The Lure of Luxury

Monday, November 2, 2015

Photo: scion_cho

Why would anyone spend thousands of dollars on a Prada handbag, an Armani suit, or a Rolex watch? If you really need to know the time, buy a cheap Timex or just look at your phone and send the money you have saved to Oxfam. Certain consumer behaviors seem irrational, wasteful, even evil. What drives people to possess so much more than they need?

Maybe they have good taste. In her wonderful 2003 book The Substance of Style, Virginia Postrel argues that our reaction to many consumer items is “immediate, perceptual, and emotional.” We want these things because of the pleasure we get from looking at and interacting with high-quality products—and there is nothing wrong with this. “Decoration and adornment are neither higher nor lower than ‘real’ life,” she writes. “They are part of it.”

Postrel is pushing back against a more cynical theory held by many sociologists, economists, and evolutionary theorists. Building from the insights of Thorstein Veblen, they argue that we buy such things as status symbols. Though we are often unaware of it and might angrily deny it, we are driven to accumulate ostentatious goods to impress others. Evolutionary psychologist Geoffrey Miller gives this theory an adaptationist twist, arguing that the hunger for these luxury goods is a modern expression of the evolved desire to signal attractive traits—such as intelligence, ambition, and power—to entice mates: Charles Darwin’s sexual selection meets Veblen’s conspicuous consumption.

Signaling is a theory with broad scope—it has been applied to everything from self-mutilating behavior to the fact that the best private schools teach dead languages—but it is most blatant in the consumer world. Advertisements are often pure signaling fantasies. Your neighbors gasp as your car drives by; the attractive stranger in a bar is aroused by your choice of beer; your spouse and children love you because you bought the right brand of frozen pizza. Consistent with this, neuroscience studies reveal that when people look at products they judge to be “cool,” brain areas associated with praise and social approval are activated.

Most people own things that they don’t really need. It is worth thinking about why.

If such purchases are motivated by status enhancement, they become positional goods: their value is determined by what other people possess. This inspires a powerful critique of consumerism. Status is a zero-sum game, and just as countries in a literal arms race have to strip away resources from domestic priorities, the figurative arms race that economist Robert H. Frank calls “luxury fever” takes away from individual consumers money that would be better spent on more substantial goods, such as socializing and travel. It is hard for people to opt out. To say that an individual can simply refuse to participate is like saying that countries in a literal arms race can choose to stop buying all those fighter planes and put the money into school lunches and Shakespeare in the Park. Sure they can—if they don’t mind being invaded. If everyone else buys fancy suits for their job interviews, then I risk unemployment by choosing not to.

We would be better off, then, if some Leviathan could force us to disarm, so Miller, Frank, and others argue that the government should step in. A policy aimed at curbing luxury shopping might involve higher marginal tax rates or, as a more targeted intervention, a consumption tax. As it becomes harder to afford a Rolex, people will devote more money to pleasures that really matter. Less waste, more happiness.

Now, only a philistine would deny Postrel’s point that some consumer preferences are aesthetic, even sensual. And only a rube would doubt that some people buy some luxury items to impress colleagues, competitors, spouses, and lovers. Perhaps we can divvy up the consumer world. An appreciation of beauty explains certain accessible and universal consumer pleasures—Postrel begins her book in Kabul after the Taliban fell, describing how the women there reveled in their freedom to possess burkas of different colors and to paint their nails—while signaling theory applies to the more extravagant purchases. A crimson burka? Aesthetics. A $30,000 watch? Signaling. Aristotle Onassis’s choice to upholster the bar stools in his yacht with whale foreskin? Definitely signaling.

I don’t think any of this is mistaken. But it is seriously incomplete. There is a further explanation for our love of such goods, which draws upon one of the most interesting ideas in the cognitive sciences: that humans are not primarily sensory creatures. Rather, we respond to what we believe are objects’ deeper properties, including their histories. Sensory properties are relevant and so is signaling, but the pleasure we get from the right sort of history explains much of the lure of luxury items—and of more mundane consumer items as well.

The debate over the psychology and politics of non-utilitarian goods isn’t just about the whims of millionaires, then. Everyone has an appetite for non-utilitarian things; most people own things that they don’t really need. It is worth thinking about why.

