(Today we welcome Robert Frank, author of “Falling Behind: How Rising Inequality Harms the Middle Class.” Please join us in the comments — jh)
We hear a lot about income inequality these days and if you’re like me, you probably wonder, other than the fundamental unfairness of it all, why this matters. After all, life isn’t fair — get back to work and stop lallygagging.
As it turns out it matters a great deal, and that sense of dissatisfaction and anxiety so many of us feel is a direct result of the conspicuous consumption of the fabulously wealthy overclass trickling down through society and making it necessary for people to constantly buy more, even as they are earning the same. According to Frank, it’s not just keeping up with the Joneses or class envy or any of the other things that people usually attribute to those who live beyond their means. It’s a natural, human response to the context in which they live. Frank makes a compelling case that measuring yourself against your neighbors, co-workers or whatever, isn’t just a matter of “keeping score.” It’s the way we make sense of the world. And that measure is affected every day by what the super-rich are buying.
In a delightfully droll passage, Frank describes going shopping to replace the battered $89.00 bar-b-q he’d used quite happily for years, until all his repairs finally failed and it fell apart. He sees this amazing Viking grill extravaganza with burners for stir frying and rotisseries that practically cook the food itself and deliver it to your table. It costs $5,000. But, boy is it awesome. He reluctantly turns away and contemplates a different model with some of the same features, but now that he’s seen the top of the line, it just isn’t as impressive. But being a responsible consumer he realizes that he can’t be that extravagant and he considers buying this more basic model — for $1,160. It’s so improved from the banged up old $89.00 model on which he’d happily grilled for years they might as well not even be called a bar-b-q, but in spite of that, he feels a vague sense of disappointment at what it doesn’t have compared to the fancy Lamborghini level grill. Buying it would feel positively frugal, even though it’s ridiculously expensive on its own terms. I’m sure you’ve all been there. You have no idea what’s out there, but once you see something with all the bells and whistles you subconsciously compare everything else you see to it. And something that you would have found to be an amazing improvement over what you once had, suddenly becomes a compromise.
For the record, Frank settles on a $250.00 Weber and felt extremely frugal buying it — though it cost three times what his other grill had cost. But you can also tell by the loving detail with which he describes those more expensive models, that they made a lasting impression. He went back a year later to look at them again and the top of the line model was now $13,000.00 — and that $1100.00 model now looks like a worthless piece of junk by comparison.
This is the mechanism by which the extremely wealthy change the context of our everyday lives in ways we aren’t even aware. And in a society that ties such fundamental community functions such as schools and public safety to property values and perceptions of power, it is almost a matter of necessity that the middle class keep reaching for the bigger house and the bigger car in order to maintain a stake in their community. It is perfectly understandable that people want to have their kids educated in good schools and live in safe neighborhoods.