There’s a popular view doing the rounds about how the rich are okay spending so much at a time when those financially dependent on them are either losing jobs or not getting pay hikes.
Conspicuous consumption of the rich is not a problem per se. HNIs and business owners are entitled to spend their hard-earned money whichever way they like. Not everyone should be expected to be frugal and very wealthy like, say, Warren Buffett or Narayana Murthy. However, the issue is about the time, context and semblance. It’s about conspicuous consumption – otherwise appreciated and welcomed for economic growth – when employees or businesses are going through an economically tough time.
It is about the affluent business class being conscious about the timing and context of such spending in line with their business conditions. Failure to do so at an optical or strategic level – irrespective of ethics – can be damaging in a world where perception matters. The images of Vijay ‘King of Good Times’ Mallya in London and the fate of Kingfisher Airlines members of staff are still jarring.
In Hindu philosophy, there is the concept of ‘Desh, Kaal, Patra’ – ‘Place, time, object’. It urges one to act according to one’s location in space and time, and qualities. We live in the time of social media proliferation, resulting in amplified public scrutiny, where the rich and famous are bound to be judged for their conduct.
This is not just about being morally tone-deaf, but about it being bad business branding strategy. Besides, at a time when companies are cost-cutting and rationalising, promoters, founders or top management flaunting their wealth is disconsonant.To get the timing right, it’s essential to understand conspicuous consumption first. In his classic 1899 work, The Theory of the Leisure Class, Thorstein Veblen introduced the concept of conspicuous consumption.Veblen argued that in a society stratified by class, the leisure class – those who do not need to work for a living – uses visible consumption to demonstrate their social position and to differentiate themselves from the working class. This behaviour is driven by pecuniary emulation, where individuals aspire to the lifestyles of those above them in the social hierarchy, often leading to wasteful spending and a focus on status rather than substance.
Wasteful consumption is not the only side-effect. In his 2004 book, Status Anxiety, Alain de Botton explored how people seek status through material goods, and the resulting anxiety when they fail to achieve it.
Conspicuous consumption can also sometimes be a symptom of larger issues related to business practices of such consumers. For instance, in 2022, Byju’s roped in Lionel Messi as its global brand ambassador one month after the company announced layoffs of close to 2,500 employees. In less than two years, the company and its founder are fighting legal battles to stave off bankruptcy.
At a time when companies are spending big on reputation management, ensuring that the overt consumption of founders or top management is not tangential to the company’s business practices would result in the right messaging. If leadership means to lead by example, affluent leaders are setting aspirational lifestyle targets for their employees to emulate – at a time when most of them have limited means of achieving them if they continue to remain so employed.
For the affluent, this does not mean the need to rationalise consumption, or to not live according to one’s means. De Botton reveals many ingenious ways in which individuals can overcome their status anxieties by reassessing values, appreciating art, focusing on inner virtues, exploring alternative lifestyles and cultivating humour.
However, the solution can be even simpler – inconspicuous consumption. Consuming in private during economically challenging times (for others) may not be such a bad idea. Maybe it’s time to bring it back into fashion.