• • •

Postrel quotes James Twitchell, in Living it Up (2002), talking about a visit to the Beverly Hills Armani store with his college-aged daughter. He describes how customers would stroke the suits and how his daughter, originally skeptical, found herself entranced by the items. Twitchell sees the attraction of such goods as rooted in self-image and personal identity, but for Postrel it is simpler than that: “People pet Armani clothes because the fabrics feel so good. Those clothes attract us as visual, tactile creatures, not because they are ‘rich in meaning’ but because they are rich in pleasure.” Twitchell’s daughter is captivated “not so she can impress anyone else or feel affiliated with prestigious brands. She wants these luxuries because they are aesthetically appealing, because they are, in a word, beautiful.”

The pleasure of these objects does feel immediate and sensual. But Postrel is too quick to dismiss Twitchell’s claim about meaning. The shoppers know, after all, that they are stroking Armani suits. Would they react the same way if reaching into the discount rack at Marshalls offered the same sensory experience?

Probably not. If pleasure is triggered by the physical properties of what we are looking at or touching, then it shouldn’t matter what we think it is. But it does matter. To most, an Armani is worth more than a knockoff, even if the difference is invisible to the senses. Or consider the Rolex. In his book Spent: Sex, Evolution, and Consumer Behavior (2009), Miller points out that someone who doesn’t want to pay $30,000 for the Rolex President watch can go online and, for $1,200, buy a knockoff so finely made that only an expert can tell the difference. (He lists what they share: “a waterproof, shock-resistant Swiss ETA 25-jewel movement, a micro-laser-etched crown on the dial, a quad-wrapped 18k gold forged case, a scratchproof sapphire crystal, a 2.5x date magnifying viewer, unique serial and model numbers between the lugs, Luminox hour markers, a black Triplock O-ring seal on the winding crown tube, and a Rolex brand hologram sticker.”) No doubt Rolex loses some sales because people prefer the knockoff, but since the company is still in business, there are apparently enough shoppers who pay a premium of about $29,000 for an authenticity that makes no perceptible difference.

The inadequacy of the sham Rolex is an embarrassment to sensory theories, but it is also troubling for signaling explanations. If the fake Rolexes are indistinguishable from the real ones, they would work just as well if one’s goal is to impress others.

A defender of the signaling theory might say that we don’t just want to signal; we want to signal honestly. Or perhaps—though this stretches the signaling theory quite a bit—we like to signal to ourselves, to look at our wrists and know that we are big shots. Or maybe people just don’t believe that a sham Rolex will be as lasting and durable as a real one.

It is clear, though, that we can be influenced by the history of an object even when it has nothing to do with communicating status or with differences in quality. One example of this is the endowment effect—you come to value an object, such as a mug, more if you own it. You also value an object more if you purposefully chose it than if it was just handed to you. And you value it less if you had previously rejected it. You enjoy something to a greater degree if you had to work to get it, a phenomenon that may have serious implications for modern life: the Web has made it far easier to listen to a song or watch a movie or buy a book, and this arguably leads to a corresponding drop in the pleasure of listening, watching, or reading. Laboratory studies show that you like something more if you built it yourself—the “Ikea Effect.” Other studies find that people agree to pay more for a painting, and like it more, if they think it took a long time to paint.

Some of these effects might be the product of living in a consumer society, but this can’t be the whole story. For instance, the conclusion that individuals value an object less if they had previously rejected it does not apply only to market-savvy consumers. As my colleagues and I have found, it also applies to four-year-olds and capuchin monkeys. The same is true for the endowment effect, which exists in children, monkeys, and chimpanzees.

Thus the history of an object matters to the pleasure we get from it. And one intriguing sort of history concerns who has touched the object in the past. Consumers are more likely to buy something that has been touched or tried on by a physically attractive person. Celebrities, in particular, possess the “touch”—one reason why people want objects that have had some contact with them. In a 1996 auction, President John F. Kennedy’s golf clubs sold for $772,500, and a tape measure from the Kennedy household sold for $48,875. There have been eBay auctions for Barack Obama’s half-eaten breakfast and Britney Spears’s chewed-up bubble gum.

Indeed, charities can make money by auctioning off clothes worn by actors. One such charity used to offer a dry cleaning option before sending off the garments but stopped because few buyers took them up on it. People wanted the clothes as they were when the actors wore them, sweat and all. With fellow psychologists George Newman and Gil Diesendruck, I conducted a series of experiments exploring this celebrity-endowment phenomenon. We asked our subjects to name a living famous person they admired. (Answers included Barack Obama and George Clooney.) Then we asked how much they would pay for a specific object, such as a sweater, that was owned and used by this person. When our subjects were told that the object would be thoroughly sterilized before it got to them, they dropped their offers by a third.

