I have always liked economics. I’ve always been drawn to the way in which its concepts could be applied anywhere. Economics as a social science “aims to describe the factors that determine the production, distribution, and consumption of goods and services.” In practice, however, its theories can and have been applied throughout each sector of society.

Even in our everyday lives, we make choices based on laws of behavior that most of us are probably unaware of. Everything is governed by economic theory in one way or the other.

The law of diminishing marginal utility states that, with all things held constant, as a person consumes more of a product, there is a decline in the additional satisfaction a person derives from consuming one additional unit of production (or marginal utility). Continual consumption will at some point result in negative incremental satisfaction. The most typical example used to demonstrate this law is the concept of an all-you-can-eat buffet, wherein the more plates you eat, the less satisfied you become by the meal, until you eventually make yourself sick.

I’ve been thinking a lot about the concept of marginal utility lately in regards to sex. And love.

INITIAL CONSUMPTION: FRIENDS WITH BENEFITS
Marginal Satisfaction: 8
TOTAL SATISFACTION: 8

Looking back, there is a good chance I romanticize the night that started things off. There was a party, mostly a group of us sitting around playing cards, drinking whatever we had brought, and a lot of smoking. There was some baked weed concoction passing around. We laid in bed and traded some drunken small talk, cuddling led to kisses, and kisses led to sex. And that was it.

The next time I saw him, we went for drinks and fucked in the backseat of his car on the way home. We talked about making the sex exclusive that night. As is the way of commitment phobic 22 year-olds, we assured each other that we would not catch feelings. Things fizzled two months later when his presumed ex (to be fair, my presumption) visited and we agreed it was best he not see me for a while.

I must have cried a lot in this period. Or was just righteously mad. I can’t remember which it was, or the combination that carried me over months of loneliness. Other things that happened in this period: buying my first car on my own; being steadily belittled at the most meaningless of jobs; drinking, a lot; falling into a hole of depression and anxiety I hadn’t realized I had started digging.

When he did reach out I was sure that it was him (or something like him) that I needed to make things better.

ADDITIONAL CONSUMPTION: DATING

Marginal Satisfaction: 10

Total Satisfaction:18

There were apologies and notes of me deserving more and him wanting to be more. There were his promises of trying to give all that I wanted, but slowly. And my promises of not wanting much. There were dates, and sex in beds, and introductions to friends. Slowly I started feeling important or at least wanting to feel important. I broke my promise first and asked for too much too soon. We decided it was best we stay friends.

I learnt about the benefits of break up sex that afternoon.

ADDITIONAL CONSUMPTION: OFF AND ON FWB

Marginal Satisfaction: 6
Total Satisfaction: 24

I had previously spent a long portion of my life lying to the people around me, and most of all, myself. Sometimes, it’s easy to slip back into the lying — like slipping on that old, worn hoodie that’s seen better days — lying that had become second nature at one point will always feel like a second skin. The best and worst parts of getting closer to people is them recognizing the lies you tell before you recognize them in yourself.

At this point in my life I was struggling with the lie I wanted desperately to believe: that I was not in love, and that I was okay with the casual nature of our relationship. We went back and forth between sleeping together and being friends, or close approximations of these.

Utility is completely subjective. In logic-driven fields of study like economics, the subjective nature of satisfaction never made much sense to me. Utility can only increase for an individual if that person considers his state of affairs improved. That said, utility is pretty difficult to measure as well. In fact, outside of theoretical discussion, utility cannot be measured among different people; it can only be said to be higher or lower from the viewpoint of an individual.

There was a moment a couple days ago: I looked in the mirror at work, adjusted my glasses and realized I didn’t quite recognize the person looking back at me. I knew it was me, but something about me looked older, more mature, a little hardened. My cheeks were slimmer, but not the slimness of my teenage years when the milk was still fresh in my face. My posture was straighter, my stance more deliberate, less casual. Can utility be subjective even to yourself?

Can your past-self derive greater satisfaction from a situation than your current-self? It would certainly seem so.

