Veblen good

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pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent

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big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

Today, the condition of being around a lot of other people adds to metropolitan expense via congestion, and the cost of competition for scarce public and private resources (the parks are crowded, and the best shows sell out quickly). What could possibly make city life worth the expense? Maybe it’s all for show. It could be that cities are what economists call Veblen goods, after economist Thorstein Veblen. A Veblen good has an unusual property -- as its price rises, demand for it also rises. Why? Because it functions as a status symbol. Wealthy Americans could choose to pay high prices for city life because city life is like a Rolex watch or a $10,000 bottle of wine: it shows that you've got money.


pages: 256 words: 76,433

Overdressed: The Shockingly High Cost of Cheap Fashion by Elizabeth L. Cline

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big-box store, clean water, East Village, feminist movement, income inequality, informal economy, Maui Hawaii, McMansion, megacity, race to the bottom, Skype, special economic zone, trade liberalization, Triangle Shirtwaist Factory, upwardly mobile, Veblen good

Women’s Wear Daily also reported that cheap-fashion prices are not pulling down designer price tags but driving them up: Consumers are shopping at the high-end specifically to “max out their Visas.”21 They are using clothes as a type of competitive consumption. In economics, there is a principal known as “Veblen goods.” These are the products we desire more the higher their prices go because we hope this will show other people that we have wealth and status. Clothing is very sensitive to this effect since it deals directly with personal expression and ego. We see it as an extension of ourselves, and it is the most visible way we can strut our stuff.

., 129–30, 133 Trebay, Guy, 110 Triangle Shirtwaist Factory, 44, 142–43 Trovata, 109 Tucker, 114 Ullman, Myron, 95–96 Umbro, 40, 148, 181 Uniform Project, 191 unions, 38, 44, 48, 51, 140–44, 154, 155, 163 UNIQLO, 2, 33, 70 UNIS, 60 UNITE HERE, 48 Universal Studios, 40 Urban Outfitters, 13, 43, 60–61, 73, 204, 205 USA Today, 202 Usigan, Ysolt, 71 Valentino, 62, 63 Van Meter, Jonathan, 17, 19 Variety, 31 Varsity, 148 Veblen goods, 77 Versace, 6 Very Sweet Life, 187–88 Very Sweet Life, 190 VF, 181 Victoria’s Secret, 189 videos, YouTube, 12, 13–15, 122 Vietnam, 165, 180 vintage clothing, 133–34, 135, 201–2, 204 designs copied from, 112–13, 120 refashioning of, 134, 200–202, 206 Vogue, 17, 22, 30, 31, 34, 64, 65, 114, 171 Vogue.com, 113 von Furstenberg, Diane, 62, 110, 171 Wagner, Robert, 143 Wagner, Stacy, 158 Wall Street Journal, 43, 92, 93, 95 Walmart, 2, 12, 13, 15, 18, 23, 24, 26–27, 30, 31, 70, 95, 96, 100, 131, 144, 181 factories and, 144–48, 151, 159 Walton, Sam, 95 Wanamaker’s, 1 Ward, Andy, 36–38, 41, 43, 45, 52, 53, 142, 214 Warner Brothers, 148 Washington Monthly, 53, 148 Washington Post, 132, 185 well-spent.com, 60 What’s in a Dress?


pages: 279 words: 87,910

How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky

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banking crisis, basic income, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, creative destruction, David Ricardo: comparative advantage, death of newspapers, financial innovation, Francis Fukuyama: the end of history, full employment, happiness index / gross national happiness, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, lump of labour, market clearing, market fundamentalism, Paul Samuelson, profit motive, purchasing power parity, Ralph Waldo Emerson, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, Veblen good, wage slave, wealth creators, World Values Survey, zero-sum game