Celebrity objects aren’t just a modern obsession. For centuries, Christians have revered objects said to be the bones of saints or fragments of the True Cross. As literary scholar Judith Pascoe has described, after Shakespeare’s death, fans cut down the trees around his house for lumber they claimed was sourced for their high-priced furniture. The trees surrounding Napoleon’s gravesite were also pulled apart and pieces brought home as souvenirs. Napoleon’s penis suffered a similar fate, reportedly removed by the priest who administered last rites.

My favorite contemporary example of this type is a collection gathered by the writer Jonathan Safran Foer. He started it when a friend sent him the top sheet of Isaac Bashevis Singer’s stack of unused typewriter paper, which inspired him to contact authors and request the blank pages they were going to write on next. He got pages from Richard Powers, Susan Sontag, Paul Auster, David Foster Wallace, Zadie Smith, John Updike, Joyce Carol Oates, and others. He even persuaded the director of the Freud Museum in London to hand over the top sheet from a stack of blank paper in Sigmund Freud’s desk. Foer’s unusual hobby illustrates powerfully how the most mundane objects accrue value through their histories.

We respond to what we believe are objects’ deeper properties, including their histories.

Then there are more personal cases. Think about your wedding ring or your child’s baby shoes. Such objects serve no practical purpose, they need not be beautiful in any sensory way, and they are useless as signals. Is anyone impressed by the fact that I own the original baby shoes of my two sons? World’s worst positional good!

Children experience the same boost in value in their attachments to teddy bears and security blankets. Psychologist Bruce Hood and I tested this by presenting children with a machine we described as a duplicating device. We then fooled the children into believing that we had made perfect copies of their attachment objects and asked them which they wanted to take home, the original or the duplicate. They tended to want the original.

The importance of history is clearest in cases of objects such as teddy bears and JFK’s golf clubs because these are unique items with special stories behind them. But it applies as well to kinds of items. After all, a brand is a way of explicitly marking an object’s distinctive history. The genius of marketing is crafting the story told about that history. Perhaps the objects are made in a special place or in a special way; they reflect family tradition; their production is a labor of love. They are in short supply; they are the oldest; they are the newest. Sometimes, the relevant aspect of history may be the connection to particular communities: these objects—but not others that might look, feel, and smell just like them—originate from a community to which one wishes to belong.

• • •

In my book How Pleasure Works (2010), I argue that this focus on history is universal and that it emerges early in development. It arises because of the importance we give to the deeper nature of things, what they are made of, where they come from. We are not empiricists, obsessed with appearance. Rather, the surfaces of things are significant largely because they reflect an object’s deeper nature. This mode of thought might be a biological adaptation, since what really matters—what is important to think about as you make your way through the world—isn’t what things look like but what they really are. So young children appreciate that a porcupine surgically modified to look like a cactus is nonetheless still a porcupine; that a drawing of cat doesn’t have to look like a cat; that two people might look identical, but one might be kind and the other cruel.

Our beliefs about the hidden nature of things influence the most seemingly sensory experiences, such as the taste of food and drink. Protein bars taste worse if they are described as containing “soy protein,” ice cream tastes better when labeled “high fat,” and cola is rated higher when drunk from a cup with a brand logo. Neuroimaging studies reveal that areas of the brain associated with pleasure are more active if you believe that you are drinking expensive wine. Perhaps the most troubling finding was reported in a working paper called “Can People Distinguish Pâté from Dog Food?” The answer is no: if you grind up a product called Canned Turkey & Chicken Formula for Puppies/Active Dogs in a food processor and garnish it with parsley, people cannot reliably distinguish it from pork liver pâté.

The depth of pleasure, and, in particular, the importance we give to history, applies to many domains, including food, artwork, and luxury goods. From this perspective, the lure of such goods is not limited to their utility or beauty or to our beliefs that possessing them will impress people. Part of the lure is that we believe these items have a certain sort of history. The pleasure we get from these objects is genuine and aesthetic, not mostly sensory.

