class families. Workers also want their children to do better than themselves and see education as the only means of ensuring social mobility. Some go deep into debt. "Families are spending less on other things. There are many cases of rural parents not buying healthcare that their doctors urge on them... Part of the reason is that they would rather spend the money on their children's education," said Mr Kipnis. " From http://www.bbc.com/news/business-24537487 http://www.bbc.com/news/business-24537487
- atemerev 9y agoReading "The Economist"? Talking to vendors at organic farmer's market? Breastfeeding? (Not that there's anything wrong with that). All of these signal middle class more than anything else. The rich people I know display the following marks of belonging: 1) the ability to make a call and solve any petty problem they have (forgot to take a prescription to the pharmacy? Make a call, and the medicine will be released anyway, with compliments). 2) being relaxed and serene like a Buddhist monk 3) displaying levels of trust impossible to the less rich people. Like "you know Bitcoin and how it works, right? Could you buy some for me? Here's $30,000". I barely knew the guy!
- kozak 9y agoIn your example with a phone call and a pharmacy, how would that work (the exact mechanism)? I assume that you imply that this is happening in a first-world country, of course.
- atemerev 9y agoSwitzerland. I don't know and they don't tell :) But probably he has called his concierge or family office, who called his family doctor, who told the pharmacist to release the medicine on his behalf.
- vosper 9y agoI'm starting to feel sorry for rich people. They're not allowed to buy nice things because that is just obnoxious showing off, and now they're not allowed to spend their money on education, retirement, and healthy food? Maybe the author should stop bearing around the bush and just tell the rich off for being rich!
- wyager 9y agoThis article is an archetypal example of raw, unpasteurized Crab Mentality. More focus on healthy behaviors and education? God forbid!
- pm90 9y agoNowhere did the article say it is a bad thing. Only that the rich have changed their behavior.
- pravinva 9y agoSo, people are status conscious.go over to overcoming bias.com and read it from the master Robin Hanson. Every thing we do is based on stay.including pretending to care about inequality
- scandox 9y agoAs a non-American and occasional visitor the most obvious class distinction is Teeth. The American middle-class have great looking teeth, bought and paid for. What's funny is they talk about other countries having bad teeth, ignoring the fact that all you have to do is walk into some other neighbourhood and see all the bad teeth you want...
- pm90 9y agoInteresting.. but class distinction b/w middle and upper class or middle and lower class? After you mentioned it though I do agree on this... dental care is incredibly good in the US and covered by insurance so many middle class Americans do have incredibly good looking teeth.
- Raphael_Amiard 9y agoThere is nothing new or subtle about it. This subject has been thoroughly explored by the French school of sociology, most notably Pierre Bourdieu, some 60 years ago, with much more detail and academic rigor. I understand that an article cannot show the same level of detaik as a sociology book, but framing it as new is either disingenuous or uneducated.
- Banthum 9y agoIt's interesting reading a pseudo-critique of the "new cultural elite" coming from an author who lives in that elite and an institution that represents that elite globally. It's like a weird ritualistic self-criticism exercise, to demonstrate goodness and status. Like watching a beauty pageant contestant answer a question about her flaws. Which is part of the virtue signaling that article is about! It's so meta. And it's nothing like what an outsider to that subculture would write. --- I'd actually say that getting a useless degree in an intensively political field is one of the more interesting 'new' forms of conspicuous consumption. Back in the day, people used to get tutored in Latin or Christian theology to have upper-class cred. Now they get gender studies or "whiteness studies" degrees. In each case the message is the same: I am so wealthy that I can spend all my time doing things that don't economically benefit me at all and are entirely focused on elevating my morality in the dominant activism of our age. It's a sort of ritualistic destruction of your own ability to earn a living, to demonstrate you don't have to earn a living. Like Chinese foot binding.
- greglindahl 9y agoCollege is not necessarily a vocational school -- many people with "useless" degrees go on to become knowledge workers... using the skills that they learned and applied in their "useless" degree. That's an economic benefit from the "useless" degree. One example of this is all the physicists working as programmers. There are also a ton of examples of humanities students becoming lawyers, or product managers, or school teachers, or ...
- Banthum 9y agoOf course, some degrees are direct training, and some are more generally useful. But there's a spectrum. E.g. philosophy and "gender studies" are both considered generally useless. But I'd say that philosophy at least can be applied to various types of work, and the course doesn't make a student less useful as a productive human. With "gender studies" the student is actually becoming more useless by having his head filled with a bunch of moralisms, victimhood ideologies, and objectively false lies about the world. A naive highschooler is more useful in any workplace than a "gender studies" graduate. It's more useful to know nothing than to know things that aren't true, or be full of propagandized anger at various identity groups.