Conspicuous Wasters
Elon/ Kanye/ Tate Worship Explained by Veblen's forgotten Theory of the Leisure Class
My favourite part of the recent Kanye, sorry, 'Ye' saga was his interview with Piers Morgan. Well no, not all of it, because it was mainly insufferable. But just one specific moment at 2:15 where Ye goes,
Piers, how much money are you worth?
And Piers goes,
Not as much as you, sadly.
To which Kayne replies with the signature grin of the soon-to-be institutionalized,
Exaaactly. So why would I listen to you?
Why indeed.
I can think of a few reasons just off the top of my head. How about:
Because you're as mad as a box of frogs
Because you're miserable
Because wealth never stopped anyone from being mad and/or miserable
Because wealth does not imply superiority in matters of ethics
Because money is not a free pass to say anti-Semitic things…
I'm sure I missed a few, but you get the gist.
For Piers, however, this was quite the gotcha. If you zoom in, you can watch his eyes fall in split-second submission, his previously combative voice falter, his mind draw a blank. Why indeed should a rich man listen to a still-rich-but-not-quite-as-rich man?, he wonders desperately, forgetting the foundations of the western culture he pretends to be so fond of, from Socrates, to John the Baptist, to Jesus.
I'm…well…why don't you listen to my advice first and then work out if I'm wrong. Can we do that deal?
It was what I like to call a 'Reek' moment - something we see a lot among the wannabe alphas and so-called sigmas - that moment when a person who fully subscribes to the hierarchy of money, finds they must bend the knee to an absolute maniac, or all systems will crash.
You hear it in the voices of Tesla investors in recent zoom calls with Elon Musk, when they're starting to doubt his basic knowledge of the business he purports to run.
Elon, I believe you are the one true genius. Just help me understand what we're doing here with Twitter?! TEll Me wE're PlaYing 95D CHeSS!!
Faced with the lurking sensation their guy is maybe not the genius he makes himself out to be, fans of Tate, Trump, Kanye, [insert billionaire cult leader here] squeal the same refrain of last resort:
B..B…But he's got a Bugatti! He's richer than you!
like this is a whole, complete argument that needs no additional support. Which is perplexing for the rest of us, but to a certain section of society, it makes perfect sense.
The Veblen Effect
The behavioral economist, Thorstein Veblen, saw this coming. In his 1899 hit, the Theory of The Leisure Class, he explained how tribes would reward acts of prowess with status. However, over time, these rewards became material – trinkets and wives, the spoils of war – until eventually there came a point where the rewards eclipsed the acts of prowess they were supposed to represent. They became a mental shortcut. People would simply assume that if you had great wealth, you must have done something noble and worthy to have deserved it.
This backwards logic, dubbed the Veblen Effect, applies to things as well as people. Veblen observed how, in some cases, in an apparent anomaly to the laws of supply and demand, increasing price can, by itself, increase demand, and decreasing price can, by itself, decrease demand.
Veblen cited the example of a 17th century French art dealer, who, upon seeing that a painting wasn't selling, would double its price instead of lowering it. He knew that by raising the price, the product would become more desirable. People would suddenly see an intrinsic value they weren't able to see before – an element of genius or a backstory of noble provenance. They would invent a reason for the high price in order to reduce their cognitive dissonance.
We all do it to a certain extent. We've all bought a more expensive version of a product due to it somehow being 'better', even though our definition of 'better' is entirely mystical if we're honest with ourselves, and anyway, we have no intention of measuring it.
Conversely, we've all felt the reverse Veblen effect of finding out something we thought was expensive was in fact a cheap knockoff. We've all felt what it was to immediately love that object less.
The Veblen effect works because it's hard to determine value, and even harder to measure it over a period of time. I once worked in an accounting company that had the task of valuing companies and individuals, and let me tell you, there was a portion of that job that involved putting your finger in the air and feeling which way the wind was at.
And that was for the relatively simple task of quantifying something in monetary terms. Attempting to quantify value in non-monetary terms is nigh-on impossible. To work out the true value of anything, you have to take into account a ton of variables.
Value in itself is a nebulous concept. A long time ago, when the idea was formed in the mind of primitive man, it meant something or someone that benefitted the furtherance of the survival of the tribe, and it still means that when you get down to it. But this is also where it quickly gets murky. What do we mean by 'tribe' in today's society? Shouldn't we be measuring outcomes that would benefit the greatest number of mankind? What do we mean by benefit? And furtherance? And so on.