This conclusion has implications for the charge that desiring such goods is disreputable or unreasonable. Miller, for instance, argues that consumer products fail as signaling devices—nobody really thinks I’m smarter because I bought a BMW or more noble because of my Prius—and he points out that there are better, more successful ways, to attract and impress people. But if we buy expensive things for reasons other than their signaling potential, this critique doesn’t apply.

What about the claim that these objects are positional goods, leading to a wasteful arms race? Economist Richard Layard argues that contemporary research—the “new science of happiness”—shows that our happiness is exquisitely sensitive to relative status. If my neighbor owns a fancy car and I want one but don’t have it, this will make her happy and me sad. Layard suggests that my misery will be greater than her happiness, so there is a net loss when she makes her purchase. Layard sees envy as a form of pollution created by her possessions, and proposes that it be regulated for much the same reason that environmental pollution is: to prevent actors from creating net losses at benefit to themselves.

Layard is surely right about the relationship between status and happiness; as H. L. Mencken put it, “A wealthy man is one who earns $100 more than his wife’s sister’s husband.” But happiness research is a fast-moving and contentious field, and many of Layard’s assumptions about the corrosive nature of economic disparity have not held up. As Will Wilkinson points out, the available data suggest that citizens of countries with liberal free-market economies are among the most satisfied, which explains why the United States, which exemplifies exactly the sort of amok consumerism that Layard and others worry about, is one of the happiest nations on Earth. Wilkinson argues that we feel this happiness because such societies excel at creating multiple status hierarchies—“Surfer dudes don’t compete with Star Trek geeks for status”—many of which have nothing to do with money.

And then there is the psychological data suggesting that status might not be the whole story. If I buy a watch to impress my friends, one can worry about the cost of envy. But what if I buy it because it gives me pleasure? That one child enjoys a teddy bear doesn’t seem to detract from his playmate’s enjoyment of his own. That no one watches me eat mom’s cooking doesn’t make it taste any less wonderful. Some goods, including luxury goods, are valued for properties that have nothing to do with what other people think, so worries about arms races just don’t apply.

Frank ends his book Falling Behind (2007) by discussing a 200 percent consumption tax on top earners. What would be lost, he wonders. What would these people be unable to buy? He answers by describing a trip he took to New York City, where he looked at top-of-the-line mechanical watches, selling for thousands of dollars. These pose a problem, though, because people like to buy several of them, but they stop working if you don’t use them for a few days. “One could hardly expect men of means to tolerate such a problem for long,” Layard writes.

And sure enough, there is now a ready solution. On display in the Asprey & Garrard showrooms on Fifth Avenue in Manhattan, discerning buyers will find a finely tooled calfskin-leather-covered box with a golden clasp, whose doors open to reveal six mechanical wrists that rotate just often enough to keep the mechanical wristwatches they hold running smoothly. The price? Only $5,700.

It is hardly a sacrifice, Frank argues, if people have to give up on such things.

But it is an interesting example. This device doesn’t look like a status symbol; presumably a man of means isn’t going to walk around with it, showing it off. It seems more like a whimsical aesthetic object, valuable in part because of our appreciation of the craft and intelligence that went into its creation, and in part just because it is so audacious and superfluous and silly. In fact, one can compare this device to another, much more expensive kind of object that a rich person is likely to possess: anyone who spends almost $6,000 on a watch winder is probably spending many times more than this on art.

Like many luxury goods, art is not valued for its practical utility. And, like many luxury goods, artworks get their meaning and value in light of their histories—who created them, when they were made, and what the artist intended. This is clearest for modern pieces: objects such as a urinal or an unmade bed can be transformed into artwork if created and displayed in the right way. But origins matter even for more traditional art. When The Supper at Emmaus was thought to have been painted by Vermeer, it was priceless; when it was discovered to be the work of forger Han van Meegeren, it became a relatively worthless curiosity. Its appearance didn’t change, just its history, but people no longer wanted to look at it. If you were to discover that your Rolex is an inexpensive duplicate, you would experience the same effect.

• • •

Anthropologist Clifford Geertz notes that, during the Cold War, the term “anti-anti-communist” was used to describe those who argued against the obsession with the Soviet threat. This isn’t the same as pro-communism—the logic of the double negative doesn’t hold: you can be against Joseph McCarthy without being in favor of Josef Stalin.

