Luxury Fever by Robert H. Frank

Author:Robert H. Frank
Language: eng
Format: epub
Published: 2018-09-29T16:00:00+00:00

Many forms of collective action—both laws and informal social norms—have a direct impact on the specific consumption imbalances that are our focus here. For example, it has been a common practice in human societies over thousands of years to enact sumptuary laws and to levy special taxes on luxury goods (more on these practices in chapter 13). And many communities have social norms that discourage conspicuous consumption.

The power of these norms became vividly apparent to me several years ago when they led me to pass up what otherwise would have been an irresistible consumption opportunity. A relative in California had bought a new Porsche 911 cabriolet during a visit to France. Because the franc was then trading cheaply against the dollar, he paid only $26,000 for essentially the same car that would have cost him $70,000 had he purchased it in the United States.

Actually, there was one important difference between the car he bought in Europe and the one he would have bought here. When he returned to California he discovered that he could not register his car there because it had been produced for the European market. California dealers had successfully lobbied for a law that made such cars illegal even if retrofitted to satisfy all California pollution regulations. As a stopgap measure, he registered it in Oregon, but in time this led to difficulty with his insurance company. In the end, he decided to sell the car and, being a family member, I had a chance to buy it for just a small fraction of its original market value (by then it was three years old). And since my home state of New York does not prohibit retrofitting European car models, I could have owned and operated it in full compliance with the law.

I was sorely tempted. Yet my small upstate college town has a strong, if usually unstated, social norm against conspicuous consumption. People here are far more likely to drive Volvos than Jaguars, and although ours is a cold climate, we almost never see anyone wearing a fur coat. At that time, a red Porsche convertible really would have been seen as an in-your-face car in a community like ours. Although I have never thought of myself as someone unusually sensitive to social pressure, I realized that unless I could put a sign on the car that explained how I happened to acquire it, I would never really feel comfortable driving it.

I still wonder whether I made the right decision. In the years since this episode, a number of other Porsches have materialized here, and seeing them always kindles a twinge of regret. But what is not in question is that, at the time, there would have been a social price to pay had I bought it.

There are other social norms whose effect, if not their explicit purpose, is to discourage excessive effort. For example, Christianity, Judaism, and many other religions of the world embrace Sabbath norms, which enjoin practitioners to set aside a day each week for rest and worship.

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