ADDITIONAL CONSUMPTION: DATING
(OR SOMETHING LIKE IT)

Marginal Satisfaction: 5
Total Satisfaction: 29

There were no more conversations about our status at this point. We had wound up sleeping together one day and didn’t stop. There were sleep overs now, and birthday celebrations. There were introductions to parents, family breakfasts, and Valentine’s Day dinners. There were days and weekends spent in bed.

There were also anxiety attacks and accusations. There were tantrums thrown and in one particularly embarrassing night over 12 phone calls made one after the other, and none answered. There was social media stalking and interrogations of friends. In the lowest moment, I was hunched over his phone while he slept, succumbing to reading his messages instead of leaving his house. The night we broke up he told me he loved me. He told me he could marry me. He cried against my stomach as he hugged me tight.

When I drove off, my glasses were frosted with tears, my windshield from night dew. I scraped my car against the sidewalk in front of his neighbor’s house and drove to work the next morning with a flat tyre I knew nothing about.

Sometimes, when faced with all you’ve asked for, you realize that its worth is severely diminished. An alternate definition: “the rise in the supply of a good leads to a decline in the marginal utility of the unit.”

ADDITIONAL CONSUMPTION: FUCKING
Marginal Satisfaction:1

Total Satisfaction: 30

A birthday wish turned into sex that just continued for what felt like months, but was more like a sequence of days. We broke up, had sex, and broke up again. We didn’t speak for months. Until we did, and had sex the first time we saw each other.

I found myself emphatically telling him that I would not beg him to love me, that I would not beg him to be with me, and then begging him to do both. I think we must’ve hated each other then.

Or at least he hated me. I never stopped loving him.

I heard he had a girlfriend a week or two after we last slept together and I fell apart. I deleted all his social media accounts, his phone number (from my phone, not my brain), and avoided places I knew he frequented. I stayed home at the times I knew he enjoyed being out best. We didn’t speak for well over a year (with the exception of misguided birthday wishes).

When I finally did see him, it managed to be exciting, awkward and painful all at once. Twice we exchanged hellos and air kisses; his girlfriend stood awkwardly behind, never introduced. The third time, I hid in the crowd and willed myself not to cry in the middle of a party. I willed myself directly on top of a cooler, and danced like I was 18 again. I willed myself very, very drunk.

Peak satisfaction meant my limit. I had consumed all that I could have. Had swallowed all that my stomach would allow. This was all there could be without the very real possibility of making myself sick.

ADDITIONAL CONSUMPTION:
BOOTY CALLS AND AFFAIRS
Marginal Satisfaction: Negative
Total Satisfaction: Unknown/Unrealistic

We were pretending to be friends. Friends who laid in bed side by side watching Project Runway. Friends who spoke about the gym, and the changes we saw in each other’s bodies.

Friends who cuddled. Friends who felt each other up. Friends who gave each other head. Friends who fucked.

We talked after about youthful mistakes and indiscretions. We talked “never agains” and avoiding temptation. We spoke about his intention to end things and the roadblocks preventing him from doing it. We didn’t talk about anything after that. We messaged each other when we felt like having sex, but each pretending that we wanted to see our friend.

There was something buoyant about this. My ego completely inflated and held me afloat. But as we’ve learned with anything, there is a come down, and the feeling of satisfaction continues to dwindle. My ego, fragile as I know she is, deflated again once the time we spent together devolved from evenings spent watching tv and cuddles and talking, to tv and sex, to watching him wrap up a video game and sex, to just an hour in the middle of the night, sneaking in and out the back door of his house.

A final explanation: “as more and more quantity of a commodity is consumed, the intensity of desire decreases and also the utility derived from the additional unit.”

In an effort to not only humanize, but glorify the small business owner, workers often disappear.

Unsplash/Mike Petrucci

I n an address to the National Federation of Independent Business (NFIB), a non-profit which counts over 325,000 small business owners among its members, Vice President Mike Pence gushed that small businesses “create jobs. You provide a pathway of opportunity for generations of Americans. And you are literally the cornerstone of American communities from the smallest towns to the largest cities.” Paraphrasing President Donald Trump, Pence added that small businesses “embody the American pioneering spirit and remind us that determination can turn aspiration into achievement every single day.”

