Conspicuous Consumption and Classical Sociological Theory

Introduction to Conspicuous Consumption

What exactly is conspicuous consumption? It is the phenomenon of buying numerous goods or services with the sole and explicit purpose of flaunting one's wealth. Another way of describing conspicuous consumption is by examining the evolution of the working class and the difference between this class and the leisure class that is forming today, which is producing a further division in the servant classes. It is this class of people — most of whom enjoy the pleasures of leisure — who have taken it upon themselves to vicariously and explicitly fulfill the role of consumer of a large number of extraneous goods. Here, the very act of purchasing is taken as a show of wealth, and often the goods and services in question are beyond the buyer's means.

In the early stages of what is known as "predatory culture," the sole economic distinction was between an "honorable" superior class made up mainly of able-bodied men who could work hard, and an inferior class of women who had to labor for a living. This arrangement became an ideal scheme of life in which men could easily consume what women had to labor so hard to produce. Conspicuous consumption, as theorized by Thorstein Veblen, carried very definite sociological impact visible across many spheres of social life. Consider, for example, the purchasing behavior of two different Finnish provinces over a specified period, as exhibited in their purchase of automobiles. That study revealed that consumers' purchases are tremendously influenced by the purchasing behavior of their neighbors — and this held true for more recent purchases as well as for neighbors who were closer in geographic location.

Interpersonal Effects on Consumer Behavior

It was also evident that in the purchase of automobiles there was no place for emotional differences such as envy, jealousy, or an urge to conform, which meant there was no clear interpersonal interference between neighbors in the process of buying an automobile. The reason for this may be as simple as information sharing among neighbors. Mainstream economists have long debated the question of the impact that interpersonal effects have on consumption. Alfred Marshall, in his Principles of Economics — a treatise on nineteenth-century economics — made no explicit reference to interpersonal effects, though he acknowledged their impact on consumption. He was even chided by Thorstein Veblen in 1898 for having failed to fully acknowledge these effects on consumerism.

Friedman, in 1957, rejected outright any suggestion that interpersonal relations could have any impact on consumerism, while others such as Morgenstern (1948) and Stigler (1950) did acknowledge the presence of such effects. What exactly is the meaning of an interpersonal effect originating from information versus behavior? Information economics accounts for interpersonal effects when the consumption of other people is taken as evidence that certain goods or services have been consumed, thereby resolving uncertainty about the intrinsic utility to be received from purchasing that good or service. Information about the good — including its resale value and the price to be paid — is thereby obtained from observing others' behavior.

Information and Behavioral Models of Consumption

Behavioral economics, by contrast, accounts for the effect of a good or service when that effect has been influenced by the consumption patterns of others, driven by a basic need to conform to or revolt against the expectations others hold. Motives of envy, jealousy, or snobbery are sometimes evident at this point. Information models take many forms — rational, dynamic, or emotional. Rational models deal with the observed actions of different consumers, in which the quality of a product or service is appropriately revealed. In the category of static information models, the actions of all consumers are quite informative, especially if each consumer possesses private information, meaning that equilibrium prices would serve as efficient statistics for measuring information.

In dynamic information models, sequentiality is often exhibited, meaning that the actions of a few individuals may lead to a type of "herd" behavior that can be entirely rational. In emotional models — where "keeping up with the Joneses" is often the primary reason for a purchase — Thorstein Veblen's sociological analyses of the origins of consumer preferences help explain the ways in which upper classes generally attempt to distinguish themselves from lower classes through the purchase of luxury goods and services, and the ways in which lower classes attempt to emulate that behavior. The motive for such imitative behavior can be taken as quite unrelated to the basic utilitarian function of the good itself.

The want and need to consume is not new; it has existed for millennia, and people must consume in order to survive. Consumption, however, has been changing and evolving in nature until it has reached a point where people want to make their lives marginally easier, and in order to achieve this, they research the ways and means to do so, using available resources more efficiently. With this has come the inevitable result of wanting to control the means of achieving an easier life, and as a result, consumer and consumption patterns have evolved over time based on who can effectively control those means.