Conspicuous Consumption - History

History

In the 19th century, the term “conspicuous consumption” was introduced by the economist and sociologist Thorstein Veblen (1857–1929), in the book The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), to describe the behavioural characteristics of the nouveau riche (new rich) social class who emerged as a result of the accumulation of capital wealth during the Second Industrial Revolution (ca. 1860–1914). In that social and historical context, the term “conspicuous consumption” was narrowly applied to describe the men, women, and families of the upper class who applied their great wealth as a means of publicly manifesting their social power and prestige, be it real or perceived.

In the 20th century, the significant improvement of the standard of living of a society, and the consequent emergence of the middle class, broadly applied the term “conspicuous consumption” to the men, women, and households who possessed the discretionary income that allowed them to practice the patterns of economic consumption—of goods and services—which were motivated by the desire for prestige, the public display of social status, rather than by the intrinsic, practical utility of the goods and the services proper. In the 1920s, economists such as Paul Nystrom (1878–1969), proposed that changes in the style of life, made feasible by the economics of the industrial age, had induced to the mass of society a “philosophy of futility” that would increase the consumption of goods and services as a social fashion; an activity done for its own sake. In that context, “conspicuous consumption” is discussed either as a behavioural addiction or as a narcissistic behaviour, or both, which are psychologic conditions induced by consumerism—the desire for the immediate gratification of hedonic expectations.

In that time, the economist and the sociologist defined conspicuous consumption as the socio-economic behaviours of consumerism primarily practiced by rich people; yet the research of the finance professor Nikolai Roussanove, and the economists Kerwin Kofi Charles and Erik Hurst, indicated that conspicuous consumption is a complex of socio-economic behaviours very common to the poor social classes and economic groups, and common to the societies of countries with emerging economies. Among such people of the “poor” social classes, the displays of wealth psychologically combat the impression of poverty, often because he or she belongs to a social class or to an economic group whom society perceive as “poor”. In The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (1996) Thomas J. Stanley and William D. Danko reviewed the traditional definition of conspicuous consumption, wherein the examination of the style of life of rich Americans indicated that most tended to economic frugality and practiced a modest standard of living.

In the 21st century, emerged the term “conspicuous compassion”, describing a variant consumerist behaviour that is the practice of publicly donating great sums of money to charity, as a means of enhancing the social prestige of the donor man, woman, or family; thus buildings emblazoned with the donor’s name.