Veblen is Wrong: Towards the New Aspiration Economy

Blenheim Forge knives. Circular Sarah Wiener restaurant group. Trunk House. Sandquist. Meditation. Hoodie. Oatly. No-meat diet. Buzz Rickson MA-1. No-alcoholic spirits. Bauhaus. Busyness. Kalsarikänni. Privacy. CBD. New moon in Aquarius. Likes and followers. Non-GMO. Digital detox. Tbilisi fashion week. Greta Thunberg. Kintsugi. Intermittent fasting. Micro-influence.

This is the post-Veblen aspiration economy.

In Veblen’s view, status comes only from display of wealth through consumption. But status today is not expressed in economic terms only. Rather, it’s linked to culture, wellness, ethics, spirituality, social influence, and environmentalism. Greta Thunberg, a teenager whose cause and moral conviction puts the rest of us to shame, enjoys elite status.

Inexpensive goods and activities, like earthing, no-meat diet or meditation, are modern status symbols. When consumers buy non-GMO and ask questions about where something was made and by who, they signal their status through their wokeness. Wealth and economic class are thus replaced by one’s worth and values.

Modern class is anchored not in accumulation and display of possessions or even experiences, but of knowledge. The knowledge of art, design, architecture, fashion, music and of how and where things are made. It’s rooted in the knowledge of obscure locations offering transformative travel experiences. It’s about knowing the nutritional value of everything we eat, and of carbon footprint-value of everything we wear, use, and do. It is also rooted in being in the know: in consumers’ ability to decode subtle brand signals or learn about vintage and streetwear drops. There’s also status in membership in a community, or in the ability to attract and command attention on social media by accumulating likes and followers.

Traditional luxury brands, once reliable signals of class and status, now can be rented and resold. Anyone can walk around in a Gucci outfit. This upends the notion of a Veblen good. A Veblen good is something whose desirability increases with price. But an artisanal knife can today be deemed more desirable than a Louis Vuitton bag, and eating in zero-waste restaurants signals status more than staying in a Four Seasons hotel. Just look at Financial Times’ How to Spend It, also known as “the shopping list for the 1 percent”: it’s full of features on Makers, slow travel, yule logs, and admiration for limited-edition, low-tech displays of human originality and creativity.

Modern status has very little to do with money. Aspiration is decoupled from consumption. Wearing a new fur coat was once a signal of the wealth; now it’s a signal of wastefulness and cluelessness. Desirability is decoupled from price, and coupled with knowledge, a story, belonging, and transformative potential to make us better humans. Fake fur is cheap, but it distinguishes the person wearing it and lends them the elite status. Modern aspirants are environmentalists, influencers, fans, sneakerheads, hobbyists, and collectors. Not the richest, but the most plugged-in people around.

The new aspiration economy changes the role and meaning of brands. Brands are valued differently: not as much as they can give their consumers economic status, but if they lend the social, cultural, and environmental one. This is achieved through brand storytelling. Stories give products desirability, and when buying products, modern aspirants are buying themselves a role in the cultural, social, and environmental narratives. Any brand can become an aspirational brand if it invests in “conspicuous production:” a display of its social, environmental, and cultural values in the way its goods and services are sourced, produced, distributed and marketed.

Modern aspiration asks for new concepts. What consumers value, are willing to pay money and attention to, and how they distinguish themselves from others and convey their status is different than it was a hundred, or even ten years ago. When the capital is different, so is the trade.