Month: September 2015

Financial crisis: consumed conspicuously? (2nd)

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This is a re-post of a blog entry I wrote for my LinkedIn profile a few weeks ago.

In the five years between 2001 and 2006 Citigroup ran a US campaign with the lively name Live Richly in order to sell equity loans. I remember seeing similar campaigns in Germany but in regard to this particular US version I had not been aware of it, until I started to follow the work by Mark Blyth on austerity.

He quite frankly noticed that this add is not asking the consumer to be/become rich but to live richly, a slight semantic difference with rather huge implications. At the same time, beginning in 2003, the US government, with the support of now famous financial institutions Fanny Mae and Freddie Mac, adopted the American Dream Downpayment Act that enabled low-income families to purchase their own home – all in the name of the American dream.

That, in some way, reminded me of the beautiful and humorous writings of American economist Thorstein Veblen, son of Norwegian immigrants and famous for developing American institutionalism that provided a theoretical substitute to the European, continental writings of Marx. In his 1899 humorous treatise The Theory of The Leisure Class Veblen develops a social critique of the, what he calls, ‘conspicuous consumption’ of the leisure class, those gentlemen, landlords and business men who, in Marx vocabulary, are the capitalists. For Veblen conspicuous consumption has no other purpose than the demarcation “between an honourable superior class” and the inferior working and servant classes, while it, at the same time, communicates the ceremonial necessities and the “norms of reputability” one needs to adhere to in order to enter the realm of the grand social class. As an early example, Veblen refers to “the use of intoxicating beverages and narcotics” for the purpose of “ceremonial differentiation”, and if they “are costly, they are felt to be noble and honorific”. Certainly a point of view I, myself, hold very dear. At the end, however, conspicuous consumption has no purpose to Veblen other than to show off one’s social status.

Fast forward roughly 110 years later, we, I dare to say, face a similar situation. Today we might rather speak of lifestyles than social classes but the story remains somewhat the same. Living richly is nothing more than the invitation to consume conspicuously in order to join the Haves and to leave the Have Nots behind. A home, car or an iPad today are signs of wealth and status like the walking stick or the watch in the pocket was in the times of Veblen. Back then they were signs of occupation, the owner was in no position to use his hands for labour, today we showcase financial independence. That, of course, causes a problem if the belief prevails that everybody can cross the borders into the leisure class, even if they fail to have the means to sustain such a lifestyle. What we end with is a pseudo-leisure class that itself is divided again into classes; a prime and a sub-prime class, at least.

Veblen, then, might also tell why the Marxists are still waiting for the proletariat’s revolution against their masters. The conspicuous consumption might be so powerful and habitual that the proletariat rather wants to become part of the masters than revolt against it. Veblen certainly reminds us to look for the deeper situated habits of thoughts in order to identify the root-causes of socio-economic problems. In that sense, it feels like that Irvine Welsh’s character Bruce Robertson, misanthropic inspector in the crime novel Filth, who makes a comment showcasing most sarcastically but somewhat appropriately this intentions, when he admits his motivation to join the force was the prospect of becoming part of police brutality and not to fight it.