The Death Of The Leisure Class
In which I discuss class, wealth, and a sea change in conspicuous consumption
About certain subjects, I have a compulsion to show off my knowledge.1 At a dinner party, I’ll often dig my nails into my palm rather than correct a misstatement. Sometimes, though, I can’t help myself. It’s a flaw in my manners. But it’s also one of the reasons I write.
Thorsten Veblen’s 1899 book, Theory of the Leisure Class, held that the upper class felt compelled to display their wealth through conspicuous consumption, measured not only by material luxury goods, but by avoiding work and spending their time in non-productive leisure. (clip below is about 20 seconds).
Veblen’s theory is dead.
Perhaps even in 1900, it was a dying vestige in America, only truly still alive in full force in England, as if somehow, impossibly, Veblen had gotten a sneak preview of the first few seasons of Downton Abbey.
Clothing
The wealthy consistently dressed in outfits that were elaborate, expensive, and constraining, thereby advertising both cost and the impossibility of performing manual labor.
That habit no longer holds in our casual-dress society: the Zuckerberg hoodie, the Steve Jobs (and Elizabeth Holmes) black turtleneck, the $100 Amazon coat that every woman on the Upper East Side seemed to be wearing a few winters ago. 2
Servants
To be part of Veblen’s Leisure Class, you needed servants to dress you, not because it was more efficient than doing it yourself, but to prevent you from performing a menial task. And to show you could afford to pay them.
While some of today’s wealthy employ large staffs, it’s because they’ve complicated their lives with multiple homes, sometimes boats and planes to manage, and multiple responsibilities. It’s like running a business, and it’s the opposite of leisure. 3
Travel
Travel, too, is no longer exclusive. But tourism in 1900 and before was quintessential conspicuous consumption; everything about it was long and costly. Trips abroad were measured in months not days with a quantity of luggage to match. A long trip showed that the traveler had no employment to keep them at home.
The Rentier Class
The conspicuous avoidance of employment, of having a job, was a crucial element of Veblen’s theory. Instead of work, the wealthy engaged in leisure activities that had no productive purpose. Desirable leisure activity elements included elaborate costumes, expensive equipment and animals, a duration lasting much of the day, and complex rituals. The formal fox hunt was ideal with its Veblen virtue of uselessness given that foxes were prey to be killed for sport, not for food.
Veblen’s Leisure Class is sometimes referred to as a “rentier” class, people living off of their wealth. I can think of exceptions, but the rule today is that the wealthy as a class work just as long if not longer hours than the less wealthy. If they became wealthy by being driven, their nature is to stay driven. So they naturally accrue to themselves a portfolio of workaday responsibilities that leaves them always on call and busy. 4
A flawed attempt to graft Veblen onto modern times
5 has popularized a theory called Luxury Beliefs, a claim that the modern version of Veblen’s conspicuous consumption is to believe in ideas that only the wealthy can “afford.” The luxury belief he cites often is “Defund the Police,” because the rich are victims of crime far less frequently than the poor. It’s a belief that signals both progressive virtue and relative immunity from its consequences by the rich believer. I subscribe to Rob Henderson’s newsletter, admire his work, and look forward to his posts.
However, his theory of Luxury Beliefs doesn't make sense to me.
First, and obviously, there’s no barrier to adopting any belief and thus no exclusivity.
Second, the evidence is not there. Henderson cites a YouGov poll about defunding the police taken in early June, 2020 after the George Floyd murder. The poll showed that 32% of those earning over $100k favored defunding the police compared to 22-23% who earned less than $100k.
$100k is not an accurate number to distinguish the upper class. To belong to the 1%, a household needs an income of over $500k. As well, the upper class is more accurately measured by wealth, not income.
In any case, even using $100k as the boundary, the YouGov poll stat of 32% vs. 22-23% is not very convincing.
Finally, the poll is very much outdated.
A Pew poll taken sixteen months later in October 2021 showed a significant decline in the desire to defund the police and a marked rise in the desire to increase police funding, particularly among the older demographic, which tends to be wealthier. 6
What’s left of Classism
In 2023, stratification by class is driven by our system of modern capitalism, which, since 1900, has become far more individualistic than class conforming. We can still often identify many, but not all, of the upper class by certain luxuries, chief among them the place, or places they live, where they send their children to school, how they travel, what art they might collect, and how they practice your philanthropy.