This veneration of small business is by no means specific to the Trump administration. A recent Gallup poll found that 70% of Americans have “a great deal” or “quite a lot” of confidence in small business, compared to 21% for big business.

It’s little wonder that, in pushing its unpopular tax plan, Republicans have focused on how it will benefit scrappy mom-and-pop business owners. Trump crowed that his proposed tax cuts will benefit over 30 million small business owners, cutting their tax rate by 40%. Never mind that this isn’t true, and that one of the small business owners advocating his tax plan actually runs a lobbying firm for big business. His promises have sparked optimism among some small business owners, and gushing stories in conservative outlets about how his plan is helping the little guy. (It’s worth noting that support for small businesses is not entirely partisan, with liberals often using it to promote “buy local” campaigns — but it’s conservatives who exploit the reverence to achieve their tax-slashing aims.)

“I know that a small business is really all about family — whether it’s your immediate family, your extended family, or the family of your employees,” Pence said in his comments to the NFIB.

Even liberals may find it easy to buy into this vision of the earnest, family-run small business embodying everything that makes America great. But the fact is, many small businesses treat their employees just as poorly as more readily criticized corporations. And importantly, employees in these situations are often left with fewer resources to fight back.

The employer-employee relationship is inherently unbalanced; treating small business owners as the benevolent personification of the American dream just tips the scales even more in their favor. In a system that so adamantly favors small business owners, worker self-advocacy and unionization efforts can seem like a kind of betrayal.

This is a dangerous view — not the least because, as it turns out, small business owners don’t always treat their employees all that well.

The NFIB page, despite its cheery presentation of facts, isn’t actually very impressive. In “The Benefits of Working for a Small Business” infographic, under the headline “Major Benefits,” the association boasts that a mere 38% of small businesses offer a retirement plan, while 42% offer disability insurance and 25% offer dental. The survey that provides these numbers also reveals that 21% of respondents exempt all their employees from overtime pay, while only 53.2% offer overtime to all qualifying employees.

Meanwhile, 95% of large firms offer a retirement plan (and such plans are often better than those offered by small firms) and 89% offer dental. According to an analysis from the Bureau of Labor Statistics, an average 34.4% of employees at large firms have access to disability insurance, compared to 23.4% of workers at businesses with under 50 employees, and a mere 10.9% of those employed by businesses with 50–99 employees. As for overtime pay, the 2016 Obama overtime rule would have made it harder for small businesses (and businesses in general) to exempt employees by raising the salary threshold for overtime by 100%. This law, however, was struck down in late 2016, a defeat celebrated by the NFIB.

In fact, compared to large firms (over 500 employees), small businesses are consistently less likely to offer benefits, and 2017 data from the Bureau of Labor Statistics find that access to benefits like health care, retirement, and paid leave decrease along with the size of the business. This is, of course, unsurprising, and it’s true that small businesses have a harder time meeting the costs of these benefits. But that fact does nothing for the workers going without health care and fair pay.

And it’s not just large corporations that find themselves embroiled in scandal — some high-profile labor cases have involved small businesses exploiting and mistreating immigrant workers. In 2012, Flaum Appetizing, a food distributor in Brooklyn, New York, paid a $577,000 settlement to 20 former employees, mostly Mexican immigrants, for withheld compensation. Workers were denied overtime for work weeks as long as 80 hours, and also endured discrimination and verbal abuse, including anti-immigrant comments, from senior management. From 2002 to 2003, there were a total of 1,441 lawsuits against small businesses, with the most common reason being civil rights (15.7% of all cases).

Why Should You Become An Establishment Member For $5 A Month?

