Yves here. To underscore the key Thorstein Veblen observation, that the well-off signal social status via conspicuous consumption, as in show for its own sake, it is also very well substantiated that more money does not make people happier, once a certain level has been achieved, more or less enough to have a decent lifestyle and a savings buffer. That is admittedly now beyond the reach of most Americans.
I was friendly with a sociology PhD that Goldman has put in a very senior role in what they pretentiously called Human Capital Management to help with organizational design (Goldman had long been extremely skilled at this, particularly in figuring out how to run the place so that politics were limited to the Management Committee and everyone else was kept focused on making money for the firm and not trying to get advantage over each other). He was allowed to do lots of interesting and potentially important studies as part of his job.
The partner asked him to study if more wealth was more satisfying. They expected the answer to be yes. They were horrified when his investigation confirmed the well-established finding that it didn’t. They insisted that he keep that to himself.
A simpler version of this insight, recounted by Morgan Housel in The Psychology of Money:
At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have … enough.”
By Richard Murphy, Emeritus Professor of Accounting Practice at Sheffield University Management School and a director of Tax Research LLP. Originally published at Funding the Future
Consumption as Social Competition
Veblen argued that consumption often operates as a form of social signalling. Visible goods, such as houses, clothing, cars, and leisure activities, all communicate position within a hierarchy. Their value lies partly in the fact that others cannot easily afford them.
This creates a dynamic of emulation. Lower social groups imitate the consumption patterns of those above them, while the wealthy constantly seek new forms of distinction. The result is an endless upward spiral of consumption that has little to do with real need.
Prosperity, in this sense, becomes a race without a finish line.
Conspicuous Waste
Veblen observed that the leisure class often displays status not just through expensive goods but through waste itself. Time spent in conspicuous leisure, goods that are impractical but costly, and activities that demonstrate freedom from productive work all function as markers of superiority.
This behaviour is not accidental. Waste signals that one possesses resources beyond what is necessary. Ironically, the more inefficient or extravagant the activity, the stronger the signal.
In Veblen’s analysis, capitalism produces an economy where waste becomes socially valuable.
The Cultural Spread of Status Consumption
Although Veblen wrote about a small elite, the logic he identified has spread across entire societies. Advertising, branding and consumer culture actively cultivate status competition. Goods are designed not only to function but to signal identity.
As incomes rise, consumption expands, but much of this expansion reflects positional competition rather than improved well-being. What once marked the elite becomes normalised, and new forms of status display emerge.
The economy grows, but the underlying motivations remain comparative rather than substantive.
Growth Without Satisfaction
Veblen’s analysis helps explain a paradox of modern societies: rising consumption does not necessarily produce rising contentment. When consumption is driven by status comparison, satisfaction is temporary. The benchmark keeps moving.
This dynamic encourages perpetual economic expansion. New goods, fashions and technologies continually reset the hierarchy of status. The result is an economy organised around stimulating demand rather than meeting stable human needs.
From Veblen’s perspective, the system is not merely inefficient. It is structurally restless.
Waste and the Environment
Although Veblen did not write in the age of climate change, his insights resonate strongly today. Status-driven consumption encourages overproduction, rapid obsolescence and the extraction of resources far beyond what is necessary for human wellbeing.
Environmental degradation therefore becomes intertwined with social competition. Individuals consume more not because they need more, but because they must keep up.
What appears as prosperity may in fact be accelerating ecological exhaustion.
What Answering the Thorstein Veblen Question Would Require
Taking Veblen’s analysis seriously would require questioning the assumption that more consumption automatically improves well-being. At minimum, it would involve:
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Distinguishing between need-based consumption and status competition.
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Reducing inequality, which intensifies positional consumption pressures.
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Reframing prosperity around wellbeing rather than material throughput.
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Designing economic policy that discourages wasteful status races.
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Promoting social recognition through contribution, creativity and care rather than material display.
Such changes would not suppress human aspiration. They would redirect it.
Inference
The Thorstein Veblen Question reveals that economic growth can mask profound inefficiency. When consumption is driven by status competition, societies may devote vast resources to goods that do little to improve human well-being. The resulting system generates constant expansion, environmental strain and social anxiety, all in pursuit of relative advantage.
Veblen’s critique, therefore, challenges one of the central assumptions of modern economics: that rising consumption is always a sign of progress.
