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The Price Of Luxury

October 17th, 2023 Leave a comment Go to comments

link: https://fortune.com/2023/10/11/bernard-arnault-lvmh-louis-vuitton-second-richest-man-luxury-spending/

In a famous quote by P.T. Barnum, it was stated that, ““Nobody ever lost a dollar by underestimating the taste of the American public.”  His reference was of course to ‘popular’ acts he featured in his eponymously named circus with partner James Bailey. The baser the acts, the more popular they seemed.  In the day, bearded women, tattooed strong men and morbidly obese people of ambiguous sexuality were unusual curiosities.  Today of course, not so much.

A very similar sentiment was expressed by H.L. Mencken, an American journalist who invoked, “No one in this world, so far as I know—and I have researched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”

Anyone paying attention to current events would have to concur with the sentiments expressed by these insightful men, so many decades ago since they are confirmed again and again in our own lifetime. Today, the appetite for base amusement continues unabated and it seems that there is no spectacle too crass or raw for public consumption.

The success of so many enterprises and individuals over the decades have relied exclusively on this principle.   While invoked in reference to the American public, people of all nations are no less susceptible.  Vast empires have been built on selling consumers not just the idea, but the need, to get or experience, the next big thing. In our time,  some of the best exponents of this are such companies as NIKE, Apple and Louis Vuitton, the inspiration for this post.

Without this urge to consume fed by savvy enterprises willing to satisfy a virtual bottomless pit of demand, we wouldn’t have the grotesque consumer economy we see worldwide today. The dark side of this enormous consumer economy is the associated debt that has been taken on by naïve consumers.  At the center of this consumer vortex are the so called ‘luxury brands’ that cater to those especially insecure types who need to express their superiority over others by association with a prestigious marque. Quite a combination: the need for amusement as well as the need to assuage insecurities.

And thus it was bizarre to observe that during the insanity of the past few years of lockdowns and sequestering, companies such as LVMH, the French based vendor of premier ‘luxury’ brands actually had record sales!  How odd that during a period when people weren’t allowed to venture outside their own homes, that they would feel the need to buy a $6000 purse or $3000 alligator shoes.  The expensive cognac, I get; why drink swill if you’re in jail.  To be sure, many high priced marques do provide higher quality products, that’s not the issue. The issue is the need for average consumers to ostentatiously display these goods as a means of separating themselves from the hoi polloi. It always seemed odd to me that someone sporting a garment with CHANEL imprinted on it in bold letters was essentially broadcasting their deep insecurities.  No wealthy person would display their lack of taste in such crass fashion.

This mindset of association with brands is much worse among those who are clearly unable to live in this world.  It’s truly bizarre to see young ghetto kids wearing sneakers costing many hundreds of dollars when they couldn’t find 3 bucks for a McDonald’s burger. But it’s no less different than the suburban couple up to their hairline in mortgage debt needing to own a Mercedes and a Range Rover.

Marketers have done their jobs brilliantly in creating the insatiable demand for things that are entirely discretionary.  They’re even able to do this with food.  Next time you go to Whole Foods, have a look at the range of prices for eggs.  You will pay much more if you want to be associated with the woke crowd. Marketers have successfully capitalized on people’s need to be associated with success and wealth. Imagine the 20 something mall gal sporting a Louis Vuitton labeled bag.  As if anyone is going to associate her with Paris Hilton.

Nothing wrong with aspiring to better things of course.  That’s the natural order of things.  However, what the little people manage to do is to make people like the Bernard Arnaults of the world even wealthier…which separates them even more from their aspirant customers. Ironically that’s exactly what the little people want to do when they flash their Rolexes to the peons. And isn’t that the entire point of the Instagram generation?  To show others exactly how vanilla others’ lives are compared to theirs?  They are only emulating what works for the big guys.

  1. Chris F
    October 18th, 2023 at 18:15 | #1

    That is article is so true. People buy all these expensive things thinking it will make them happy. Certainly it is making the rich guy selling it very happy.

  2. Chris F
    October 18th, 2023 at 18:26 | #2

    That is article is so true. People buy all these expensive things thinking it will make them happy. Certainly it is making the rich guy selling it very happy