I am anti-anti-luxury goods. The arguments against them are based on an incomplete theory of psychology, one that misses the depth of the pleasures they provide. Keep in mind as well that this isn’t just about the purchases of the über-rich. Few people will ever own a Rolex or a Vermeer, but we are all sensitive to the value of history, and most of us possess at least some things that we wouldn’t trade for perfect duplicates. These objects have value beyond their practical utility.

There might be better arguments against the pursuit of such goods. The moralist will complain that they are superficial, that an obsession with consumer products corrodes the soul. The utilitarian will worry that the money spent on these goods could be better spent elsewhere and might not be impressed with the luxury-goods-as-art argument. Indeed, Peter Singer uses donations to art museums as an example of wasteful and self-indulgent charity, suggesting that people should instead give money to help cure trachoma, a preventable disease that slowly leads to blindness in children in developing countries.

But the moralist and the utilitarian can’t ignore the pleasure we get from luxury goods. The moralist should recognize that our appreciation of them is psychologically on par with other, more respected, human wants. The utilitarian should acknowledge that they are not pollution; they add to the value of our lives. Even if we ultimately choose to discourage the production and purchase of such goods—and maybe we should—we should acknowledge what would be lost.

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But what is the source/channel of pleasure in case of a Rolex compared to e.g. a very tasty meal. Combination of signaling and self-praisal? Uniqueness/hand-craftmanship (partly signaling as well)? You get some feedback in your brain from the combination of sugar/fat etc. What is the trigger and what are the receptors in case of a Rolex? Are these different kind of pleasures?

A great meal is far more affordable and a greater pleasure, but the Rolex lasts.  The amazing thing about Rolex is that the Company has been able to increase its prices to just about keep even with inflation.  Not many companies, even luxury companies, can make that claim.   You could buy a new Rolex Submariner in 1983 for around $1,200.  Now the price is over $7,000.  The technology has not changed that much.  The thing about Rolex is that its one of the few status symbols a man can wear and still fit into a conservative business environment.  A flashy diamong ring or way, but a Rolex is still permissible.  Women have far more options to convey wealth - an expensive purse, jewelry, expensive shoes, etc.

This is really about whether or not you value experiences more than things.

The history of an object absolutely matters relative to the pleasure we take in it. The object doesn't have to be a luxury one, however, in order for its history to add to its allure. See:

I don't doubt that the watch enthusiast derives pleasure from the history and tradition of the venerable watchmaker that produced their timepiece. However, I don't think this neccessarily redeems luxury objects, but rather throws into question our priorities and value system. Wouldn't it be preferrable if the watch enthusiast instead derived pleasure spending time and money on charitable endeavors and cultivating relationships with friends and family?

"The utilitarian should acknowledge that they are not pollution; they add to the value of our lives."

I think the utilitarian would not object to the notion that a $30,000 watch provides some marginal utility to the wearer, but rather that the utility is small compared to say, feeding a village of 100 people for a year. 

I also wonder if there's any proof in the pudding. Do people actually derive long lasting pleasure from luxury objects? I'm sure there are folks out there who treasure their grandfather's Rolex. Perhaps there's pleasure in buing an heirloom object hoping that future generations will treasure it. However, I have to think most people showing up at the Mercedes dealership or Armani store are just strides on the hedonic treadmill.

Wasn't it Adorno who wrote that in a post-Fordist society, objects would assume fetishistic value that went beyond usefulness?  So a Rolex watch is not a watch, but a fetish, an object that has meaning--it means success, wealth, the sexiness that comes with wealth.  On the other hand, some watches become fetishes because of other reasons---I have a Universiy of Iowa watch in which the Hawkeye logo goes around the face.  It has fetishistic meaning for me because that's where I went to school.  That's what's great about objects--one man's fetish is merely another man's watch

The argument here uses the presumed differences between social and psychological reasons for ownership (or, anotehr way of saying it, between Marx's exchange value and use value of an object).  But the argument might not be sufficienlty psychological.  Even if no one can read the signal, I may still experience pleasure because of my superior taste, and that pleasure is about envy rather than asthetics.  Also, is the US really one of the happiest places?

