According to Veblen’s theory, an item is considered luxurious if it’s expensive, of high quality, and exceeds practical use. There is an element of wastefulness involved in Veblen’s theory of conspicuous consumption. Necessities are not related to conspicuous consumption; an item labeled in this way must be superfluous to a person’s basic needs. Alternate name: Visible consumption The slang term “bougie,” derived from “bourgeois,” which refers to the upper and middle classes, relates to conspicuous consumption because it denotes expensive goods that exceed practical function and serve to set the owner apart from other members of their economic class. Another example of conspicuous consumption in pop culture is the 2013 Martin Scorsese biopic “The Wolf of Wall Street.” The film is a dramatic depiction of excess, with scenes ranging from grandiose mansion parties to drug use on yachts. Veblen goods, which are items for which demand grows as price increases, are associated with conspicuous consumption. High prices generate demand for these types of goods among the wealthiest consumers. Obtaining these types of goods at high prices is meant to impress other people.
How Conspicuous Consumption Works
Veblen’s “The Theory of the Leisure Class” speculates that a leisure class, or upper and middle classes, is rooted in capitalism. Veblen theorized that an economic hierarchy formed in developed societies where labor is delegated to the lower classes and leisure is held in high regard. Conspicuous consumption becomes a lifestyle of those who belong to the middle and upper classes. Veblen states that the importance of wealth is to impress others with it. According to the theory, people are motivated to purchase luxury goods for more than their intrinsic value. The main point is to make other people aware that they have the privilege of owning these goods. Veblen noted that pecuniary emulation, or the desire to equal or surpass another person’s financial status, drives conspicuous consumption. Conspicuous consumption is typically associated with wealthy people, but it also includes the middle and working classes. Between a global market for counterfeit goods and many people taking on debt to afford luxuries, conspicuous consumption is widespread in our society.
Criticism of Conspicuous Consumption
Veblen’s book is often seen as a classic critique of conspicuous consumption, but despite that, some economists have condemned the theory. Critics have said that because the theory only pertains to purchasers of luxury goods, it cannot be applied to all types of consumption as Veblen intended. In addition, the concept is based on the idea that primarily the upper class determines spending, which excludes the influence of consumers on the lower end of the economic spectrum. Other arguments state that the way status is conveyed has changed over time, and it is now more often considered elite not to display wealth conspicuously, or that lifestyle rather than social factors now drives spending, which varies from what Veblen theorized.