The use of money as a way of evaluating value is a result of a lack of information, a lack of imagination and a lack of time. Like the 'invisible hand' of liberal economics, it's a mental shortcut which especially appeals to the intellectually lazy. But let's not kid ourselves – it appeals to us all on some level. Every time we invoke near mythical leadership skills to justify the salary of a CEO, or world-class musical talent to justify the price of Yeezy trainers, we're only about two steps removed from buying an NFT.
The Wastefulness is Precisely the Point
The Veblen effect is strongest when the shortcut is taken to extremes. In order to make yourself or your product really high-status, you can't just show you have money, you must also show you're able to waste money. After all, who has more money than the person who has money to waste?
Veblen calls this The Great Economic Law of Conspicuous Waste. It works as follows:
The more of a giant waste of time and energy something is, the higher its status will be.
Once you accept this law, and fully integrate it into your mind's eye, the world makes a lot more sense.
Suddenly you understand product packaging. You understand the pyramids. You understand that gold is high value precisely because it's one of the least useful metals. You understand why Andrew Tate needed 30 Bugattis instead of one. You understand why Elon's fans weren't bothered he overpaid for Twitter by about 20 billion: Far from revealing his incompetence, it made the deal higher status.
Forget all the other tricks and get-rich tips these gurus tell you about working hard and smart and being humble. No one is doing the Jesus act here. No one is doing the barefoot cult leader in a sackcloth. We're at a point in late-stage capitalism where even conspicuous consumption is no longer enough. Every single one of those grifters is leveraging conspicuous waste.
When you think about it this way, it's actually not surprising that the conscientious and the religious are among the most vulnerable to these kinds of leaders. You kind of have to believe there's a god that gives nice things to good people to fall for the Veblen effect in the first place. You have to believe that meritocracy exists. And then you have to come up with an elaborate fantasy about the prowess of your leader both equal and opposite to the waste they represent. If the waste is disgusting enough, you can create a god.
This is how you get evangelicals worshiping Trump. His golden toilet required his fans to create a compensatory fantasy so extreme, it broke their brains on a cellular level.
Conspicuous Wasters
Trump has an instinct for these things, but of all the conspicuous wasters, Andrew Tate is the most self-aware. People think he's popular because of his misogyny, but I would argue his misogyny is a symptom rather than the cause. It's the lifestyle of conspicuous waste that's the real attraction, of which misogyny is just one symbolic part. What Tate's fans are really after is status, as Tate knows very well. Watch him describe how he makes his girlfriend bring him two coffees in the morning, one of which he purposefully doesn't drink, because, and I quote:
The fact that it's basically pointless is the whole point of it. It's just a respect thing. It's doing something essentially pointless to show you have respect for me.
This guy gets it. In fact, if I wasn't fairly sure he despises books, I could believe he'd studied the Theory of the Leisure Class extensively. But where Veblen meant it as a wry observation about a particularly predatory worldview he considered at odds with society's deep need for true value, Tate takes it as a universal roadmap. He uses it in a spirit of self-awareness Elon and Kanye are too vain to admit. They have fallen for their own veblen effect and herein lies their Achilles heel.
Hopium
Luckily for those of us on the sidelines who never really subscribed to the cult of money, but have to suffer the consequences of at least half the population succumbing to this predatory delirium, there is an upside.
Among the delusions that inflict the rich man, is the kidding themselves that they should be loved for more than just their money. Sometimes this leads them to becoming obsessed with «gold diggers» and being loved «for who they are». Sometimes this delusion will lead them to believing they must have a grand purpose, like saving humanity from, I dunno, ‘woke’, or something. In any case, it tends to lead to them making very bad decisions and losing their wealth, as we've seen with Kanye and Elon recently.
With a little bit of luck, once they start to lose their money and the acts of conspicuous waste decrease, their followers will perceive a certain tight-fistedness they find unbecoming. Then all fantasies of genius and leadership and noble DNA will go as quickly as they arrived, and we'll all say,
Ah well, maybe money isn't such a bad arbiter after all
Which is also problematic, but hey-ho, that's an article for another day…
Fantastic article, incredibly well articulated. Couldn't agree more.