In his August remarks, Pence declared that every member of the NFIB “has a story that springs straight out of the American dream.” But this dream — that the U.S. is a fundamentally fair meritocracy in which anyone can succeed through hard work and determination — is not reflected in small business demographics. In fact, 2013 data from the Small Business Administration show the same racial and class divides prevalent in all sectors of society. People of color are far more likely to be employees than owners, and owners’ education levels are comparatively high — 39.2% have a Bachelor’s degree or higher, compared to 29.2% of their employees and 31% nationwide. Employees are also more likely than owners to have a high school degree or less. The same SBA report notes that the numbers of female and, especially, Hispanic business owners have increased over the years; even so, the idea of the small business as the embodiment of the American dream — at least, for anyone not already highly privileged — simply isn’t supported by the available data.

Yet still, the image persists — and so does the centering of small businesses in debates over worker rights. Not only are small businesses used as arguments against regulation, opponents of a $15 minimum wage often invoke the plight of small business owners as well. The Faces of 15 campaign, launched this year by the right-leaning think tank The Employment Policies Institute, profiles small business owners who have been forced to shut down, allegedly due to minimum wage increases. In short videos set to melancholy music, with frequent cuts to locked front doors and empty shelves, small business owners share their stories, often stating that, as much as they would like to pay their employees more, they simply aren’t able to. In some videos, former employees mourn the loss of their jobs. Notably, it is rarely just minimum wage increases that force closure; numerous owners refer to such increases as “the straw that broke the camel’s back.” But Faces of 15 never addresses the other straws.

From 2002 to 2003, there were a total of 1,441 lawsuits against small businesses, with the most common reason being civil rights.

These concerns are, of course, legitimate — but so are the rights and livelihoods of workers. In these efforts to not only humanize, but glorify the small business owner, workers often disappear.

I corresponded with several small business employees about the labor abuses they have experienced. All asked that their last names be withheld, due primarily to fear of retaliation from their employers and people in their communities. While their experiences vary, all have faced obstacles in reporting violations and advocating for their rights, due in part to the image of the noble, well-meaning small business owner.

When she was 16, Emilee started working at a store that sold food and camping supplies in a state park and employed eight students (high school and college) each summer. For most, including Emilee, this was their first job. It was, she wrote via email, “a good situation compared to other prospects,” as the work was fairly easy and employees had significant latitude and free time. Yet Emilee also describes a toxic environment made possible by the exploitation of youthful naiveté and the manager’s community standing.

How To Survive A White Workplace As A Person Of Color

Basic cleaning and safety standards weren’t met — according to Emilee, “It was a running ‘joke’ that if the food safety inspector ever actually came out we’d all be out of a job in a heartbeat.” Employees received no breaks, no overtime, and had to underestimate total work time when clocking out. Sexual harassment was a pervasive problem: “The boss would rub the female employees’ shoulders, hug them frequently, [and] kiss them on their heads,” she says. When the girls, most of whom were underage, complained, the boss argued that “he knew most of the girls growing up so it couldn’t be inappropriate because the relationship was like a father/daughter, or so the claim went.”

Since there were no other supervisors and no HR department to field complaints, pursuing grievances would have required filing a lawsuit, which none of the young employees were empowered to do. Because the community was small — approximately 4,500 people — and the manager so well-respected, even disclosing their frustrations to others could result in pushback from people in the town and difficulty finding future employment. With regard to the sexual harassment, the female employees worried about being dismissed as lying attention-seekers: “It was young, underage girls against a married man with children who was also a revered community member.” That the manager was a teacher who had taught some of the employees in the past made it even harder for them to report infractions. Emilee says the boss “saw himself as a father figure to many of his employees […] and the converse was also true. Many of his employees felt a kinship to him.” Even those who didn’t feel this way “had a great deal of ambivalence about doing anything that might cast him in a bad light.”

If they had done so, they would have had to contend with a lack of community support. Emilee notes that people in small towns not only “know everyone’s business,” but that “everyone has an opinion — usually a very strong one — about everyone else’s business,” which can “concretize in behavior that can ultimately harm the complainants.” Thus, Emilee worried, “Would I be shut out from other jobs because public perception tends to favor men in situations of assault while framing women as liars? Would I even want to work in the community anymore because of the oppressive environment?” For her and many of her coworkers, she concludes, “it was a deeply unsettling, frustrating entrée into employment.”

