Posted on December 15, 2016
George Will is introducing the concept of “positional goods” to a wider audience. That public service constitutes what economists call a “public good,” which is about as opposite from a positional good as you can get. I was unaware of this useful quote from Adam Smith’s Wealth of Nations: “The chief enjoyment of riches consists in the parade of riches.”
There are several not-so-good things about Will’s column.
1. Will never mentions Thorstein Veblen’s important book Theory of the Leisure Class, nor the term “conspicuous consumption” which it popularized. Veblen was considerably more critical of the rich than is Wills.
2. Yet the only type of positional good Wills discusses is what economists call “Veblen goods,” meaning goods whose major purpose is conspicuous consumption.
3. Desire for Veblen goods does not explain three much darker positional goods pursued by the Koch brothers and many other billionaire oligarchs:
a. competitive accumulation, as in who has the most billions
b. power, the ultimate greed that propels the Kochs
c. absolute inequality, which requires driving the middle class and the poor down as close to utter immiseration as can be managed.
4. Will thinks that conspicuous consumption is a social constant of no policy significance, except as an indicator of the innate limits of egalitarianism. Actually, conspicuous consumption varies across societies and subcultures (apparently reaching one kind of extreme in the institution of the potlatch among the Kwakiutls and other northwestern Native Americans). It can also be affected by public policy, such as a luxury tax, and by public derision, as by Veblen.