Economic Theories: Conspicuous Consumption and American Beauty

A detailed Summary of Economic Theories: Conspicuous Consumption and American Beauty

Thorstein Veblen, who wrote during the early years of the 20th century, used examples from Barbarian times to illustrate his economic theory, but his theory is still applicable and meaningful to life today. The Theory of the Leisure Class is as much a commentary on human nature and the demands of modern society as it is an economic treatise. According to his theory all human societies exhibit a need to honor a class of people who do no productive work. As a rule this class of people are men who are waited upon and served by women and servile classes of men. Their only real "work" is to consume food, clothing, housing, furniture, and whatever connotes luxury. Nowadays, this would include luxury cars, expensive and up-to-date computer equipment and electronic devices, and great homes with swimming pools, wine cellars, and Italian granite countertops in kitchens like those seen on HGTV.

The lower classes tend to emulate this behavior and consume goods in a conspicuous manner to show that they, too, are worthy. The consumption of goods is evidence of "pecuniary strength," that is financial success, and frequently people will buy things they cannot afford-even if it means doing without things they actually need-in order to impre

It is a well known fact that most Americans do not save any money. According to Veblen's theory, this is because a savings account, no matter how fat, will not advertise one's wealth. The whole point is to show that one is rich and successful and has expensive tastes. It follows that advertising one's wealth in a conspicuous manner must necessarily involve waste. There is no merit to be gained by simply consuming life's necessities-except by comparison perhaps, if one lived next door to someone who was destitute. Veblin takes considerable care to explain that waste does not mean an illegitimate expenditure of products. To him waste means an expenditure which does not serve human life or well-being on the whole. For example, a new Cadillac might serve the well-being of the individual who buys it, but it does not help society as a whole. Conversely, a city sanitation system, although much more expensive than a Cadillac, would not be wasteful because it would support the health and well-being of all the citizens in the area. According to Veblen any consumption that does not enhance human life as a whole is wasteful.

Using this as a criteria, one would have to say that fast food (McDonald's, Burger King, etc.) is waste since people do not need food they could prepare for themselves at home, the food itself is unhealthy, and growing the meat causes destruction of the rain forest which is the primary source of oxygen for all human beings to breathe. Applying Veblen's theory, eating in restaurants in gener

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