‘The Sum of Small Things’ defines inconspicuous consumption by ultra-wealthy elites

The Sum of Small Things: A Theory of the Aspirational Class.

The title of this book — The Sum of Small Things: A Theory of the Aspirational Class — is not particularly enticing and it definitely does not reflect its riveting content. A more appropriate title might be, The New Elite and the Dwindling Middle-Class: The Widening Gap.
There was a time when the way you made your tea denoted your social status.
The butler in the famous British period drama “Upstairs, Downstairs” said, “Those of us downstairs put the milk in first, while those upstairs put the milk in last. ” Fine china (an expensive item which only the rich could afford) was able to withstand the heat of tea, whereas cheaper teacups would crack if hot tea were poured into them.
Whatever we do has a social meaning. Our behavior and the material goods that we buy reveal our socioeconomic position. We define ourselves through the way we consume or, in other words, by “conspicuous consumption,” (a term coined by economist Thorstein Veblen in the late 1800s) meaning the use of specific goods which indicate our social and economic position.
The Industrial Revolution reduced the cost of material goods and triggered the emergence of a middle-class which acquired property, cars, TVs, air conditioning units. Nowadays conspicuous consumption includes branded clothes, shoes and handbags. Several luxury brands such as Armani, Ralph Lauren and Marc Jacobs to name but a few, have even created lower priced collections to satisfy a growing demand among the masses.
“Globalization, mass marketing, mass production, and knockoffs have created a conspicuous consumption profile … The ‘stuff’ once associated with a wealthy lifestyle — cars, multiple handbags, closets full of clothes is seemingly accessible to mainstream society. At first blush, conspicuous consumption has been democratized,” writes Currid-Halkett.
However, despite the democratization of luxury goods, the 21st century has created a greater socioeconomic divide than ever before between the elite and the rest of society. The leisure class has now been replaced by a new elite based on meritocracy. Today’s new elite works longer hours and its social status is no longer defined by birthright and an abundance of leisure.
The emergence of this new elite coincides with the dwindling of the middle class in the US and other Western countries due to the breakup of the manufacturing economy.
Many European countries continue to relocate their factories to cheap labor countries.
This deindustrialization is caused by the saturation of the market, automation and globalization. Machines, robots and computers are taking jobs away from people.
The members of the new elite are people who are innovating, generating ideas thanks to their knowledge and not to any property they own, or their loyalty to a company.
Since many conspicuous goods are now accessible to the middle class, the rich differentiate themselves by purchasing limited editions of goods, boats and iconic sports cars.
If some manufacturers are having problems selling a $15,000 car, Ferraris priced at $275,000 are selling like hot cakes. You might think that a Cartier watch costing $10,000 is a lot of money but, if you are wealthy, that sum of money is equivalent to a mere $50.
A growing trend among the rich is to spend on inconspicuous consumption, which is not visible, such as hiring nannies and spending on their children’s education.
According to the author, if today’s rich elites are “far savvier and more sensible than the previous leisure class,” inconspicuous consumption remains one of their most consistent spending habits.
However, after the 2008 financial crisis consumption patterns have changed.
The top income groups have increased their inconspicuous consumption while the middle class has reduced its spending on inconspicuous consumption.
“Education is perhaps the biggest tangible example of the divide between the haves and the have-nots in America … The middle class and lower income groups are not deprioritizing education, but they simply cannot afford the rising tuition fees across all levels of education from preschool to high school to college,” remarks Currid-Halkett.
The top 1 percent are also spending far more than everyone else on the best health insurance and pensions. In the twenty-first century, elites are spending far more on what is essential such as education and health, the very things that set them apart.
Finally, the top 1 percent is ready to spend an average of $32,000 for a holiday while the middle class spends only $3,600. Travelers who pay $100,000 a year on trips have doubled or tripled.
The author mentions that National Geographic Expeditions, a company which designs round the world trips to far-away destinations like the Galapagos and Antarctica offered a 24-day trip for $77,000. The trip sold out.
If it is true that wealth does not automatically make you happy, studies reveal that if you are divorced and earn less than $1,000 a month, you are twice as likely to be sad as if you make more than $3,000 a month.
The new elites, whether in America or in Europe, have rejected the material means by which status has been historically revealed.
They aspire to a higher social and cultural platform.
The rich no longer buy mass market material goods.
Their cheap prices come at the expense of human and environmental costs such as unacceptable labor practices and dangerous chemicals, to name but a few.
Conspicuous production emphasizes where the product comes from and how it is made rather than what it looks like.
Hand-made and bespoke items are sought after and are experiencing a rebirth. Fountain pens, replaced in the 1950s by the ballpoint, are fashionable again.
Today’s elites pay attention to craftsmanship, tradition and history.
One of the greatest paradoxes is that all those cheap goods which the middle class can now afford, are being produced at the expense of middle class jobs.
Material goods are affordable thanks to cheaper labor in developing countries and thanks to computer technology.
Due to the recession, middle class jobs and wages in the US and in Europe have dried up and will never fully recover, even though the rich have just got richer.
The jobs that have left developed countries are benefiting a new class of paid worker from developing countries which the author refers to as the “global middle class.”
The rich are spending more on conspicuous consumption — education, health care, child care and college tuition — which truly impact the quality of life and upward mobility.
The middle class, however, can no longer afford such high expenses and is staying behind. Many studies suggest that future generations may never catch up with today’s elite.
According to the Brookings Institute, the impact of the middle class on the world economy is in its infancy. By 2021the number of Asian middle class consumers, an estimated 2 billion, will outnumber their Western counterparts.
In other words, 54 percent of the world’s middle class will come from Asia Pacific whereas North America’s and Europe’s global share will go from 18 percent to 36 percent to 10 percent and 22 percent respectively.
The crux of the matter is automation which threatens 140 million workers worldwide.
As computational power increases, the potential for automation to replace humans will expand; this creates a greater inequality leading to stagnating demand for goods and rising unemployment. Policy makers must respond adequately to these technological advances by taxing and redistributing wealth and income.
If not, the result will be a deepening of the current trend: An increasing divide between a global ultra-wealthy elite and a growing proletariat.
As the middle classes are losing their dreams, we are witnessing a surge of populist movements which are difficult to control.
Youngsters can no longer expect the same level of affluence as their parents. They hold the key to their destiny and have an essential role to play in this new world in the making.
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