Tag Archives: Thorstein Veblen

“The wealthier a country is, the more miserable it becomes…”

15 Mar

” The national belt-tightening expected to follow next month’s budget could prove to be of more benefit to the nation’s sense of well-being than if wealth levels were to soar” – The Observer’s Jamie Doward writes, reporting on an article by economists Curtis Eaton and Mukesh Eswaran in the current edition of the Economic Journal – not unfortunately available online so I’m drawing on Doward’s article for my info here.  Basing their work on the ideas of Thorstein Veblen – who coined the term “conspicuous consumption” back in 1899, they argue that once a country reaches a reasonable standard of living there is no benefit to society in further increasing wealth as luxury goods enjoyed by a few ‘represent a ‘zero-sum game’ for society: they satisfy the owners, making them appear wealthy, but everyone else is left feeling worse off. ”  OK, this seems unsurprising.  But, what’s interesting,  as Doward notes, is that this issue is getting quite a bit of attention right now, with a growing view across politics, psychology and science, that “a focus on individual wealth creation can be divisive.”  In particular it echoes the thesis of last year’s best seller “The Spirit Level: Why More Equal Societies Almost Always Do Better” by epidemiologists Richard Wilkinson and Kate Pickett, whose analysis of a wide range of health and well-being data showed a stark correlation between inequality and poor mental and physical health outcomes across society.

With the US and UK at the bottom of many of the tables in that book it’s clear we have a problem.  It’s chilling then that Eaton and Eswaran predict that “conspicuous consumption will become worse at time progresses.”