Friday, 21 September 2012

Part VI - How Much is Enough?

This is part of a series discussing The Theory of the Leisure Class, by Thorstein Veblen.  His second chapter is titled Pecuniary Emulation. 

In the last post, we ended with Veblen’s view that there is a certain/indefinite standard of wealth that is required to have the respect of one’s neighbours and therefore any self-esteem. 

In order to have self-respect one must have as much as others with whom he classes himself and it is ‘gratifying’ to have more.  Sadly, as fast has a person acquires new things and gets used to the new standard of wealth, the new standard soon ceases to give noticeably greater satisfaction than the earlier standard did.  Each new financial standard demands a yet higher one, all for the purpose of maintaining a high rank in comparison with the rest of the community.  So long as a person feels at a disadvantage, he will ‘live in chronic dissatisfaction with his present lot’.  When he reaches the normal pecuniary standard of the community, he won’t just be chronically dissatisfied, he’ll have a ‘restless straining to place a wider and ever-widening pecuniary interval between himself and this average standard.’  

“The invidious comparison can never become so favourable to the individual making it that he would not gladly rate himself still higher relatively to his competitors in the struggle for pecuniary reputability”. 

This desire for wealth cannot be satiated for the community as a whole either.  However widely, equally or fairly it may be distributed, no general increase of the community’s wealth can make any approach to satiating this need because of this desire of every one to excel everyone else in the accumulation of goods.  If, Veblen argues, the incentive to accumulate were about subsistence or physical comfort, then the community might reach a point of satisfactory  industrial efficiency, but since the struggle is a race for reputability and invidious comparison, no such position can be attained.

Veblen doesn’t deny that there is a desire for comfort and security, only that what is considered sufficient for these is continually upgraded in the modern community.  What is considered a decent livelihood, what objects are thought necessary for comfort, are influenced by pecuniary emulation.  Also, the power conferred by wealth gives motive for accumulation, as well as the propensity for purposeful activity as an agent, a cause of change. 

As individual ownership unfolds, accumulation of goods becomes the obvious purposeful activity, aimed at straining to excel others in pecuniary achievement.  Relative success is the legitimate end of effort.  Purposeful effort comes to result in a more creditable showing of accumulated wealth.

Veblen claims that the term ‘invidious’ is not used to commend or deplore any characteristic the word is used to describe.  It

“…is used in a technical sense as describing a comparison of persons with a view to rating and grading them in respect of relative worth or value — in an aesthetic or moral sense — and so awarding and defining the relative degrees of complacency with which they may legitimately be contemplated by themselves and by others. An invidious comparison is a process of valuation of persons in respect of worth.” 

Sounds fairly deporable to me.

In the next post, I will begin discussing ideas in Veblen’s third chapter, titled Conspicuous Leisure.


Beryl said...

If I had read this before I bought a home to raise children in, I might have bought one of the best houses in a lesser neighborhood, instead of an inexpensive house in the city's best neighborhood. A good lesson that living in Oklahoma can teach - affordable housing is better for the mental health of the community.

Shelley said...

Beryl - Buying in a good neighbourhood is always a better deal, a concept I learned the hard way. Mind, here in Britain one can pay way over the top to live in a 'prestigious' area. I chose a notch down and went for just a 'good' area. I think I have nicer neighbours. Last I looked, only Michigan had a lower cost of living than Oklahoma. I would have said I'd never live in Michigan, until I visited family there...

Susan Partlan said...

Did you read Capital by John Lanchester? It's really great. Anyway there's a character in the novel who fits this profile of continuing to purchase to impress.

Gam Kau said...

Fascinating! Isn't it so interesting how applicable his ideas are to modern society? I guess it isn't so surprisingly since he starts off with "savage" or more primitive societies and it is applicable backwards it is applicable forwards.
I think being very frugal has made me aware of the level of consumption (conspicuous?) that is taking place in the world. I am keen to understand the motivation for it and this work goes a LONG way in explaining it.
Thank you for taking the time to write this series!