To answer his question is to recognise that an economy organised around status rivalry cannot deliver lasting prosperity, because its defining feature is perpetual dissatisfaction.
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Some friends just came back from Greece and recounted that they had gone to a pretty small town and wound up in the middle of a town-wide celebration where everyone was singing, dancing and eating and they were warmly welcomed to join in. I’ve had similar experiences myself – everybody brings a little to share with others and the whole town partakes.
What is more enjoyable – that joyful, communal atmosphere where everyone shares some basic food and creates long lasting memories (no charge for those!), or sitting at home eating filet mignon every day? I’d choose option 1 myself, but I also would not classify myself as a sociopath.
Side note – I did pick up Veblen’s Theory of the Leisure Class a few years ago and while he does have a very valid point to make, he sure does take a long time making it. Yves’ intro sums the whole book up quite nicely if you’d like to avoid a fairly long and extremely dry read.
I might add that that joyful, communal atmosphere is also when the community may find out who amongst them may be hurting, in need of help in many ways. That may also be returned to ourselves if those unfortunate situations arise in our own lives.
The path this nation is on, becoming the United States of You’re On Your Own, should encourage all of us to build communities.
I too was disappointed. I was hoping for tales of heroic extravagance such as the Rothschild’s zebra-propelled coach or Burgundian minstrels appearing from beneath pie crusts. ‘Tis the business of the wealthy man to employ the artisan.
There is a story, seemingly unrelated, about burning stuff as a signalling device: the story of Scaevola, a Roman official who deliberately burned his hand by thrusting it into brazier to show his captirs that no amount of torture would get any information out of him because he can tolerate such pain. There is a large body of game theoretic literature anout “burning money” (they generally invoke this story) that make much the same point: people “burn” money publicly to signal that money doesn’t mean much to them so the other side should accede to their demands rather than try to buy them off.
I always wondered if Veblen’s idea of conspicuous consumption is a variation of this: signal that you have so much money, or, at least, even if you didn’t, that more money doesn’t mean anything to them (if so, not surprising that more money does not make people who engage in conspicuous consumption happy.) To get their cooperation, you need to pay them in a different currency, like surrendering to Rome or something. What exactly this “different currency,” of course, would vary by circumstance, making it difficult to generalize.
More money or more stuff may not equate with greater happiness and satisfaction.
But is a pursuit of status through stuff the real driver of capitalism’s constant and urgent urge to expand? Or is the real driver the fact that investors don’t just want their money back; they want their money back and then some?
Status display by men is a part of sexual selection, and women marry most enthusiastically for status (or rather not marry at all, apparently). What can modernity do?
1. Women engage in status competition as least as much as men do
2. Married men and women engage in status competition
1. Status means a lot for women, evidently. It is even feasible that men would be pretty relaxed about the competition without sex pressure.
2. Within the couples, you mean? If the wife is “winning”, divorce chances get higher statistically. The husband cannot afford to loose, in a sense.
No, married men compete with other men. See cars, suits, watches, ties, where their kids go to college…
Ditto women.
You can call it “status” but it usually means access to decent schools, health insurance, reliable transportation, decent housing with some savings. As noted above, this kind of thing is beyond the means so the so-called middle classes now. You pretty much have to be upper-middle to have any shot at comfortable bourgeois.
Wow, are you a bigot. Lower income people also compete for status even if they are means constrained.
You make an important point, there certainly is status competition in low income. However, these discussions are usually framed in the “rat-race” frame. Its an interesting puzzle.
I’m personally not into status. I’m a one-wolf, keep to myself sort of person. I am overly (and pointlessly) educated, very low income (retired at 48), but oddly have (relatively) a lot of money. I lead a very, very simple life, and I’m content with far, far less material abundance than my American culture dictates I should be. Call me a class traitor. I don’t travel, except to wild areas by car. I love the Kootenay in B.C.
My wife of 35 years is the same way. So are my adult children, one of whom is an airline pilot.
Just an anecdote!
Thanks for your website and your hard work. This is the only news aggregator I use. Not much left on the internet that’s worth a damn. This is.
