What is Meant by Conspicuous Consumption

It’s sometimes called ‘keeping up with the Joneses,’ or ‘living beyond one’s means,’ but, the vicarious consumption of goods and services in an effort to show off wealth – often wealth the consumer doesn’t actually possess – is one of the root causes of many of our economic ills.

ThorsteinVeblen in his book, The Theory of the Leisure Class, is defined as the ‘buying of unnecessary and expensive products and services as a way to show off wealth’.  According to Veblen, traditionally the only economic differentiation in the earlier phases of the consumer, or to use his term, predatory culture was between the superior class made up of able-bodied men and a base inferior class of working women.

The ideal of the time was that it was the prerogative of the men to consume what the women produced, and the consumption of the women was merely incidental to their work, and not directed to their own comfort. The unproductive consumption of the work of others was seen as honorable as a mark of prowess and a perquisite of human (read male) dignity.

The superior classes had certain goods reserved solely for their consumption throughout the earlier phases of economic development; and this reservation had the force of conventional law.

As economies developed, this custom of consuming vicariously leaked down into the middle classes, and in today’s world also infects those at or near the bottom of the economic ladder. This phenomenon can be seen in many societies during times of economic depression when the sale of leisure goods, such as alcoholic beverages actually increases.

Not all of this is due to the destitute seeking chemical release from the poverty; some is an effort to maintain status within their particular social group. It can be seen, for instance, when residents of low-income areas, while unable often to make rent payments or buy sufficient food to feed their families, will buy the most expensive cars.

Even though these vehicles are frequently repossessed because of the buyer’s inability to make payments, the practice refuses to die out. This practice is more prevalent in urban than rural areas, perhaps because of the close proximity in which people must live, increasing the ‘peer’ pressure that people feel to maintain displays of status.

Another example of conspicuous consumption that had dire economic consequences, and continues to negatively impact on the U.S. economy, was the tendency during the late 1980s through the early 2000s was the purchase of homes that were beyond the capacity of the buyers’ incomes. In addition to cars, jewelry, expensive clothes, and the like, a residence is a prominent and highly visible status symbol, and many Americans were incurring prohibitively expensive debt burdens in order to live in ‘McMansions’ in trendy neighborhoods to display their economic prowess and social standing.

That many couples had to work as much as three jobs and barely made enough to meet mortgage payments seemed irrelevant. This trend toward larger and more expensive houses began in the U.S. in the 1950s, with the average size of American houses doubling by 2000. This was accompanied by a trend toward larger, less gas-efficient cars.

The difficulty with conspicuous consumption is that it is psychologically-driven and few studies have focused on this aspect. Efforts to blame producers or advertisers will not solve the underlying problems until the psychological and social issues are appropriately addressed. It is clear, however, that this tendency is not a modern phenomenon, but has been with us from the dawn of Veblen’s predatory culture.