Theory of the Luxury Class
The world's richest people: What they're buying and why.
May 3, 2007— -- I am lying in a $8,000 bed trying to read "Theory of the Leisure Class," the book that coined the term "conspicuous consumption." As I read, I am waiting for one of those brilliant insights that journalists are supposed to have when they do things like contrast early 20th century socioeconomic theory with ultra-high-thread-count sheets.
But I can't concentrate on Thorstein Veblen, or his book. I am instead totally obsessed with thinking about this bed -- the Dux -- with its 2 miles of Swedish steel springs, and its lumbar support. All I can think is: "I want to own this bed."
The bed, to be sure, is very comfortable. But it's also a status symbol, the Donald Trump of beds, found mostly in exclusive hotels.
If you care about what people think of you and you care about sleeping, which is to say, if you are American and you are alive, then you can't help but want this bed.
And that, it occurs to me, is Veblen's point about conspicuous consumption, or the act of buying very expensive goods, whether they be $8,000 beds or $6,000 shower curtains or platinum encased cell phones. The wealthy buy these items so they can talk about them and people can see them using them and then talk about them, too.
When Veblen wrote in 1899, he was living in what would eventually be known as the gilded age. A new class of wealthy Americans had emerged, and they wanted people to know just how well they were doing.
The rich built lavish homes, filled them with luxury goods, staffed them with dozens of servants and then hung out and played sports.
Today, people are richer than ever. There are some 8.7 million people worldwide who have at least $1 million, and 984 of those are billionaires.
And the rich still want luxury items, they still want servants and they still want to enjoy their free time.
There may not be many "high net worth individuals," but they nevertheless spend a lot of money. The size of the luxury goods market is estimated at somewhere around $450 billion.
So, what are the super-rich conspicuously consuming these days? And, as Veblen asked more than a hundred years ago, why are they spending so much money?
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