Professor Bloom suggests that our attraction to luxury goods is similar to or based on our attraction to other objects that have a desirable history or connection to things we value. That may well be true. However, the critics among the commenters suggest that luxury goods should nonetheless be avoided. Is it possible that we could change our values so that we no long see such histories or connections as being so important? I think that Bloom would argue that we’ll never get over such values, since they are the same as the ones that make us cling to our baby’s shoes or to great works of art.
But is that necessarily so? In other domains, people have certainly changed their attitudes towards social groups that used to be denigrated. It is no longer acceptable to say that women can’t hold public office or that some ethnic groups are stupid. Yet for many millennia, such opinions were held by nearly everyone. Traditional values can and do change, in part through explicit decisions that some values are wrong and should be rejected.
Perhaps some day, people will look down upon those who sport Coach handbags and Rolex watches. Actually, I do already, and so do a number of the politically correct class. But once political correctness becomes accepted wisdom, it’s possible that people will give up (some of) their luxury goods. If they did so, they might spend their resources on things that research suggests lead to greater satisfaction, such as spending time with their families, giving to others, or having interesting experiences. I don’t think you can ever eliminate the love of luxury any more than you can ever eliminate prejudice or revenge, but when society changes its stated values, many people’s values do eventually move in that direction. In such a case, we might move away from the love of luxury Bloom describes to something closer to the world the critics desire.

The elaborate justifications of luxury are pretty silly because ultimately there is one simple test: do people enjoy these purchases anonymously, or is it important for them to make sure others know about them? Are the purchases kept in a private place where nobody but the owner sees them, or are the put on display?
The extent to which displaying, sharing, and flaunting enters into the enjoyment pretty much answers the question of whether it is about status or not.


I'm sure there are elements of truth in Bloom's argument, and I think it's a worthwhile endeavor to fully flesh the range of consumer motivations,  but when you stack up motivations for buying luxury goods the ostentation factor is almost certainly the primary motivator. The decision to buy a Ford or BMW isn't driven by the firms respective histories. It's driven by what people will think of you as the driver.

Of course, someone is paid for said luxury item (at least when new) creating generally high value employment and income for many which in turn leads to consumption, blah blah blah, so not necessarily a "wasteful" expenditure.  In other words, no Rolexes and more machine made Timex's probably equals less employment with whatever multipiler effect that has. 
Perhaps apocryphal, but it is said that there was a meeting between various senior corporate executives and Larry Summers during the financial crisis some time after the GM/Ford/Chrysler CEOs each flew to DC on their own corporate jets looking for money.  The execs were pointing out that subsequent administration demonization of anyone owning/buying/flying a corporate jet was helping to destroy relatively high paying manufacturing jobs in the US (not to mention various support service positions) at a time when more rather than fewer jobs were needed and couldn't Larry somehow get that across to the administration.  The reply, with a smile, was that of course it was bad policy, but it was good politics.  
Which is often what discussions of luxury items comes down to - the politics of jealousy. 

The rejoinder is that not all jobs are equal. Some provide significant benefits to society at large, while others do not. Employing a 100 artisans to create a bauble for a rich person is probably iniefficient from a societal prospective. Those people could instead be employed doing more beneficial things, perhaps driving scientific innovation, building homes, or improving infrastructure. In this way luxury goods constitue a misallocation of labor resources; one that provide a small benefit to the rich at the cost of larger benefits to society.

This completely trivializes a complex human interaction, though it has taken root as a very common and productive conservative meme. In general the smaller the human socal unit, the more powerful its equalizing mechanisms, its egalitarian impulses. The social unit can handle status and unequal distribution of resources, but only within limits. Some societies have very strict practices which serve to level out individual resource and status accumulations, in fact I'd offer up the observation that that the levelling-out impulse is virtually equal and opposite to the status and resource-accumulating impulse, and humans spend almost as much energy clawing each other down as they do building themselves up... maybe the net is the same.

In the late 19th century, industrial magnates buit huge mansions in Newport. The Rockefellers and the Carnegies were trying to upstage the old money, who lived in small houses on land given to them by the King. The Rockefellers, no longer nouveau riche, live now more like their old neighbors did. A few of the old rich, as powerful as ever, still live quietly in the same old houses, while the mansions have changed ownership more than once.
Las Vegas is not Versailles. Bling is not virture. Pedantry is not scholarship. Mathematicians take pleasure in numbers as much as libertines take pleasure in sex. The author takes great pleasure in his discovery. It's a pity it isn't one.

I for one wouldn't mind owning a huge mansion.  It would give me a place to store all my other luxuries.

Economics is for the most part applied moral philosophy, intersecting squarely on the term value. What, exactly, is valuable, meaning, what is important to me? 