Snob and bandwagon goods are not of course mutually exclusive: many snob goods mutate into bandwagon goods, leading to their abandonment by true snobs. This perpetual circle is familiar from the worlds of art and fashion. Overlapping with both snob and bandwagon goods are “Veblen goods,” so called in honor of the great American theorist of conspicuous consumption, Thorstein Veblen. Veblen goods are desired insofar as they are expensive and known to be expensive; they function, in effect, as advertisements of wealth. In the still hierarchical world of business, whether one travels first, business or economy class signals one’s rank in the company.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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activist fund / activist shareholder / activist investor, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, God and Mammon, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, Plutocrats, plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

In a caustic but perceptive jibe, the Norwegian-born economist Thorstein Veblen, best known for his critique of conspicuous consumption, remarked that ‘beauty is commonly a gratification of our sense of costliness masquerading under the name of beauty’. Hence, the coinage in economics of the term ‘Veblen goods’, which refers to commodities of which people will buy more when the price goes up because this confers increased status, whereas higher prices more normally choke off demand. Or, in the language of the thought-provoking British economist Fred Hirsch, many works of art such as Old Masters are ‘positional’ goods.

P. 1 Times/Sotheby Art Indices 1 Timon of Athens (Shakespeare) 1 Titian 1 toads (see Madame Nui’s toad) Tocqueville, Alexis de 1 ‘too big/interconnected to fail’ syndrome 1 Toyoda, Sakichi 1 transmutation of base metal into gold 1 Trichet, Jean-Claude 1 trickledown theory 1, 2 Trollope, Anthony 1, 2, 3 tulip mania 1, 2, 3 Turner, Adair 1 two-tier capital structures 1 UBS 1 UK debt 1 entrepreneurs 1, 2 financial services 1 gold standard 1, 2 inequality 1, 2, 3 manufacturing 1, 2, 3, 4, 5 regulation 1, 2 speculation 1 taxation 1 Unto This Last (John Ruskin) 1 US 1 banks 1, 2, 3, 4, 5 Bretton Woods Conference 1 debt 1, 2, 3, 4 dependence on China 1, 2 financial services 1 gold standard 1 inequality 1, 2, 3 literature 1 manufacturing 1, 2, 3 regulation 1 robber barons 1 speculation 1, 2, 3 taxation 1, 2, 3, 4, 5 trade 1 usury laws 1, 2 Utopia (Thomas More) 1, 2 Vanderbilt, Cornelius 1 Vasari 1 Vayanos, Dimitri 1 Veblen goods 1 Venttsel, Elena 1 Vermeer, Jan 1 Vickers Commission (UK) 1 Vico, Gianbattista 1 Victoria, UK Queen 1 Vinik, Jeffrey 1 Volcker, Paul 1, 2, 3 Volcker rule 1 Voltaire 1, 2, 3, 4, 5 Wagner, Richard 1, 2, 3 Wall Street (film) 1 Wall Street Crash (see crash of 1929) war 1 Warhol, Andy 1, 2, 3, 4 Watt, James 1 Way We Live Now, The (Anthony Trollope) 1, 2 Wealth of Nations (Adam Smith) 1, 2, 3 Webb, Beatrice 1 Weber, Max 1 Wedgwood, Josiah 1 Weinstock, Arnold 1 Westinghouse, George 1 Wheatcroft, Geoffrey 1 Wheen, Francis 1 White, Harry Dexter 1 Whitney, Richard 1, 2, 3 Wilde, Oscar 1 Wilson, A.


pages: 164 words: 57,068

The Second Curve: Thoughts on Reinventing Society by Charles Handy

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Airbnb, basic income, Bernie Madoff, bitcoin, bonus culture, British Empire, call centre, Clayton Christensen, corporate governance, delayed gratification, Diane Coyle, Edward Snowden, falling living standards, future of work, G4S, greed is good, informal economy, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, Kodak vs Instagram, late capitalism, mass immigration, megacity, mittelstand, Occupy movement, payday loans, peer-to-peer lending, Plutocrats, plutocrats, Ponzi scheme, Ronald Coase, shareholder value, sharing economy, Skype, Steve Jobs, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Veblen good, Walter Mischel