Autumn works at a bridal shop with fewer than 10 employees. Though she was recently promoted to a manager position and still performs managerial tasks, she lost the promised title and wage increase after asking why she hadn’t received her overtime pay. According to Autumn, the owners told her “they would only pay me straight time, and that they were taking away my position because the ‘management position only seemed to corrupt.’” Lack of overtime pay is a persistent problem at Autumn’s workplace: “My previous manager consistently worked 90+ hour pay weeks and never received any overtime pay. However, she never complained about it, and […] I believe that’s why she was allowed to be kept on and I wasn’t.” The owners’ reason for denying overtime was that they couldn’t afford it — a common defense — but according to Autumn, “they built a million dollar house by the beachside” and “spend thousands of dollars on personal items for themselves.”

Autumn believes that “as far as pay goes we are all equally abused.” However, “any rude comments or distrust are directed mostly toward our employees of color.” The owners told one Black employee that “she looked ‘too ethnic’ when she came in the store wearing a head scarf, or when she came in with her natural hair”; when this employee called the owners’ comments offensive, they cut her hours to the point that she had to find a new job. And Autumn notes a clear double standard in the way the owners treat her, a white woman, compared to Black employees. For example, while Autumn received her key to the store within a month, “we have another Black employee who they’ve stated that they don’t trust with the key […] even though she managed multiple stores.”

This is not to suggest that all small business owners exploit or mistreat their employees. Even those who fail to compensate employees adequately or provide breaks don’t necessarily do so out of malice or disregard. Suzanne used to work at a daycare where staffing shortages often resulted in lack of breaks. This did not go unnoticed by administration, and the assistant director would add missed break time onto the staff’s total hours when doing payroll. “That was a nice thought,” Suzanne wrote in an email, “but not a solution. Still this was the only business where I actually believed that yes, the administration felt bad that this was occurring, and they did their best.”

Suzanne’s current workplace, an assisted living facility, “is a small family-owned business and they push the ‘homey’-ness factor of the place quite a lot, which I think makes them feel like they can ask more favors of us.” Suzanne has had to assert their rights numerous times, reminding the owners that, for example, paid breaks are mandated by law. “I think it surprises them that I would bring state requirements into their little homey business,” Suzanne says. Nonetheless, the facility “is viewed quite highly [in the community], and I too believe that regardless of these violations, it is one of the best places in the industry that I’ve worked with.”

‘As far as pay goes we are all equally abused.’

But what the differences in these experiences show is that, for workers, finding a fair employer is largely a matter of chance. Furthermore, the lack of avenues for small business employees to file grievances means that one’s ability to self-advocate depends on factors like age, knowledge of labor law, and relative social capital. The more vulnerable a worker is — whether due to race, gender, documentation status, age, or disability — the less empowered they are to take action against exploitation and mistreatment. While Suzanne felt empowered to demand breaks, Emilee and her underage female coworkers didn’t even feel comfortable complaining to anyone outside the workplace. Autumn has both seen and experienced the financial repercussions of voicing her concerns to management. And factors like documentation status can make complaints dangerous to pursue.

Small business owners do face unique difficulties, including stiff competition from large competitors, and patronizing local businesses does benefit local economies by keeping money circulating within the community. But none of this excuses abuses against disempowered employees, and small businesses are not inherently ethical or fair. Furthermore, the policies small business owners are often used to advocate — conservative tax reform, ending the Affordable Care Act — overwhelmingly benefit big business.

Worker activism, then, must include not only employees at large firms, but small firms as well; and rather than merely “buy local,” consumers should educate themselves about the working conditions at local businesses. While concerns about the welfare of small businesses should factor into debates about the minimum wage and regulations, owners should not be privileged at the expense of workers. And we certainly shouldn’t push an inaccurate narrative so easily weaponized by anti-labor, big business advocates on the Right.

