Conspicuous Consumption: The Crude Oil of the American Economy

The American economy can only continue churning along by successfully convincing people to consume products they probably don’t need, and therefore buy for some other reason. The term conspicuous consumption is credited to Thorsten Veblen, but the econonomic idea of conspicuous consumption traces back Karl Marx’s theory of commodity fetishism. Both are rooted in the same place, however: the unsatisfied consumer. Thorsten Veblen’s conspicuous consumption stems from the division of wealth that was infinitely more obvious a hundred years ago when the divide between the haves and have-nots was easier to ascertained though the divide is in actuality even wider today Thorsten Veblen’s conspicuous consumption grew from what he called pecuniary emulation.

Pecuniary emulation is simply fancy talk for what we now call “keeping up with the Joneses.” Veblen’s idea of pecuniary emulation is based on ownership. The concept is that material needs must first be met, then once we’re well taken care of we begin to consume products for an entirely different reason: to emulate those with more, those whose earnings ability are beyond our grasp. Pecuniary emulation doesn’t just stop as the level of the consumer, however. It weasels its subversion into the overall economic system and the very culture of society. In the words of Thorsten Veblen, "The possession of wealth confers honor. Nothing equally cogent can be said for the consumption of goods, nor for any other conceivable incentive to acquisition, and especially not for any incentive to accumulation of wealth."

Karl Marx’s theory on commodity fetishism lies behind Veblen’s statement that possessions have capacity for conferring honor upon a consumer. This is the reasoning behind almost all advertising, though Veblen’s honor has gradually been transformed into something else. Something that today we call “status.” The advertising industry spends billions in both dollars and manhours to convince us 24 hours a day that status is something that can be purchased.