tl;dr Why do people waste money on fancy stuff that doesn't deliver any functional advantage? To advertise their wealth and power to others for mutual future advantage.
TL;DR - if you need to get a meeting with someone, get a Veblen good that the meeting person is into
A friend gave me a fake Rolex once. He said it was exceptionally good; he had the exact same model that was real and the only difference he could see was that there was an o-ring on the winder of the real Rolex, and none on the fake.
I wore it to a trade show one time, and I was honestly shocked by the positive reception I got as a human -- from every other guy who was wearing a watch!. Usually these were the guys of more importance; buyers and sellers at the executive level, or the CEOs themselves. I hadn't worn a watch since the day my phone could tell time (am old, phones in the 90s did not tell time), so I also hadn't thought about watches in years as a consequence.
I can tell you that the cost of a Rolex is well worth it, from the particular point of view of 'access' to the guys with watches and hey let's talk about them . The watch club. The $40 fake I had was good enough, because who is going to unwind someone else's winder at a social gathering? Similarly other Veblen goods like a Lamborghini (rent one!) that a guy talked about as a conversation piece on a Reddit AMA a day or two ago. Whatever someone is deeply interested in, they will glom onto you if you show anything like authentic interest. If you want my attention, wear a MotoGP shirt or something from VR46.
The fate of the watch? the strap broke and the watch sat in a drawer for a while. My friend offered to fix it, so I gave it back to him about 5 years ago and haven't seen it since! LOL . I haven't needed it either, so I don't care. My phone tells time :) He has promised to return it, but I think he uses it as a spare. His real one stays in the safe, 100% of the time.
The key is to own both, so you know the difference. Then you wear the fake, and use the fakeness to tell a story, or start a conversation, perhaps with someone who also knows Rolexes, and now you have a shared interest.
The scenario I'm imagining is that a Rolex fan spots the fake, starts in on Sherlock'ing the matter, then you can add some of the lesser-known differences yourself.
Depends on your perspective. The real Rolex may be laughably overpriced by comparison to the knockoff Rolex which gets you the same benefits. It can still be underpriced compared to the benefits.
Ignoring the networking benefits, I've always found Rolex's message of "we charge more because we're _lower_ quality" pretty uncompelling. They are the Vertu of the 20th century.
A Rolex at least holds it's value well compared to other jewelry. If you buy a vintage Rolex and take care of it, you can pretty much sell it at any time and get your money back or maybe even make a small profit.
Suppose you are able to distinguish fake and real watches - then noticing someone wearing a fake one (without revealing your knowledge) acts as a defense against the Veblen good.. and I suppose for some levels of wealth, that information is good for figuring out someone else's intentions?
From an engineering perspective only (removing social/psychological attitudes from your mind) this is an interesting comment. Honda Company for years has output some of the best engineering in the automotive world, while Rolex produces nothing compelling from an engineering perspective.
The Honda S2000 had the most impressive 4cyl engine ever produced (and easily one of the best--impressive, reliable, fun--consumer engines ever produced) ... available in a reasonably priced roadster. There is a popular engineer/gear head Youtuber, Engineering Explained, that gawks over his.
But Honda and Rolex are different animals.
Personally I would rather not network with someone who values my character on the basis of wearing a Rolex, especially not in software dev. We're supposed to be savvy intellects, not ostentatious egos.
Certainly nowhere on the scale or awe of what the large automakers like Toyota or Honda have done, but impressive nonetheless (to a layman like me, at least)
I also think that is impressive, but it is about manufacturing and build quality. I'm talking about engineering design. A Honda has a lot of original and impressive engineering work in it. A lot of very smart people worked very hard to produce that. It's not the same with a Rolex. At HN we are tech savvy so I think we should appreciate that.
That's a pretentious insult without any substance.
At least the Honda product has some compelling, original engineering know-how; the Rolex does not, and that's all I ever said. What you're saying is unsubstantiated troll-bait and insulting to me, and a lot of people. Good on ya' for that one.
Edit: you edited your own comment... To still another unsubstantiated yet pretentious and condescending comment.
I didn't see the original but I did not get the impression that the poster's aim was to insult you.
You mentioned being software development, and as a skilled craftsperson in that field naturally you prize function over display. But two professional investors might eye each others' Rolexes to to signal both a sufficiently high level of disposable income that they can afford not to care about purely utilitarian factors, and as a sign of willingness to comply with an unwritten social norm rather than insisting on the superiority of their own taste/judgment in every circumstance.
