Conspicuous consumption is probably one of the most damaging aspects of American society. It involves using our purchases to serve as a way to show off a particular aspect of who we are want to be. As Kevin Simler and Robin Hanson write in their book The Elephant in the Brain, “the idea that we use purchases to flaunt our wealth is known as conspicuous consumption. It’s an accusation that we buy things not so much for purely personal enjoyment as for showing off or keeping up with the Joneses.”
Throughout the book Hanson and Simler look at human behaviors and consider them alongside the stated reasons, beliefs, and excuses that people have for those behaviors. There are many things in life that we do without acknowledging ulterior motives. We have motivations that lie beneath the surface and drive our thoughts, feelings, and opinions. We do not examine and acknowledge these motivations, but they are real, and they are there.
Conspicuous consumption is the use of our wealth and ability to make purchases in a way that is ostensibly about one thing, but very likely are about something else that we would like to keep hidden from others. When we buy a fancy new sports car, we will tell others about incredible new technology, about how hard we have worked and how we deserve to treat ourselves, or about the incredible performance of the car. What we likely won’t tell people is that we felt that we deserved more attention and wanted to show off that could afford a new sports car. What we won’t acknowledge, even to ourselves, is how much our behavior is driven by others and by a desire to fit in, be praised, and make sure everyone is aware of our beliefs about our personal value.
Each of those things (showing how much we fit in, telling people how valuable we are, and receiving praise) are aspects of social life that we can’t just go around and obtain directly. Instead, we have to signal those things through behaviors and activities that we can spin as more sociable and more acceptable behaviors. Money and wealth gives us a chance to show off and to signal our competence or connectedness to the outside world. It gives us a way to brag without having to outright brag. We can be more humble in the ways that we show off by being indirect.
However conspicuous consumption can drive us to ignore climate change and the externalities of our actions. It can create stress as we strive to make purchases that put us in perilous financial situations – the opposite of what the purchase is supposed to signal. And it is ultimately all about gaining more status at the expense of others who cannot keep up. We spend a lot of time and energy attempting to show off our wealth so that we can be rewarded not by the thing we purchase, but with praise and respect of others that we may not really deserve. We should acknowledge these pressures and chose when we are going to be conspicuous with our wealth, and when we will exit the signaling contest avoid showing off.