Conspicuous Consumption, What Is It Good For?

So you agree with my Kenesian-style approach? Huh. Didn't expect that. Well alrighty then.

Anyone else want to argue that conpicuous consumption is inherently bad?

No, I was saying that the post in question was clarifying my own position, not responding to your Keynesian approach. I already said what I thought about that, but I'll clarify it one more time.

The Keynesian approach is based on the assumption that demand is the limiting factor of production. I do not agree with this. I think that the limiting factors are land, labor, and capital. Land is the one that's most frequently problematic for a couple of reasons. Unemployment happens when labor is cut off from land and capital.

Conspicuous consumption is a neutral act. What you're spending is *

the produce of your own labor, so you're taking from the system no more than you contributed through your labor, so it's not a bad thing. However, you're not creating production. You're simply causing some of the land, labor, and capital to produce luxury goods instead of something else. Whichever one was the limiting factor is still limited, you haven't changed it by applying it to a new purpose.

Wealth is good stuff, its major purpose is to have fun. Though, consuming exorbitantly just to look cool is pretty stupid. Also, economic inequality is bad and stuff.

I vowed, and so did you: Beyond this wall- we would make it through.

Yeah, that doesn't fly in the sort of economy we have nowdays. Spending has a multiplier effect, (nearly) any spending, economic growth, and the wealthy sitting on their money retards economic growth immensely.

Conspicuous consumption - it's good because it allows you to engage in dick-waving without being put on a sexual offender list.

And what's special about the economy we have nowadays? What have I said that doesn't fundamentally apply?

Because, to a large degree, wealth isn't earned through production of meaningful goods. The people who are most likely to engage in conspicuous consumption are the ones most likely to have "earned" wealth through trading stocks, interest on bank accounts, futures, or other such "non-productive things." That sort of wealth earning tends to mean the wealth is moving upward, and accumulating, rather than being spent. In addition, that sort of spending and trading tends to have less economic benefits for the producers.

There's two ways you can look at that: either they were contributing to production through capital, or they were stealing production through fraud. Either way, it doesn't change the effect of spending the money they have.

Actually, the Georgist theory I've been quoting to the best of my understanding has a specific explanation for why wealth tends to get concentrated in the hands of a few. But that may be another topic.

edited 26th Nov '12 8:14:04 PM by Topazan