I own little of status value but consider my most valuable items are thi9ngs that came to me from people I loved personally. I have two small silver vases, about three inches high. I know that my grandfather gave them to my grandmother - who I loved very much.
I have some of my father's baby hair that my other grandmother clearly treasured. Sensibly I thi9nk it silly, but am now 90 and haven't ever parted with it.
I have a book given to my by my mther for my 11th birthday - my most valuable book.
History is important but to me a history that includes a celebrity is meaningless. Most of the people I have long loved are dead. I treasure the history they left in objects.
Glen McBride

I don't see heirlooms as luxuries, but as heart treasures, and I congratulate you (and maybe envy a little bit) that you have those things.  I also congratulate you on reaching ninety.  

 this is not very convincing argument: "as Will Wilkinson points out, the available data suggest that citizens of countries with liberal free-market economies are among the most satisfied, which explains why the United States, which exemplifies exactly the sort of amok consumerism that Layard and others worry about, is one of the happiest nations on Earth."
What about other countries in TOP 20, they are not really what you would call example of consumer-frenzy society like US. It is, at least, very questionnable to put such direct link among those two things.
(1. Switzerland (7.587) 2. Iceland (7.561) 3. Denmark (7.527) 4. Norway (7.522) 5. Canada (7.427) 6. Finland (7.406) 7. Netherlands (7.378) 8. Sweden (7.364) 9. New Zealand (7.286) 10. Australia (7.284) 11. Israel (7.278) 12. Costa Rica (7.226) 13. Austria (7.200) 14. Mexico (7.187) 15. United States (7.119) 16. Brazil (6.983) 17. Luxembourg (6.946) 18. Ireland (6.940) 19. Belgium (6.937) 20. United Arab Emirates (6.90
src )

What makes the most sense in enjoying luxury item lies simply in admiration of an object for various reasons.  If it is beautiful in the eye of the beholder then it is a joy to own that object.  If that object was created by someone whose talent dazzles then what an homage to that exceptional person to wish to own their work and to be reminded daily of it's brilliance.  Some objects are so beautifully crafted that it is a joy to celebrate that skill by owning the object, using it, caring for it, preserving it to honor what we admire, what is special.  All these things turn our thought back to the person or persons who dedicated the time, effort, and rare skills that we may never possess but which we hold in consciousness as set apart from the mundane.  We learn about the makers, the history, the processes.  This widens our mental horizons and exercises gratitude for beauty in objects and those who orginated that beauty.  In a small world it is all about who can buy what for a price.  Then it is sad selfish consumerism.  In larger thought it represents a world of appreciation. 

Good question you bring up - does the joy of luxury fade? The answer, I believe, is that the pleasure you get from high quality luxury goods will diminishe over time through the universal human process of adaptation.  It's why immigrants to Michigan from California are indeed less satisfied at first but slowly adapt to their original level of happiness. Luxury goods will at first provide incremental happiness due to the appreciation of higher quality craftsmanship (a story), but it's effect will fade over time.
More generally, I greatly appreciate the argument made in this article that there is intrinsic value in perceived value of products and brands beyond signalling, but I don't believe that it lives beyond the framework of evolutionary psychology as Miller and Frank describe. We like quality and story and history because we've adapted to applaud the skilled as well as the sincere, and avoid the dull as well as the frauds. It might be not be as directly connected to signalling and handicaping but it's still biologial adaptation at work.
To rid ourselves of luxury goods, in the extreme, we would certainly lose functional value (if you are someone accustomed to the plushness of Prada and smoothness of Rolex at least), but I tend to agree with the anti-luxury sentiment: these positional goods cause greater harm to happiness than good.

When Bloom, et al, speak of "we,"our,"Us," etc., do they include themselves in such 1st-person plurals (as grammatically they do), or or they merely using the "editorial we" to comment on the hoi polloi?

Still, bottom line, isn't it just plain evil to spend thousands of dollars on a watch when children a few blocks away go to bed hungry?

Of course it's evil to spend thousands on a watch when children anywhere to to be hungry.  In fact it's evil to be well fed and for my children to be well fed.

The article pointed out that luxuries are often for status (called face where I live).  Even if we see how silly it is, we still have to put up a certain minimum just to get things done with others and not have them ignore you.  That Rolex watch, though, is too much and can be counterproductive -- it is at least with me -- I think about foolish pride rather than success through wisdom.

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