Luxury Beliefs Death Spiral

(Max Borders, American Institute for Economic Research) It used to be that the wealthy elite distinguished themselves through so-called Veblen goods. Ostentatious displays like a big house or fancy car once sufficed to show you were a member of the upper crust. 

But times have changed. Today, to run among the elite, you have to show you care—with an emphasis on show.

If you believe social theorist Rob Henderson, today’s elites hold luxury beliefs. Such beliefs cost little to hold and often benefit the holder by improving her reputation in the in-group. So she’s likely to hold all manner of bizarre views. Most of these views will seem crazy to the plebs until they realize adopting them is a ticket to the cocktail party. 

“The chief purpose of luxury beliefs,” writes Henderson in Quillette, is to indicate evidence of the believer’s social class and education.”

Henderson notices that the indirect costs of luxury beliefs are often borne by the poor and middle class, financially or in terms of direct consequences. But thanks to social media, telegraphing your virtue is cheaper than a carton of McDonald’s french fries, despite costly effects on the rest of us.

“Starting salary for a teacher should be $125K and go up to $300-400K,” writes a Facebook connection who wants desperately to preen and peacock his goodness. 

Even though the average teacher salary in America ($65,090) is higher than the mean personal income ($57,143) – and teachers work fewer than 190 days per year with hours similar to other workers – the well-to-do can afford to think that starting teachers ought to make mad money. In most states, though, teacher salaries are funded by sales taxes or property taxes, which fall disproportionately on the poor and middle classes.

“No Human Is Illegal” reads millions of yard signs in wealthy enclaves. 

But as the denizens of Martha’s Vineyard will tell you, it’s cheap to put up a yard sign. It’s far more costly to take care of real people who turn up in your community with nothing. 

Forty-four hours after Florida Governor Ron Desantis’s stunt to fly fifty Venezuelans to the sanctuary island, Martha’s Vineyard’s elites sent the immigrants packing. It was purportedly because those elites lacked the “infrastructure” to help. Of course, the people of Brownsville, TX (median income $40,924) can relate. 

The problem with luxury-belief emulation is people tend to vote their beliefs, especially when there is no direct cost to doing so. But that means aggregate costs balloon, and those costs get shifted to taxpayers or added to the Yellen-Powell Mastercard.