Last year, The Economist ran a series of ads for Louis Vuitton handbags featuring Bono, Angelina Jolie, and Muhammad Ali. As I am certain with many dutiful subscribers of this newspaper—no, it’s not a magazine—well-thumbed copies eventually make their way to the lavatory for more casual reading toward the end of the week. This led to numerous less than cogent encounters spent staring at the back cover featuring these advertisements from the luxury goods maker to which the publisher of The Economist has sold their valuable readership.
Here’s Bono, head tilted proudly skyward, scanning the distant horizon for the amphitheater in which he is to perform tonight—or perhaps it’s the Four Seasons, or the office of his tax attorney? He carries a guitar case to remind you that he is a famous musician, the Cessna he and his wife piloted to the grassy airstrip a symbol that he will take any risk to meet his adoring public. His music is a gift to humanity, after, of course, channeling the proper charitable tax deductions through a firm in the Netherlands.
While Bono begins his journey in Africa, Angelina Jolie is saving the children of Cambodia. The sole occupant—besides the photographer, the lighting crew, security detail—of a rustic flat boat steering magically through the reeds en route post haste to the nearest humanitarian relief effort. Her hair is meticulously tousled and her feet bare, proof that Jolie cares deeply about the hardships of the long-suffering Cambodians. When looking at her on this boat in Cambodia I can almost forget all about those pictures of her shooting coke up her nose at her upper west side apartment.
Ali. Can the poor man even recognize his surroundings? Sadly he cannot help but try to encourage another generation that pugilism is a respectable enterprise for young black men.
In each of these ads, a Louis Vuitton bag sits prominently on stage and decidedly out of place. As I pondered how any educated or intelligent person could be swayed by these laughably staged appeals to celebrity worship to part with $1200 for an unpractical swathe of stained leather, I was reminded of the work of Thorstein Veblen who more than a century ago laid down exactly why brands like Louis Vuitton exist and why they attract so many customers, despite such utterly inane marketing campaigns.
Thorstein Veblen’s seminal critique of wealth, The Theory of the Leisure Class, was published in 1899 against the backdrop of the Gilded Age, an era so named for the immense wealth accumulated and flaunted by the paragons of the Industrial Revolution. This was a time when legal and political systems were completely dominated by the economic elites, before the crises of the early 20th Century called attention to populist and Progressive claims that would attempt to provide some voice to the working class. There was no social safety net—no welfare, Social Security, minimum wage, Medicaid, or Medicare—and regulation of industry was virtually non-existent. There were no labor unions, overtime pay, health or safety standards, paid holidays, sick days, retirement, or any of the basic rights and protections we have come today to take for granted. In 1899, unless you were an industrialist or otherwise from among a very tiny sliver of inherited aristocracy, you probably worked long hours in uncomfortable or dangerous conditions for subsistence wages until the day you died. If you were unlucky and lost your job, you were largely limited to a choice between crime and starvation.
The significance of Veblen’s work lies in his brilliant analysis of the social psychology of wealth acquisition and the ‘conspicuous consumption’ whereby the upper class distinguishes itself. He traces the origin of private property to the barbaric stage of human society in which trophies of conquest or hunting were used as visible displays of a man’s prowess in juxtaposition either to his enemies or to others of his own tribe. While industrial society has largely removed both the need and opportunity for collecting such trophies of conquest, we have retained the use of property as a means of measuring our prowess against our peers.
This is neither a conscious nor a deliberate process, but one that has evolved along with our civilization over thousands of years. It is difficult for us to observe but this is because we are used to thinking of our society as the rational product of our collective will, instead of an undirected haphazard random walk from one experimental stage of evolution to another. In much the same way as our bodies have evolved from earlier states, leaving behind vestigial parts that no longer serve their intended function, we are surrounded by culturally vestigial parts that are hallmarks of earlier forms of society but are no longer vital to our survival. The exhibition of private property as a display of superiority is one such leftover from our barbaric past—a ridiculous trait hearkening back to our ancestral ape selves.
Veblen astutely observed that ‘pecuniary emulation’ is always relative and therefore there is no escape from the increasing compulsion to acquire. Veblen acknowledges essentially, that “more is never enough”.
“But as fast as a person makes new acquisitions, and becomes accustomed to the resulting new standard of wealth, the new standard forthwith ceases to afford appreciably greater satisfaction than the earlier standard did. The tendency in any case is constantly to make the present pecuniary standard the point of departure for a fresh increase of wealth; and this in turn gives rise to a new standard of sufficiency and a new pecuniary classification of one’s self as compared with one’s neighbours.” – ch.2
No matter where you are on the relative scale of wealth, there is always someone above you—or rather more accurately, there is always the perception of someone above you, against which you must struggle to acquire more in order to compete. The owner of an M3 may feel a fleeting sense of superiority in a parking lot full of Camrys and Subaru Outbacks, but will always harbor some degree of inadequacy that they couldn’t have an M6 instead. Meanwhile, the M6 owner looks longingly at the neighbor’s AMG, and of course at the sight of a Ferrari both are ready to erupt in a child’s tantrum because they can’t have the pretty red toy.
This explains why rich people do not feel rich, and why, upon achieving a high standard of living, many will continue to push themselves to acquire ever more even if it means not having time to enjoy the standard of living they already have.
Reading Veblen’s account of the ‘conspicuous consumption’ of his era, it is remarkable how little has changed in the more than 100 years that have transpired between the Gilded Age and the one in which Bono, Angelina, and Ali make you want Louis Vuitton’s handbags.
In sixth grade one of the things we learned in our social studies class was how advertisers use various tricks to persuade you. One such trick was celebrity endorsement: products look more appealing when they are being used by famous people. Another trick was to be ‘aspirational’: images of others enjoying success or comfort make you aspire to be like them by purchasing the same products they use. It was considered important enough to teach this to 12 year olds in the 1980s and I assume that some version of this is also being taught in schools today. How can these tricks still work, if everyone knows about them? Veblen exposed the curious habits of the elite over a century ago, so why do we all still play this silly game? Do readers of The Economist actually purchase Louis Vuitton handbags? How can it be that people actually take this seriously?