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]]> https://theestablishment.co/this-striking-feature-of-manila-makes-it-an-emblematic-global-city-f3d89752681d/ Sun, 24 Sep 2017 16:01:00 +0000 https://theestablishment.co/?p=3072 Read more]]> The world’s largest cities have large ‘informal’ populations that are squeezed for local and global profits.

By Nancy Kwak

Tokyo, London, New York, Paris, Manila. Few would think of Manila atop a list of the 21st century’s premiere cities. Nor would most think of the Philippine capital as a critical node in the global economy. Yet Manila is indisputably at the centre of some of the most important urban trends of the past half-century: it is the world’s most densely populated city, and continues to grow at an exponential pace. It serves as the headquarters to one of the fastest growing economies in the world (10th in 2017, according to the World Bank). Filipinos, especially residents of Manila, travel all over the world as nurses, nannies, construction workers and sailors. They provide the mass labour fueling the global service economy.

In our urbanizing world, Manila, and a few other rapidly growing world cities, are not only just helpful in understanding how global cities work; they are indispensable.

Manila has long served as a hub connecting regional, colonial and global economies. The city sits on the coast of Manila Bay at the mouth of the Pasig River; it is low-lying, fairly flat in topography, and woven through with estuaries. Not surprising given seasonal monsoons and tropical cyclones, Manilans often have to cope with devastating floods. The most striking aspect of life in Manila, however, lies not in physical attributes but rather in the legal status of the communities living above and around these waterways. For the residents of this city of nearly two million, ‘informality’ is an all-encompassing, defining feature of everyday life in the capital.

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The term ‘informality’ is sometimes conceptualized as a periphery or a place of exclusion, but it is more accurate to define it simply as an absence of government control, management, or knowledge over an area.
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The term ‘informality’ is sometimes conceptualized as a periphery or a place of exclusion, but it is more accurate to define it simply as an absence of government control, management, or knowledge over an area. A city can be predominantly informal with lively black markets and mostly unregulated labour and housing. Informality does not have to occur on the margins of everyday life. In Manila, informality is both ubiquitous and poorly understood; statistics are widely varying and erratically collected. The government estimated in 2010 that roughly one in five residents of Metro Manila lived in housing about which the government kept few records and over which it had little authority. The number has most likely grown.

The Rockefeller Foundation’s current Informal City project offers some estimates. According to a recent report, 40 to 80% of Filipino residents work in the informal economy. Meanwhile, informal settlements are everywhere apparent, with self-built structures lining the waterways and filling nearly every available space in the city, and with informal settlers working in seemingly every aspect of the urban economy.

Even a casual look at Manila, and other bourgeoning global cities, shows that the functioning of the urban economy depends on informality. Informality allows workers to subsist on marginal incomes. Informality provides homes where the formal market does not. Despite or perhaps because of their meagre pay, these workers’ role in the global service economy is anything but marginal. A shoe repairman sets up a roadside station where he fixes the shoes of the restaurant worker who in turn serves food to visiting investors and local businesspeople. Workers rest in informal settlements before getting up to drive the jeepneys that transport young men and women inexpensively to Makati’s call centers. There, they will answer questions and complaints from customers of global firms headquartered in New York, London, and more. All for a low wage. Informality provides the foundation for local and global profits.

Manila helps us to understand how informality grew into a prevalent way of life in some cities, and an integral component of the global economy. In 1945, at the end of the Second World War, poor rural migrants flooded into Manila, in search of work and food. For these desperate newcomers, land-use rights mattered much more than land titles. Rural migrants built their own shelter on unoccupied land in the city, whether along railroad tracks, extending on stilts over waterways, or under bridges, and they constructed a sense of ownership that included the right to lease and sublease their units.

Many ultimately set up their homes near or on Manila Bay in the northern district of Tondo — a community of some 180,000 residents by the early 1970s. Residents did not deny the lack of government recognition for their land rights. Nonetheless, they still felt a sense of ownership, as evidenced in Zone One Tondo Organization’s explanation for resident motives when staying in unserviced homes in 1973: ‘the people prefer to live in a very small barung-barong [shanty] that is their own rather than rent a place’.