Is the issue whether lower income people also compete for status — of course they do — who can kick a ball further, or win at chess, or be more sexually appealing or bake a better cake — but do they also compete for pure, cold status, solely measured by wealth (not merely by using money, or equivalents to keep score), but by competing with other billionaires in conspicuous consumption or wastefulness? By definition no, of course not. At the billionaire level, it is clearly pathology. Did Bill Gates (or whoever it was) really enjoy his Venetian wedding more than he would have enjoyed one he spent only a few million on, or was it a major pain in the ass? Maybe the cut-off is when you get to the point where you prefer the $8,000 watch but buy the $12,000 one because… it’s the $12,000 one
In the US, even lower income people have been conditioned to PURCHASE status items even if that is not a great budget move. See fancy sneakers for men as a prime example.
And then of course there was Potlach. A ceremony practiced by people who had more than enough to eat, leisure time and were unencumbered by capitalism. Status came to the man who could give the most away. Accumulation with both a personal and social purpose.
Yes, but let’s not over-idealize. It’s still about status–a ceremony to publicly show how rich you are.
Sure, but if people are going to compete no matter what, a potlatch is a great way to channel those urges into something socially useful.
Yes, but it was also circular/reciprocal — and banned by the colonizers not because it celebrated wealth, but because it ultimately rejected it as a measure of status.
Precisely. The colonizers needed to eradicate each and every instance of indigenous gift economies in order to entrap everyone into their exploitative wage labor system. It’s yet another instance of the enclosures — eliminating any non-market opportunities for sustenance and social reproduction.
Did Potlach drive people to produce more and more?
capitalism is about have more in order to have more and perhaps to have still more … or that’s the way it looks.
The insight ascribed to Joseph Heller is a couple of thousand years old:
Epicurus: Nothing is enough to one for whom enough is very little. VaticanSayings#68
I agree that that Heller’s insight is likely older than Heller, but it is not quite the same as Epicurus’s: Heller’s enough was not a monkish poverty, but a life that comfortably met his foreseeable needs.
Tao te Ching #46 (Le Guin rendition)
In the “Complete Upmanship” by Stephen Potter, much advice is given about how to subvert usual status signalling by setting up one’s office with hand-me-down furniture and an old, obsolete telephone, wearing used clothes, driving an entry-level car, and the like. I have a few anecdotes by relatives and colleagues showing that this is indeed a thing.
Or at least it still was about three decades ago. I have not seen, read, or heard about that kind of attitude in more recent times.
This being said:
“Goldman had long been extremely skilled at this, particularly in figuring out how to run the place so that politics were limited to the Management Committee and everyone else was kept focused on making money for the firm and not trying to get advantage over each other.”
This looks intriguing. Are you still under an NDA that prevents you from revealing to the NC audience some of people management tricks used at Goldman?
When Amazon first started, the PR they put out in the Seattle area at the time was of a plucky little company whose CEO used a desk made of an old door placed on top of cinderblocks, and the savings from the lack of executive perks would be passed on the employees. I had friends who did get paid decently plus stock options for warehouse work at the time, and the door thing may well have been true too.
It’s not anymore – serious bait and switch by Bezos there.
This brings to mind this scene from “Key Largo” (46 secs ), which says it all in a nutshell.
“It is not sufficient that I have, but you also must have not.”
Anon.
I love the looks and comments I get from students who find out that my phone is 4 or 5 generations behind mine, or that their shoes cost more than my entire wardrobe – but they cannot explain to me how their 300 dollar tennis shoes are superior to my 30 dollar (on sale, with coupon) ones.
I like the point about buying “up” to imitate the “betters.” Because if you can’t beat ’em, join ’em, right?
Well, $300 for a pair of tennis shoes is a bit weird, but I’ve paid the price in discomfort for buying down my shoe choices. I’ve come to the point where $170 Keen Targhee IV is perpetually a go-to comfortable and dependable choice, but cost painful for this modest buyer. Nice to just re-order the exact same every few years and pray Keen doesn’t enshittify it in the interim.
Besides, this upscale town is all Audi, Mercedes, Lexus, BMW yard ornament status symbols, so shoes are kind of meh in comparison.
If one’s sympathies tend to be in harmony with cats of all stripes, the feline nature defines the
social contract as: “if it feels obligatory, then the risk of it becoming a negative experience is accelerated”.