But there’s a choice as to how conspicuous, how loud or quiet, you feel you need to be about your wealth. You can be very wealthy and your values might lead you to send your children to public, not private school, to fly coach because you think first class is an absurd waste of money, and to make your philanthropy anonymous.
There are about 750 billionaires in the United States and about 130,000 families with a net worth of $30 million or more (defined as Ultra High Net Worth, or “UHNW”). 7
Yet we form our views of the wealthy from the relatively small percentage of billionaires and UHNW who are constantly in the public eye, either by career necessity–––Taylor Swift, LeBron James, Kim Kardashian–––or by choice because they covet the publicity–––Elon Musk, in a class by himself.
On social media where a lot of conspicuous flaunting can be found, it’s hard to tell what’s real. There’s the growing sophistication of digital image manipulation. Or people who rent a studio made to look like the interior of a private jet or who take a picture of themselves in a store holding an expensive handbag they don’t intend to buy.
And perhaps nothing forms our view of the modern wealthy more than how they’re portrayed in books, movies and television, which is almost invariably as despicable. Downton Abbey was an exception, because it showed some wealthy people who were admirable 8 But that was another time and another country.
Questions for the Comments
How do you feel about the rich in America as a class? Despicable? Worthy of emulation? Or somewhere in between? Or do you not think of the rich as a “class?”
“Nothing annoys me more,” said my wife, Deborah Roberts, upon reading this.
The Amazon Coat. First the Upper East Side, then it spread to the whole country.
People still dress up. For example, at a black tie event. But now men can rent a tux and women can rent a gown, and it’s very hard to tell the difference between owners and renters.
An executive recruiter once asked me if I’d be interested in a COO job managing the personal affairs and vast staff of a billionaire. The pay was competitive with COO jobs of public companies.
“In the early 20th century, rich Americans used their ample downtime to buy weekly movie tickets and dabble in sports. Today’s rich American men can afford vastly more downtime. But they have used their wealth to buy the strangest of prizes: more work!” From The Atlantic
My own observation is that the 1% and the 0.1% tend to be among the most driven to work. People like to do what they’re good at.
Here’s one of Rob’s posts about Luxury Beliefs. Luxury Beliefs Are Status Symbols
To quote from Pew:
“Majorities among those ages 50 and older favor increased spending on police, including 63% of those 65 and older. Young adults remain the biggest proponents of decreased police funding: Roughly a third (32%) of those ages 18 to 29 say there should be less spending on police in their area. This compares with 18% of those ages 30 to 49 and fewer than one-in-ten of those 50 and older.”
I’m a Lord Grantham fan, but my Downton Abbey heroes were Carson the butler and Bates the valet.
Important to keep in mind that Veblen was writing in a period of enormous income inequality in which the general population had no recourse. In the Panic of 1907, Pierpont Morgan bailed out the United States as an individual. Income tax was still six years away. Hereditary aristocracies still ruled in virtually every country in Europe and the financial aristocracy ruled in the US. In other words, the wealthy had little or nothing to fear from ordinary people. That was soon to change. We underestimate the impact of World War I on the ruling class, as well as art and culture, but when it was done, previously powerless segments of society had become a force to deal with. (Russia scared the willies out of everyone else, but Italy, Germany, Austria, etc.--even the UK--had upheavals of their own.) These new power groups have grown in size and sophistication. As such, the willingness of the super rich to flaunt their wealth and thereby become targets has diminished. Some still do, but most, if their names get in the news at all--Harlan Crow, Richard Uihlein, for example--evoke a "Who's that?" I would postulate that within their circle, their consumption is every bit as conspicuous, but they make a much more concerted effort to keep a low profile with the general public.
As always, I appreciate your reflections, David.