Those In Poverty: You Aren’t Responsible For Making Your Family Comfortable

The former president Ferdinand Marcos understood informality. He understood migrants’ claims to property rights; in fact, he tried to neutralize the political power of Tondo residents by defining informality in opposition to formal, state-regulated spaces. In 1975, Marcos issued a presidential decree criminalizing ‘squatters’ and ‘squatting’ as a ‘nefarious’ action punishable by incarceration and/or fines. In this way, the Philippine government implemented a clear legal dichotomy — formal versus informal, legitimate versus squatting. It did so in an attempt to strengthen the power of the state while undermining the political power of poor people who might oppose the ruling class. Put simply, the state created informality.

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Governments around the world build a divide between formal and informal residents, for historical and political reasons.
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The Philippine government is not unique in building a divide between formal and informal. Governments around the world do likewise, and for reasons historical and political. International advisors in United Nations technical assistance missions and U.S. foreign-aid programs advise Kenya, South Africa, Thailand, Peru, the Philippines and other so-called ‘developing’ countries to do so. These well-meaning technocrats, planners, housing experts and international development experts often find the manner and pace of urbanization in these cities unruly and confusing. So they urge national governments to foster order by adopting or reinstituting vigorous land surveying and titling programs. If individuals owned land, that land would become property — a site of investment and a potential source of profit. Regularized records would facilitate global investment. To Western development specialists, this is order, progress, modernity.

Development technocrats assure governments that fostering a class of property owners also means a class of citizens invested in political stability. Their message of stability appeals to governments concerned about their own security. Manila City Council members, for example, repeatedly requested advice from William Levitt, a U.S. property developer who quipped in 1948: ‘No man who owns his own house and lot can be a communist. He has too much to do.’

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People living and working in these spaces have for decades contended with efforts to, essentially, delegitimize their economic activity and weaken them politically.
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People living and working in these spaces have for decades contended with efforts to, essentially, delegitimize their economic activity and weaken them politically. Informal dwellers have no illusions about their marginalization in the global city. ‘They think we are garbage people,’ one taxi driver and Tondo resident observed bitterly. And then, with a bark of laughter, he added: ‘Unless it is time for an election!’

This originally appeared on Aeon. Republished here with permission under Creative Commons.

Conspicuous Consumption Is Over — It’s All About Intangibles Now

The troubling new way America’s top 1% reproduce their privilege ensures the middle class never has a shot to catch up.

Pixabay

By Elizabeth Currid-Halkett

I n 1899, the economist Thorstein Veblen observed that silver spoons and corsets were markers of elite social position. In Veblen’s now famous treatise The Theory of the Leisure Class, he coined the phrase ‘conspicuous consumption’ to denote the way that material objects were paraded as indicators of social position and status. More than 100 years later, conspicuous consumption is still part of the contemporary capitalist landscape, and yet today, luxury goods are significantly more accessible than in Veblen’s time.

This deluge of accessible luxury is a function of the mass-production economy of the 20th century, the outsourcing of production to China, and the cultivation of emerging markets where labour and materials are cheap. At the same time, we’ve seen the arrival of a middle-class consumer market that demands more material goods at cheaper price points.

However, the democratization of consumer goods has made them far less useful as a means of displaying status. In the face of rising social inequality, both the rich and the middle classes own fancy TVs and nice handbags. They both lease SUVs, take airplanes, and go on cruises. On the surface, the ostensible consumer objects favored by these two groups no longer reside in two completely different universes.

Given that everyone can now buy designer handbags and new cars, the rich have taken to using much more tacit signifiers of their social position.

Given that everyone can now buy designer handbags and new cars, the rich have taken to using much more tacit signifiers of their social position. Yes, oligarchs and the superrich still show off their wealth with yachts and Bentleys and gated mansions. But the dramatic changes in elite spending are driven by a well-to-do, educated elite, or what I call the ‘aspirational class’. This new elite cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it — preferring to spend on services, education and human-capital investments over purely material goods. These new status behaviors are what I call ‘inconspicuous consumption’. None of the consumer choices that the term covers are inherently obvious or ostensibly material but they are, without question, exclusionary.