(Dr Claude Béata)
I have thought about this some – the stories we create for ourselves, meaning and purpose. I know many university professors and the language draped over the collegiate experience is often about attainment and separating oneself from the pack. It’s a bit of setup.
So what I think is that these young people – and many will end up in the PMC – will have to intellectually dismantle more or less the entire story of the purpose of their education, and consequentially who they might be, and what their story will be, and what will provide them with meaning and purpose as they age into a world of a radically changing climate. Over and over, every year, another group.
And then an aside, have a long appreciation for Veblen. Thanks for posting.
What was interesting about the Soviet Union/Eastern Block is that they seemed to have solved the elite motivation problem (hand out ribbons and prizes) and generated some of the greatest minds in history, with amazing innovations. Napoleon was probably right that men will risk their lives for a ribbon.
On the other hand, they did not successfully motivate the average person, and things ran aground in the 70’s as money was borrowed, capital was invested, but productivity did not improve. Unfortunately, as elite overproduction continues, and is financed by vacuuming all available excess from the workers, things could end up in a nasty civil war over resources at the top, and ranks of discontented people at the bottom.
You either loosely organize by rank or by wealth.
The scope of it:
https://www.salon.com/2025/06/01/in-the-fomo-economy-social-media-drives-gen-z-into-debt/
In some societies (often called “primitive”) the conspicuous consumption is lavished upon others. Status accrues to the one who can provide the biggest feast or give the most valuable gifts to others. Who those others were apparently became more narrowly restricted over the ages, till most of one’s community got left out of it, as now. It becomes a J. D. Vance hierarchy of “me then my family then my friends” and screw everyone else.
I think most people would agree with the idea of private property, to be protected by the law. But property that a person can use for its own sake, even just to decorate their living space, and certainly for survival, versus property that is merely symbolic of wealth or extravagance. Having a billion dollars is not really private property, nor is having 100,000 acres of land, or ten beautiful houses in ten different countries. So the notion of property as seemingly central to our civilization is defective. It includes too many things which don’t matter to any sane person and makes the hoarding of things unused seem like a marker of social distinction rather than a moral failing. I must not be a communist because I don’t want to see private property abolished, but I do want to see the concept drastically limited to things that will be useful for non-symbolic purposes in one’s local vicinity and not for a playing a hierarchical social game of keep-away on a global scale.
I think we need to start seeing extreme wealth as mentally, psychologically, socially and intellectually damaging – crippling even. It might even be the most pernicious and debilitating disability there is, would be worthwhile to study its effects and impacts.
Surrounded by those who don’t have their interests at heart, shielded from reality, with no true friends, no true love, no healthy bonds, and the bonds of family grotesquely twisted, and your entre human worth reduced to your wealth.
And those currently suffering from extreme wealth are proving to be case studies.
I’m fairly certain that recognition of a disordered love of money was recognized at least as long ago as Aristotle. We just have the misfortune to live in a society so thoroughly immersed in neoliberalism and its associated anti-social structures (in no small part maintained by constant soaking in Bernays sauce) that much wisdom has been forgotten or purposely hidden from us.
I have often thought over the years that Veblen does much to explain the current status of the US military. The appearance of threat (ever more ‘feature rich’ and expensive weapons) being their status display. The appearance of threat rather than it’s substance.
Plus actually producing weapons in realistic numbers for the true implementation of hegemony is much more actual work than producing a few dazzling wunderwaffen.
The oligarchs never compete over who has the MOST yachts. Just who has the biggest.
I think professional sports is a multi class example of conspicuous consumption. The millionaire can afford front row season tickets and all the play off games; PMC, season tickets for row 20 and a few play off games; and working class, a couple of mis season games and a jersey. All can show some conspicuous consumption to other members of their class, who rank spectator sports as important.
Meanwhile, those who don’t fall for that, play their sport with friends and neighbors (or at least in the past).
I need to read ‘Theory’ again, it is important even if old.