It all depends on the rich person in question, how they got their wealth, and how they behave. Living in Seattle, I dislike all the animosity towards Gates and Bezos - they at least built some incredible things, and people who take on risk to build a business should be compensated for that risk. Say what you will about Amazon, but e-commerce was coming for brick and mortar stores regardless and I’m glad it wasn’t the kids of Sam Walton to be the first mover because labor would be making $7.25 in those warehouses, Bezos was probably as good as it could get. Liked Musk when he kept his id in check - he builds worthwhile things too, but naming your kid Techno Mechanicus and calling him Tau instead of TexMex is frankly unforgivable lol - but he and Trump are poster children for why people need feedback and solid parenting. They are the Joffrey Baratheons of the modern world, which may be lost on you if you didn't watch Game of Thrones. Wealth in and of itself is a good, but wealth that gives one impunity corrupts both the character of the wealthy person from within and the world in which they operate. Also, inherited wealth is only a good up until a point.
A decent amount of class resentment comes from bare envy which is part of the human condition (I'm certainly guilty of it at times, and the remedy for that is gratitude which comes from character), but a decent amount comes from both seeing how so many of the have-nots literally have nothing, the contempt that the owners of businesses have for their workers and the constant demands to do more with less, the "creative destruction" that destroys the economic stability of those who get the short end of the stick, the widespread knowledge that the ultra-rich hide their money in offshore accounts and use legal gimmicks to get out of noblesse oblige, and of course the previously described examples of rich people behaving badly and getting away with it. The Trumps, Alex Jones, Musk, the Sacklers, who to me are one of the worst examples of this, at least those who had an active role in the business and knew what they were doing. White collar crime pays and people see it. No one went to prison and they had to pay a big fine but less than their profits, and they're still rich. Shoot, now Perdue (or its successor) sells fancy brand-name buprenorphine to treat the people whose addictions they sponsored, taking their cut from the public coming and going. But most wealthy aren't predatory, even though it seems the stock market rewards bad behavior more than good.
That is, a huge part of resentment of the wealthy comes not from the wealth but the system in which such wealth and inequality exists. Personally, I think billionaires should be taxed to the point they are no longer billionaires, but not in a spirit of vindictiveness. It's not about them specifically - building a business that employs others at living wages is a great thing to be commended. It's that the inequality itself is toxic, and it's not even a huge punishment to the titans of industry and tech, the money will flow upward to the top anyway, it's how the system works. I strongly feel that the only reason society tolerates billionaires is a failure to appreciate the difference between a million and a billion. On the flip side, I don't think corporations that have a majority of their payroll in the US should only pay taxes except for when they have a significant negative externality they cause. Because a huge part of backlash against the provision of a safety net comes from resentment at one's taxes going to "those people" considered undeserving or from a dislike of government in general, I'd rather just have a civic burning of the billion and first dollars + of any one person’s aggregate wealth each year on the Fourth of July as a patriotic duty and in exchange perhaps bring titles back (make Bezos the Duke of Amazon or something) or give recognition for that kind of sacrifice with, say, a seat in the state legislature or city council in which the business headquarters is so long as they live within its jurisdiction. Then the government should just print whatever money it needs to do the things it needs to do, like a significant UBI, Medicare for All, the military, public education, etc.
How such a process would be enforced I don't know - like how do you value a privately held Picasso? But the appeal of such a system would be that it could unite society in second-order effects. If I were a Bezos or a Musk with most of my billions in unrealized stock and faced the prospect of having that wealth erased on the Fourth of July, I would give away a lot of that stock (perhaps without voting rights) to Amazon employees and the governments and residents of Seattle and other places Amazon operated. If I were a Walton, I would give away a bunch of my Walmart stock to Walmart employees and the members of the communities in which Walmart operates, probably in the form of a retirement fund or with a long vesting period so that everyone wouldn't just quit. Being from Memphis and living in Seattle, I own a few shares each of FedEx, Amazon, Microsoft, and Boeing in my 401k - not enough to really reduce my diversification, but because I believe the incentives of a city's population should be aligned with the businesses that operate there. I love Memphis and Seattle and want them to succeed (along with the rest of the world, but I am partial), so it follows that I would want the businesses that employ the populations of said cities to succeed, assuming that they aren't sweatshops or AR-15 manufacturers.
It's utopian and likely requires people to be better than they actually are, and it's also a little bit of a digression for which I apologize. But what I like about that idea it creates the incentives for a form of capitalist socialism, a better mixed economy, without mandating it nor getting rid of the incentives to build a business, and it would actually make most of our rich heroes. What do you think?