The world was introduced to conspicuous consumption in 1899 when Thorstein Veblen wrote the book The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions. Veblen explained that some people express their prestige and social status by spending money and acquiring luxury goods. At that time, before the middle class had fully emerged, only a handful of people were able to indulge in conspicuous spending, which is what made luxuries so prestigious. Over the last century, however, attitudes towards conspicuous spending, as well as the spending habits, themselves, have changed. More and more people have access to luxury goods, which has made conspicuous consumption generally more accessible, and therefore less desirable in illustrating social prestige.
Since Veblen’s time at the turn of the (last) century, conspicuous consumption has evolved. No longer does simply owning a car indicate wealth. Even a fairly nice car isn’t too difficult to come by. In order to illustrate a high social status, we must go to further lengths. Instead of driving a nice car, we must be driven in an even nicer one. A nice, clean home doesn’t indicate wealth, but in-home help shows off prestige by illustrating that we are too busy building said wealth to clean our house. What I am getting at is that luxury goods and service are much more accessible today than they ever have been in the past. Thus, simply owning basic luxuries is no longer an indication of a high social status.
So why are luxury goods so accessible? Well, one emerging contributor is collaborative consumption. The sharing economy gives us access to things we never need to personally own. For example, companies like FreshNeck, TieSociety, Rent the Runway, and Bag Borrow or Steal give just about any person the opportunity to look like a high powered executive without the prohibitive expenditure of a $225 Hermes tie or $15,000 Birkin bag. We have the option to simply rent designer ties and handbags temporarily in order to look fashionably relevant.
Interestingly, despite the increased accessibility of luxury goods, there seems to be a new stigma surrounding them. At the turn of the 20th century – during Veblen’s time – conspicuous spending was envied. Those who could afford a car and jewelry were seen as high class. Those who couldn’t afford them longed for the comfort and convenience that was available to the wealthy class. Today, showing off your wealth is actually considered classless, or “gauche” or “nouveau riche.” In other words, a person today with an excess of luxury goods may, in fact, be called “tacky.” The resulting shame surrounding luxury goods has begotten a more modest approach in the illustration of our spending habits.
In fact, those of the highest class can be seen exemplifying the opposite end of the spectrum. Think Larry David with his $800M+ Seinfeld dollars cruising around LA in a Prius. And tech companies with the brightest of young minds are known for casual work environments. They’re saying “Look, we are smart, we don’t need a Gucci suit to prove it.” Most importantly, extraordinarily wealthy people like Bill Gates and Warren Buffett – who are two of the richest people in the world – have one important thing in common. That thing is modesty. Buffett lives in the same home in Nebraska he bought in 1958 and Gates has committed effectively his entire fortune to fighting disease and malnutrition in Africa through the Bill and Melinda Gates Foundation.
Sometimes our luxuries are not a sign of prestige. Instead, it looks like we are trying too hard. A designer tie might make you look professional at the big meeting. But, afterward, when you meet your buddies for lunch, that tie might give the opposite impression. With the introduction of collaborative consumption, modesty and conspicuous consumption do not need to be mutually exclusive. We can enjoy luxuries without overspending. We can have nice clothing without appearing tacky. We can even be driven in a nice car without “showing off” because these luxuries are now accessible to anyone – not just the elite.
Because of collaborative consumption business, we can use designer apparel to appear professional at work but explain to friends and family that we just rented it for a small cost. Businesses that are part of the sharing economy give us the opportunity to justify our luxuries. When we point out the accessibility of our choice in consumption, we are exhibiting that our consumption is not conspicuous. In fact, it was a practical choice.
A great example of practical consumption that still allows luxury is Uber. For only a slightly higher fee than a taxi, your town car will arrive within minutes, a driver will get out to open the door for you, and then he’ll even give you water and play whatever music you want. If being driven around in a town car means spending hundreds of dollars it seems unnecessary, even obnoxious. But, what if I told you that you could have the exact same thing for basically the same price as a cab? That suddenly makes the choice much more practical, and a lot less conspicuous.
In the end, most of us still enjoy luxuries. We enjoy a professional Uber driver over an angry cabbie who wears ear buds the entire ride. A decadent meal beats the drive through menu, but we don’t make a show of surf and turf every night. The sharing economy allows us to enjoy our luxuries without showing off or appearing gauche. We are able to indulge and reasonably justify it because it is no longer a great expenditure and the value compared to the marginal cost is obvious.
Gint Rudis is an entrepreneur and co-founder of Chicago-based Spare to Sharewww.sparetoshare.com a collaborative consumption platform that provides for sharing, renting, and selling of items and other goods with closed, known networks. Prior to entrepreneuring, Gint worked in finance and management consulting. Gint holds a BS in engineering from Vanderbilt University and regularly regrets having graduated in 4 years.
Lauren Rabin is a writer for Chicago-based Spare to Share www.sparetoshare.com a collaborative consumption platform that provides for sharing, renting, and selling of items and other goods with closed, known networks. Lauren recently celebrated the one year anniversary of her graduation from Colorado State University with a BS in psychology but regularly wishes she majored in computer science. When she isn't regretting her education choices, Lauren works as a social media manager for an upcoming documentary called We Exist.