What's ostentatious to the outsider may be an expression of humility to the insider: 'I'm willing to pay the price for this entry ticket on my wrist, but did not come here this evening to try to one-up everyone else.' At the opposite end of the social scale, you might wear a black leather jacket to fit in at the local punk club, but if your leather jacket was of too obviously high quality the other punks would doubtless consider you a wanker.
Please consider the possibility that you are undervaluing the social engineering function of the expensive watch by focusing on the technical engineering criteria.
Sure, I think Rolex is a product of very capable social engineering, which is why it can command such a high price while knock offs that cannot be easily identified as such sell for a fraction.
Also, the above poster's assertion this is proce discrimination is plainly wrong and uninformed. This has nothing to do with price discrimination.
Yes, but that is a normal economic utility rather than the type that attaches to a Veblen good.
I had a roommate years ago who made a living selling knockoffs of expensive handbags, but who would occasionally get busted and have his merchandise confiscated. (I personally think it should be legal to sell fakes but that's another story.) Anyway he switched to buy non-branded handbags, of really excellent quality, arguably as good or better than the fashionable ones. His business went well, as far as I know, but he had to sell more units to overcome the branding 'deficiency'.
To craftsmanship, yes. To goods made by that craftsperson? Aren't they only ever a proxy for human skill and achievement? (beyond some basic level of usefulness)
A skilled stonemason these days might find him or herself doing quite a lot of work for the wealthy, creating buildings that have traditional-style features but are not good or authentic architecture. That doesn't demean the craftsmanship involved (thankfully), and keeps the skills alive, but the end product is more or less waste.
It's fascinating to me to see articles about art aficionados using advanced means (carbon-dating, etc.) to pick out visually indistinguishable fakes. If one truly loves art, I should think that looking as good as a Rembrandt would be more important than who actually held the brush.
totally different pictures though - if it's a print or even a copy painted in the last couple of decades the light will be hitting it all wrong. oil paintings are interesting in how they settle overtime and cure.
A Veblen good, by definition, doesn't have additional value due to real craftsmanship or any other tangible characteristic. It gains value because of it's high price.
8x the price but the Saddleback likely has quality on par with, if not exceeding, the Louis. Sure, the Louis is probably very well made, but that has nothing to do with the price.
Back in the 90s in Russia (when this sort of thing was very much in vogue among the newly minted organized criminal / mobster class), there was a joke that went like this:
- Hey man, look what a nice new tie I've got! $1500!
- Dude, you're lame. They sell the same for $5k in the shop down the street.
There are no advantages to anything aside from functional ones? You've posed & answered your own question; why not let others answer for themselves? They may have reasons entirely unconsidered by you.
Veblen uses the word "Barbarian" in a way I have not seen before. For example he mentions European and Japanese Feudal societies as "higher Barbarian cultures", and others as "Lower Barbarian". The common use of "Barbarian" I have seen are entirely derogatory, and not something that would have been used in a serious work like this. Anyone that know what its meaning is in this context?
It's the usage that originated with Lewis H. Morgan. Engels used it in "The Origin of the Family, Private Property and the State", which Wikipedia has a good summary of:
> Barbarism – the period during which man learns to breed domestic animals and to practice agriculture, and acquires methods of increasing the supply of natural products by human activity.
For anyone wondering whether this work is worth reading, I must recommend The Origin of the Family, along with the other works of Marx and Engels. Engels has a wonderfully written The Principles of Communism which was the precursor to the Manifesto. They offer great insights into society.
Wild guess: people who aren't technicians aka engineers and scientists.
> It is the purpose of this memorandum to show, in an objective way, that under existing circumstances there need be no fear, and no hope, of an eventual overturn in America, such as would unsettle the established order and unseat the Vested Interests that now control the country's industrial system. In an earlier paper (The Dial, October 4) it has been argued that no effectual move in the direction of such an overturn can be made except on the initiative and under the direction of the country's technicians, taking action in common and on a concerted plan."
The original meaning of "barbarian" was akin to "not Roman" or "foreigner" (more precisely, someone not belonging to any of the classic civilizations).
Akin to "villanus" (someone living in a village), it took a derogatory tone later, as someone "uncivilized", but that was not part of its literal meaning.
