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Business News/ Mint-lounge / Mint-on-sunday/  The theory of the stupid class
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The theory of the stupid class

That people often spend beyond their means has been a topic of economic scholarship for decades. But that doesn't automatically make them a new class of poor

If the quest for luxury is making basic needs hard to meet, some things need reconsidering. Photo: iStockPremium
If the quest for luxury is making basic needs hard to meet, some things need reconsidering. Photo: iStock

In June 2016, Buzzfeed India published a viral article about “millennials who are broke, hungry, but on trend", which now has been expanded and published as a book. The article has garnered a lot of criticism, but also some praise for being an empathetic account of many young people.

Who Me, Poor? somehow, is much worse than the article, because it is 189 pages about how deeply disturbing it is for youth to cut back on expenses to advance in their careers or social life. It is a bit too far-fetched to complain about going broke and not having food to eat because one doesn’t know how to cook, or because you choose not to order a dabba service for reasons like “I get bored with the food". It isn’t reasonable to travel in an Uber or an Ola to and from work (“which is around Rs350 one way at the minimum"), go out every weekend, and then wonder how one is broke halfway through the month.

These are just a few of the non sequitur fallacies (that is, the conclusion does not follow from the antecedents) that the book is characterized by. Another instance is when the author says, “Through the credit card, connectivity and confidence are acquired," because in a PRICE survey, three-fourths of the credit card users claimed having high confidence. The survey actually only points out that those who do acquire credit cards (which is a very small minority at 7.4 %) tend to be more optimistic about their finances, and confident about the stability of their household incomes. This in no way translates to overall confidence.

But, if we take out the problematic aspects of the book and focus on the issue at hand—consumption in a very flamboyant manner, to “fit in" with those who are at a better position than us—the subject is not novel at all. In fact, in 1899, Thorstein Veblen, a sociologist and economist, wrote his treatise The Theory of the Leisure Class. The term conspicuous consumption was first introduced in this, describing the expenditure on goods (and services) to ostentatiously display their wealth rather than, as classical economists would have you believe, to satisfy the needs of the consumer.

Thus, when one buys branded clothes or art gallery paintings, one is signalling one’s wealth. This kind of expenditure is found in all kinds of cultures, from feudal Europe to Indian maharajas. While consuming impetuously is something the upper classes can obviously afford, it is, according to Veblen “the economic expression of their superior rank" (Veblen, 1899; p.p.1). Egyptian pharaohs may display wealth with golden thrones, elaborate artworks, and giant pyramids, while Ambanis may build Antilas, but they’d still have money left over for the next couple of generations.

Evolutionary psychologists explain this using the signalling theory. The argument is that organisms communicate their qualities (e.g., health, wealth, status, etc.) through signals. These signals convey information about the organism to others—of the same or of other species. Organisms rely on such signals to realize much of their reproductive and survival success. However, some of these signals are easy to fake. To counter this, certain credible signals have evolved. Zahavi, an Israeli biologist, has proposed that high-quality members of a species who could afford to waste a lot of time, energy, and resources, would do so. Thus, this cost handicap would ensure that the signal is reliable, hard to fake, and therefore, accurately represents the sender’s quality.

The peacock’s tail is an excellent example of this. It is large, symmetrical, and colourful. But at the same time, it is costly. That is, it reduces the chances of survival, especially in case of an attack from a predator. The maintenance of its plumage is also expensive for the peacock. In buying a Porsche, one might encounter a similar trade-off. A Porsche Carrera GT has “very little cargo capacity, has only two seats, gets terrible gas mileage, and is frightfully expensive to repair", and yet, those who shell out hundreds of thousands of dollars on it are not deterred by what would, to a “rational" consumer, be poor specifications. Conspicuous consumption, thus, emulates other behavioural and morphological traits found throughout the animal kingdom (Sundie et al, 2011).

But it’s not just those who are wealthy who spend like that, is it? We all do. In the same book, Veblen talks about pecuniary emulation, that is, how those who, despite not being able to afford such extravagant displays of wealth, would still do so to appear as a member of the upper class. This has been a topic of discussion of books like Trading Up and Falling Behind. In Trading Up, the authors talk about “democratization of luxury" across a variety of consumer products—from coffee to toys and spas. This is different from old luxury, which only the really rich could afford. The “new luxury" makes them available in many forms and price levels. Luxury products are, thus, now accessible to many middle class Americans, the authors of these books argue.

The implication is that even if people at all levels aspire to and do consume luxurious goods, if you cannot put food in your mouth at the end of it, what is the point? Scraping off on vada pavs, or starving yourself for half the month because you do not want to take public transport sounds more like an imminent eating disorder than a promotion at work.

While the book Who Me, Poor? is just another poor little rich person trope turned into a non-fiction book, what the author definitely lacks is the understanding that these urban poor are the exceptions, and not the rule. This is not to say it doesn’t warrant talking about, but the depiction of the idea is extremely problematic. In the last section of the book, she enlists certain points to promote financial literacy. While the points are very naïve, it could definitely help the book’s target audience—those who feel completely lost, and those who are recent migrants from small urban settlements to large cities, who do not know how to manage their finances. It is definitely a good idea to be conscious of money matters, if you find yourself in debt month-after-month. However, if you played poker and lost multiple months worth of salary due to the stakes involved, you have an addiction problem more than a problem of financial illiteracy.

My takeaway from this book is that instead of arguing for their status as “the urban poor" who also should not be ignored when labelled as “worthy of aid", these signs are indicative of other issues. There seems to be, for example, a serious bullying problem in corporate India: if one cannot afford to go for team outings, then perhaps later, one is not invited for other events, and the rest of one’s team behaves differently. And if men think they owe their girlfriends splurges because “no boyfriend can ask his girl to pay", you are simply a misogynist (at the same time, the restaurant industry does sometimes perpetuate gender stereotypes by promoting casual sexism in something as elusive as the placement of the bill or credit card machine after a meal).

I know I’m shouting into a void when I say this, but if for you “comfort and luxury are more important", and you choose to forgo basic necessities, you’re not poor. This is not to say that the accompanying stress isn’t real, but it is manageable. This cycle is also relatively easy to break through small steps.

So, dear “20-something metro-dwellers" who are giving up square meals for extravagant sandwiches and coffees at expensive cafes, while your consumption is conspicuous to climb up the social ladder, or to signal your superior quality to others, it is worth remembering remember that there are those who are genuinely poor. And they do not have the resources to, as you call it, “invest in fitting in".

While I did come here to explain Caesar, I can’t help but condemn him.

Arathy Puthillam is a research assistant at the department of psychology, Monk Prayogshala, a not-for-profit research organization based in Mumbai.

Comments are welcome at feedback@livemint.com

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Published: 23 Sep 2017, 11:48 PM IST
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