The rise of the aspirational class and its consumer habits is perhaps most salient in the United States. The U.S. Consumer Expenditure Survey data reveals that, since 2007, the country’s top 1% (people earning upwards of $300,000 per year) are spending significantly less on material goods, while middle-income groups (earning approximately $70,000 per year) are spending the same, and their trend is upward. Eschewing an overt materialism, the rich are investing significantly more in education, retirement and health — all of which are immaterial, yet cost many times more than any handbag a middle-income consumer might buy. The top 1% now devote the greatest share of their expenditures to inconspicuous consumption, with education forming a significant portion of this spend (accounting for almost 6% of top 1% household expenditures, compared with just over 1% of middle-income spending). In fact, top 1% spending on education has increased 3.5 times since 1996, while middle-income spending on education has remained flat over the same time period.

Eschewing an overt materialism, the rich are investing significantly more in education, retirement and health — all of which are immaterial, yet cost many times more than any handbag a middle-income consumer might buy.

The vast chasm between middle-income and top 1% spending on education in the U.S. is particularly concerning because, unlike material goods, education has become more and more expensive in recent decades. Thus, there is a greater need to devote financial resources to education to be able to afford it at all. According to Consumer Expenditure Survey data from 2003–2013, the price of college tuition increased 80%, while the cost of women’s apparel increased by just 6% over the same period. Middle-class lack of investment in education doesn’t suggest a lack of prioritizing as much as it reveals that, for those in the 40th-60th quintiles, education is so cost-prohibitive it’s almost not worth trying to save for.

While much inconspicuous consumption is extremely expensive, it shows itself through less expensive but equally pronounced signaling — from reading The Economist to buying pasture-raised eggs. Inconspicuous consumption in other words, has become a shorthand through which the new elite signal their cultural capital to one another.

In lockstep with the invoice for private preschool comes the knowledge that one should pack the lunchbox with quinoa crackers and organic fruit.

In lockstep with the invoice for private preschool comes the knowledge that one should pack the lunchbox with quinoa crackers and organic fruit. One might think these culinary practices are a commonplace example of modern-day motherhood, but one only needs to step outside the upper-middle-class bubbles of the coastal cities of the U.S. to observe very different lunch-bag norms, consisting of processed snacks and practically no fruit. Similarly, while time in Los Angeles, San Francisco and New York City might make one think that every American mother breastfeeds her child for a year, national statistics report that only 27% of mothers fulfill this American Academy of Pediatrics goal (in Alabama, that figure hovers at 11%).

Knowing these seemingly inexpensive social norms is itself a rite of passage into today’s aspirational class. And that rite is far from costless: The Economist subscription might set one back only $100, but the awareness to subscribe and be seen with it tucked in one’s bag is likely the iterative result of spending time in elite social milieus and expensive educational institutions that prize this publication and discuss its contents.

Donald Trump Is A Rich Man’s Idea Of A Rich Man

Perhaps most importantly, the new investment in inconspicuous consumption reproduces privilege in a way that previous conspicuous consumption could not. Knowing which New Yorker articles to reference or what small talk to engage in at the local farmers’ market enables and displays the acquisition of cultural capital, thereby providing entry into social networks that, in turn, help to pave the way to elite jobs, key social and professional contacts, and private schools. In short, inconspicuous consumption confers social mobility.

More profoundly, investment in education, healthcare and retirement has a notable impact on consumers’ quality of life, and also on the future life chances of the next generation. Today’s inconspicuous consumption is a far more pernicious form of status spending than the conspicuous consumption of Veblen’s time. Inconspicuous consumption — whether breastfeeding or education — is a means to a better quality of life and improved social mobility for one’s own children, whereas conspicuous consumption is merely an end in itself — simply ostentation. For today’s aspirational class, inconspicuous consumption choices secure and preserve social status, even if they do not necessarily display it.

This article was originally published at Aeon and has been republished under Creative Commons.

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