Status Symbols

Imagine you have some leather, or leatherlike material. Not too expensive in small quantities. You give this leatherlike material to a person living in a third world country (could even be a child), and you ask him to produce a shoe from it. In fact you can have an entire bank of these workers churning out shoes - lowering costs.

How much will this shoe cost? The production costs are low, so you assume its worth very little indeed. Now lets add something to our shoe. Lets add the insignia for a very prestigious and expensive brand. Lets add the Alpaca Symbol to the shoe. It is now no longer a piece of cheap shoe-shaped material produced by kiddies in a third-world country, now its Alpaca Brand shoe! And therefore worth 50-150 euros depending on what 'magical technology' it's using.

So the difference between "5 euro shoe you bought at a flea market" and "150 euro shoe which you bought at a specialty store" isn't that one was technologically crafted, or hand made in a traditional method by some rare people. Its simply the brand. When globalisation was still spreading its evil tentacles around the globe, large companies would buy off smaller 'industries' and set them to work producing their goods.


In fact, the reason we'd buy "Alpaca Brand" instead of any other brand is because it's expensive. And its expensive because people buy it because it's expensive. If AlpacaBrand reduced its prices, it would lose its 'specialness' and therefore stop being so wanted. The reason people buy it is simply because not everyone can get it. You're paying for the 'status' of having something not everyone can have.


Lets take another example. You have a yellow-coloured substance which comes from the ground. It is chemically slightly interesting, it's not very reactive and it has a good conductivity. However we wear it on our fingers, around our necks. And the only reason that we do so is because its rare. We're not wearing it because we like yellow (we could buy paint for that), we're not wearing it for the conductivity or to bombard it with alpha particles. We do so because we have an object that few other people can afford.


To give a brilliant example of this phenomenon. Aluminium. Once upon a time it was very very hard to produce, and was therefore rare. The apex of the Washington monument has Alumninium in it, so does the statue on the tip of Piccadilly circus. It wasn't chosen because of its amazing scientific properties - it was chosen because it was expensive.


Then a cheap and easy way of obtaining this magical substance was discovered - and now we make drinking cans from it. We no longer show it off.

Now does this make any sense? We like to show off our superiority by wasting money and resources to get items which are either useless, or as useful as an exact same item without the branding. But we just feel the need to show off our superiority by showing our very poor buying habits.

And we wonder why we have poor people and the economy is unfair.

ADDED: I have stumbled upon a technical word for this. Velben Goods.


The Llama