In the late 1950s my father and I could walk up to the ticket booth for our major league baseball team, get tickets for seats maybe six or seven rows back halfway up the third base line, buy our popcorn (me) and beer (him) and watch the ballgame. Twenty years later I think it was mainly bleacher seats available like that. Now, a tiny number of seats are available at the gate. Sports were not a glitzy big business in the 1950s, most games were not televised, and the athletes were not paid the astronomical salaries they get now. Somewhere along the line it became a huge business, and legalized betting and prediction markets are amplifying that even more. As an old person who remembers how casual it was, I feel like they’ve taken the fun and spontaneity out of it (and certainly the affordability for the ordinary fan). As you say, everything about it shrieks “conspicuous consumption” now. And being a sports fan has become part of an identity (that dreaded word) now for those who can afford it, the way giant pickup trucks also have. A simple pastime and formerly humble vehicle have become status markers for people desperate to belong to a questionable tribe.
Many years ago went to a minor league ballgame with a friend and had a wonderful time. I’m sure it was because it was the kind of experience that the major leagues used to offer in the 50s.
It wasn’t uncommon on the back of baseball cards in the 1960’s to state what a player’s off-season occupation was.
I think true money grubbing in our country began in earnest in the mid 70’s when pro players got million $ a year contracts, which had to make bankers and Wall*Streeters envious, and here we are with a bunch of manna gluttons who mostly have to live up to their wealth vis a vis ostentatious displays.
Ohhhh man … Veblen … ❤️
Rich people trying to outdo each other and establish chasmic separation from “the poors” keeps entire (allbethey niche) industries like hypercars, ultra-luxury yachts and private jets alive. You don’t have to go that far for examples, though. Sports stadia and the evolution toward providing more luxury boxes is something that’s been happening for decades, but few would associate with conspicuous consumption. One just has to ask: who’s up in these boxes??! Oh… it’s Taylor, and her mom … and the team owner.
And no, money beyond a certain point does not provide more happiness. Utility curves FTW! What true of beers (my professor’s fave example LOL) is true for the one’s and zero’s in someone’s accounts. Yves’ little anecdote is telling – for people who can never have “enough”, there will never be real “happiness”.
IIRC Gore Vidal once said that there are many wealthy people who keep a low profile, and are very happy that you and I have never heard of them. So I wonder if the conspicuous consumption/never enough bunch are just the ones who like to show off, and/or feel so insecure that they don’t dare stop for fear that they could lose everything.
I believe that there was a time when this distinction was recognized by the term “nouveau riches.”
Here’s Nate Hagens’s very persuasive take on this. Humans have a need for prestige. In small bands of hunter-gatherers, every adult human’s contribution was important to the band’s survival, and each individual’s prestige was attained by doing one’s essential task and doing it well. Hagens then explores how this morphs into conspicuous consumption as humans assemble in larger and larger groups:
“Humanity as Dr. Jekkyl and Mr. Hyde” (spot cut)
This. There probably isn’t any utility in “social signaling” of the conspicuous consumption sort in groups at or below the Dunbar number — there, everyone really knows you already.
Those groups also aren’t likely big enough to generate large surpluses or sufficient division of labor to support much social stratification anyway.
Just thinking about what it would mean to have economic policies that actively discouraged status competition. What would those policies look like and how would they be different from the status quo? I guess a tax code that kept generational accumulation at some minimum and did not create loopholes and tax breaks for institutional money, for starters. Maybe some very different way to think about debt? Maybe the end of privileged state power vis a vis incorporation and insurance…I’m looking at you, Delaware!
I really wonder where you would start on such a project. But it would be such a great worthwhile enterprise.
“Conspicuous consumption” used to be a well-worn phrase identifying consumption by the rich that was intolerable, regardless of its fraction of the economy. Now consumer consumption by the rich is regularly highlighted, with no unpacking, as roughly half the economy, keeping it afloat, and every record-setting price for some piece of memorabilia rates a headline. The tail wags the dog, but could even the daunting “half the economy” still be an understatement? After all, one of the favorite pastimes of the rich is the shell game of identifying their consumer spending as business expenses, and if one is consumer spending at the super-yacht level, these ultimate purchases are accounting failures if they are not deemed businesses unto themselves. As for those seven or eight figure memorabilia purchases? Consumption or investment? As economic data, they must be put into one category or the other. Any guess I would make would probably be morally grounded, but that’s not how accounting rules are derived. Without such an accounting either/or, it’s obvious that such purchases are the peak of having your cake and eating it, too, where to purchase, to possess, to invest, is the height of consumption. The tail wags the dog, the reported ratio between the two more creative fiction than fact, the moment of truth maybe only coming when the tumor kills the host.