I am ashamed now to think that I had no idea of how I was going to earn that money or how I wanted to live, other than driving around in an absurd car, but I was no different from some of the young people I come across today – money as the presumed answer to life. The trouble is that money remains the one thing of which, it seems, you can never have enough, as the escalating (and surely unnecessary) rewards of senior executives seem to prove. Even when you have met all your needs and wants there are always the Veblen goods, so called after Thorstein Veblen’s theory of comparative goods, those aspects of conspicuous expenditure that are effectively rationed, like the membership of elite clubs, the ownership of property in an exclusive zone, or being in the top ten of some league table of corporate pay. Money is also, for some, a scorecard, unrelated to anything it can buy except a place on the Forbes List of billionaires.


pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

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accounting loophole / creative accounting, bank run, banking crisis, banks create money, Bernie Madoff, bitcoin, blockchain, borderless world, Bretton Woods, BRICs, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computer age, conceptual framework, credit crunch, cross-subsidies, David Graeber, debt deflation, dematerialisation, disintermediation, eurozone crisis, fiat currency, financial exclusion, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, German hyperinflation, Goldman Sachs: Vampire Squid, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liberal capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, mobile money, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, negative equity, new economy, Nixon shock, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer, peer-to-peer lending, Ponzi scheme, post scarcity, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Satoshi Nakamoto, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Veblen good, Wave and Pay, Westphalian system, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

I am not giving general introductions to these figures but focusing specifically on what they had to say about (and how they used) notions of waste and general economy, and more narrowly, what they said about the nature of money in relation to these notions. By addressing money from the perspective of waste, I am inverting its more customary textbook treatment as a function of utility. This is a familiar theme in the study of consumption: luxury objects express the capacity of their owners to waste what they have, and the “Veblen good” is more coveted the higher its price goes. As Veblen describes it in The Theory of the Leisure Class (1899), the capacity to indulge in wasteful expenditure—and to make others use up their productive time catering to one’s luxurious tastes—is a key marker of distinction (Veblen 2009). Waste is a cultural symbol, in Veblen’s theory; indeed, one might refer to wasteful rather than conspicuous consumption (Varul 2006: 104–105).

See also conceptual utopia; realistic utopia; technical utopia; techno-utopia valorization, 73, 231n25, 242 valuation, 28–29, 40, 160, 215, 272, 295, 305, 302, 325, 326; and morality, 292; in Nietzsche, 137 value, 36; in Baudrillard, 189; in linguistics, 38–39; of money, 37, 41, 48; in Nietzsche, 137; versus price, 29; in Simmel, 27–29, 318, 325–26. See also nonpecuniary values valuns, 360 Vatican, 166 Veblen, Thorsten, 151; The Theory of the Leisure Class, 164 Veblen good, 164 Vedove Bianche (White Widows), 92 Velthius, Olav, 16–17, 293 Ven, 316 Vercellone, Carlo, 243 Vietnam War, 99, 298 violence, 47, 68; and debt, 91n, 100, 101; in de Sade, 169; and economics, 64; in the Eurozone, 261; and the financial crisis, 77n; generalized forms of, 225n16; and honor, 97; and mimesis, 43–45; and money, 43–46, 96, 250; and the sacred, 173; and the state, 96.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

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Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

“The substantial diamond gift can be made a more widely sought symbol of personal and family success—an expression of socio-economic achievement,” said an N. W. Ayer report from the 1950s. Today 84 percent of American brides get a diamond engagement ring, at an average cost of $3,100. In 2008 Armin Heinrich, a software developer in Germany, created the ultimate Veblen good: he designed an application for the iPhone called I Am Rich. It did nothing but flash a glowing red gem on the screen. Its point was its expense: $999. Maybe stung by criticism over its banality, Apple removed it the day after its release. But before it could pull it, six people had bought it to prove that, indeed, they were.