> A distinction is still habitually made between industrial and non-industrial occupations; and this modern distinction is a transmuted form of the barbarian distinction between exploit and drudgery. Such employments as warfare, politics, public worship, and public merrymaking, are felt, in the popular apprehension, to differ intrinsically from the labour that has to do with elaborating the material means of life.
At other points, he adds academics and capitalists to the exploit category.
Social signalling is valuable. Signals that are expensive can be trusted over signals that are cheap. Proof of work has existed before hashcash, bitcoin, and is more than just a good solution to the byzantine generals problem.
Sometimes I wonder if things like fashions, art, music, etc., could get us out of an economy that depends so much on carbon emission. I was once at a Mary Kay convention (as a hired musician), and a few of the people were trying to sell the band members on joining the business.
I asked them if you can get a pink Prius for selling enough stuff. The answer is yes.
I suggested that cosmetics were the ultimate "green" product, because you could sell something with virtually no material content for an arbitrary price, and that Mary Kay should position itself that way. Could we support an entire economy, selling luxury goods to one another, with minimal ecological cost?
>Could we support an entire economy, selling luxury goods to one another, with minimal ecological cost?
Or even skip the "selling to one another step" and not make anything in the first place? Because there's no value made in a closed system where one is "selling luxury goods to one another" anyway.
So you're proposing that we move to a totally shallow economy which provides little in the way of useful service, other than what is essentially wealth signaling. Meanwhile our consumption remains the same and our carbon emissions are simply offloaded onto other nations.
What problem does this solve?
Additionally, how would you structure an entire economy around solely exchanging goods with no material value?
I think the idea is to replace more-wasteful wealth signaling with less-wasteful. I don't think this is meant to be a part of the economy which everyone partakes of - it's for people who would instead buy yachts and jets.
It seems possible to make private art more cool than private jets, at least in some circles. But I suspect that the overall effect on resource consumption would be smaller than OP thinks.
"So you're proposing that we move to a totally shallow economy which provides little in the way of useful service, other than what is essentially wealth signaling."
That is pretty much what we have now, basic needs can be met very cheaply in an industrialised society.
OK, let me be clearer then. There is a significant portion of people for whom there is no housing available that does not constitute half of their income.
I'm reminded of a Father John Misty song which goes:
Try not to think so much about
The truly staggering amount of oil that it takes to make a record
All the shipping, the vinyl, the cellophane lining, the high gloss
The tape and the gear
Try not to become too consumed
With what's a criminal volume of oil that it takes to paint a portrait
The acrylic, the varnish, aluminum tubes filled with latex
The solvents and dye
Lets just call this what it is
The jealous side of mankind's death wish
When it's my time to go
Gonna leave behind things that won't decompose
Such a world would presumably last for about a week before everyone starved to death. Where does the electricity necessary to run the Internet come from here?
I often wonder the same. With current advances in technology both in mass-media and automation, many elements of consumerism beyond basic needs could be made virtual.
With near-full automation, human repetitive labor tends to be value-less; however, human attention becomes a scarce resource, given all the cultural offers competing for them.
The most valuable resources would be scarce raw materials and machinery (concentrated in the hands of wealthy owners), top notch creativity (a natural talent, unevenly distributed), and attention from the public (everyone gets the same amount of it; finding ways to attract and concentrate it has proven to be extremely valuable, as Google taught us). I envision that you could create an attention economy from those elements.
Your definition of cosmetics has something to do with culture. When people don't have to fight for survival, they start creating complex symbols and behaviours around the theme of society. They tell stories, play games. The issue here is that culture is more and more mediated by technologies that are firstly aimed at consumption.
Is the implication here that face-painting, hair styling, etc. are unknown in cultures where people have to "fight for survival"? Because I find that hard to accept.
Unless we all stop needing to eat, have lodging, or go anywhere, probably not. In fact one might argue luxury goods are the opposite of green since, by definition, they are not necessary.
It's an amusing read, but he freely admits that he doesn't get Veblen and that is correct:
> Do I prefer terrapin à la Maryland to fried liver because plow-hands must put up with the liver—or because the terrapin is intrinsically a more charming dose?
This misses out Veblen's central argument in "The Theory". The terrapin is not intrinsically a more charming dose; in fact, many "uncultured" people would instinctively recoil at eating turtles. Same for other luxuries like lobster (a century ago, lobster was only fit for servants, and then no more than twice a week [1]). Ironically, fried fois gras is probably nowadays a more elevated dish than terrapin.
[1] https://en.wikipedia.org/wiki/Veblen_good