Wealth: Is 2019 the end of opulence?


WITH A DEPARTURE FROM TRADITIONAL SIGNIFIERS, THE WORLD'S WEALTHIEST ARE EMBRACING DISCREET SPENDING ON SECURITY, EDUCATION & TRAVEL

Long synonymous with dripping diamonds, flashy Lamborghinis, Louis Vuitton luggage, and shiny Rolex timepieces, the world's wealthiest are becoming more discreet with their riches. Showing off wealth is no longer the way to signify having wealth. Investing in things like education and health helps the rich propel social mobility and gain access to what the middle class cannot. While flashiness is becoming less ubiquitous among the ultra-high-net-worth crowd, they’re spending more than ever before on security and privacy, trading in hilltop houses for homes in neighborhoods hidden from Google Street View. And in an era where mass consumption means both the upper class and the middle class can own the same luxury brand, the rich are forgoing material goods to invest in immaterial means as a way to signify status. It’s what Elizabeth Currid-Halkett calls “inconspicuous consumption” in her book “The Sum of Small Things: A Theory of an Aspirational Class.” It’s the opposite of “conspicuous consumption,” a term conceived of by Thorstein Veblen in “The Theory of the Leisure Class” referring to the concept of using material items to signify social status — a hallmark of previous elite spending, Currid-Halkett wrote in an article last year. “Given that everyone can now buy designer handbags and new cars, the rich have taken to using much more tacit signifiers of their social position." Yes, oligarchs and the super-rich still show off their wealth with yachts and Bentleys and gated mansions. But the dramatic changes in elite spending are driven by a well-to-do and educated elite. This new elite cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it – preferring to spend on services, education and human-capital investments over purely material goods. These new status behaviors are called inconspicuous consumption. None of the consumer choices that the term covers are inherently obvious or ostensibly material but they are, without question, exclusionary. Essentially, showing off wealth is no longer the way to signify having wealth. In the U.S. particularly, the top one percenters have been spending less on material goods since 2007, Currid-Halkett wrote, citing data from the US Consumer Expenditure Survey.

Association, for example, with the equestrian community of Wellington, Fla., home to private estates, ranches, and villas; or Aspen, Colo., with its winter glitterati who turn out for major holidays and events, are both non-conspicuous indicators of wealth. The same crowd that uses the private, back-door entrance at Roland Garros in Paris will be on-hand each year at Wimbledon and the Monte-Carlo Grand Prix, watching from penthouse balconies, far above the crowd. It’s a growing trend among not only millionaires and billionaires, but what Currid-Halkett calls “the aspirational class.” “This new elite cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it,” Currid-Halkett wrote. She adds, “Eschewing an overt materialism, the rich are investing significantly more in education, retirement, and health — all of which are immaterial, yet cost many times more than any handbag a middle-income consumer might buy.”

While much inconspicuous consumption is extremely expensive, it shows itself through less expensive but equally pronounced signaling – from reading The Economist to buying pasture-raised eggs. Inconspicuous consumption in other words, has become a shorthand through which the new elite signal their cultural capital to one another. In lockstep with the invoice for private preschool comes the knowledge that one should pack the lunch box with quinoa crackers and organic fruit. One might think these culinary practices are a commonplace example of modern-day parenthood, but one only needs to step outside the upper-middle-class bubbles of major cities to observe very different lunch-bag norms, consisting of processed snacks and practically no fruit. Similarly, while time in Los Angeles, San Francisco and New York City might make one think that every American mother breast feeds her child for a year, national statistics report that only 27 percent of mothers fulfill this American Academy of Pediatrics goal (in Alabama, that figure hovers at 11 percent). Knowing these seemingly inexpensive social norms is itself a rite of passage into today’s aspirational class. And that rite is far from costless: The Economist subscription might set one back only $100, but the awareness to subscribe and be seen with it tucked in one’s bag is likely the iterative result of spending time in elite social milieus and expensive educational institutions that prize this publication and discuss its contents. Investing in education propels social mobility. That inconspicuous consumption often goes unnoticed by the middle class but noticed by a fellow elite is what makes it so discreet. Currid-Halkett describes it as a shorthand for the elite to “signal their cultural capital” to each other and cement status. It reproduces privilege in a way that flaunting luxury couldn’t, she said. Displaying knowledge, such as referring to New Yorker articles, expresses this cultural capital, giving a person leverage to climb the social ladder and make connections, Currid-Halkett wrote. “In short, inconspicuous consumption confers social mobility,” she said. J.C. Pan of The New Republic described how parents try to reproduce their class position for their children. "They buy their kids boutique healthcare, take them on enriching trips to the Galapagos, and — most importantly — equip them with every educational advantage, from high-end preschools to SAT tutors to Ivy League tuition. In 2014, the top one percenters spent 860 percent more than the national average on education.” Just consider the wealthy families who are spending millions to live within walking distance of the world's best public elementary and secondary schools, or those paying as much as $60,000 for a university tour via private jet— they make such an investment in education in hopes of setting their children up for a successful, well-connected future. And often, the parents invest in their own knowledge and achievement by working all the time, another modern way of signifying status, Business Insider’s Shana Lebowitz reported. As Currid-Halkett put it: “For today’s aspirational class, inconspicuous consumption choices secure and preserve social status, even if they do not necessarily display it.” The security concerns of the world's wealthiest only begin with departing from a secure compound or private neighborhood. Bullet-proof cars and SUVs transport children to school or caregivers to the local grocers to pick up a few items. These beefed-up autos are nearly impossible to detect to the untrained eye, but the weight of a door, the slightly lower sit of the car due to weight, the larger turning radius and extra-thick windows are appreciated by those in-the-know. The French company Carat Duchatelet takes normal luxury automobiles and turns them into machines through a process known as "blindage" in French. The resulting car revels the U.S. president's armored limousine. Health and wellness also signify status. Vogue reported in 2015 that health and wellness had become a luxury status symbol, and it makes sense. And in an analysis last year, the Financial Times columnist Simon Kuper wrote, "The cultural elite spends relatively little on beauty products, but splurges on exercise, because it thinks that bodies (like food) should look natural." "The thin, toned body expresses this class’s worldview: Even leisure must be productive,” Kuper continued. “Instead of trawling shopping malls, class members narrate their family hikes on Facebook.” Some well-off New Yorkers pay up to $900 a month for a membership at Manhattan’s Performix House, an elite gym with a rigorous application process, a private entrance, and a content studio for social-media influencers. It’s the same feeling evoked by stepping out of a $30 SoulCycle spin class to buy a $10 green juice, or having a $200-plus membership to one of the United State's swankiest gym chains, Equinox, which even offers a $26,000 ultra-exclusive membership for the traveling mogul. “It’s like the only acceptable lifestyle brag,” a spin enthusiast told Vogue. “You are a douche if you brag about your car or how much money you make, but bragging about how much you spin is normal, though still very annoying.”