Although this is primarily for my private list, this
contains a few strands of brilliance which FWers might like to
read.
<<<<
151. Will you forgive me, Kirsty?
Soon after this list started, one of our members, Kirsty Rodwell,
suggested that I should add houses to my category of Status Goods.
I was, of course, aware that a house is one of the most prominent status
symbols that exist in modern society because it signifies high
status/high income. In fact, perhaps because it is so visible, it is a
good that probably has the most precise relationship with wealth.
However, I argued against Kirsty's suggestion because I had a too fixed
definition of status good in my mind. (I've learned since that some
economists have a term, Positional Good, which is similar to
mine.) In my definition, a status good had to be innovative (and houses
aren't that, are they?); it had to have novelty and be sufficently
high-priced to appeal to what I call the trend-setting Initiatory
Class (and houses are always available at all price levels by all
social classes); and finally, it had to have the facility of being
subsequently mass-produced so that it could be supplied increasingly
cheaply, thus sweeping through all the social strata and producing a wave
of new investment which can kick-start economic growth (but houses are a
byproduct of economic growth, rather than precursors). Ergo,
houses aren't status goods.
But I take it all back. I was rather uncomfortable in arguing
against Kirsty's suggestion, but then even my 'technical' objections to
houses being status goods doesn't really stand up. For one thing, the
first houses, whether of bent branches covered with animal skins, or the
rib-cages of mammoths, were certainly innovations of a high order when
they first occurred. (As usual, the original members of their respective
tribes must have thought that the inventors were barmy.) When one thinks
of the Tierra del Fuegans whom Darwin saw on his travels, and the
aboriginal Tasmanains who had become so isolated -- without trade in
goods or ideas -- that they became almost totally de-skilled over time
and were reduced to sleeping in holes in the ground. (Which, of course,
could happen to us in the developed countries if we started, and
subsequently maintained trade protection for long enough. The Great
Depression of the 1930s ought to show of the economic rot that can get
started when this occurs.)
And, of course, house-building also produces a subsequent wave of
purchases of furniture, garden spades and do-it-yourself goods. This may
not be, as it were, a 'primary' economic wave of great significance but,
then, some of the things I have subsequently written about (Nike
trainers, for example, among the young), hardly set off huge waves of
economic expansion either (nor do they start with the initiatory class),
yet I have been calling them status goods.
So yes, although houses satisfy only two of my three original critera for
defining status goods, they're most certainly of this ilk. I must,
therefore, expand my definition a little! One mustn't let theory get in
the way of reality. (Though Einstein did. When one particularly
experiment disproved his Theory of Relativity, he said that the
experiment must be wrong! It was. But then, I'm not Einstein.)
I'm minded to write this 'publicly' on this private list because I've
been uncomfortable about this for quite a time. But I've also been
prompted by another piece that's welling up in my mind that's to do with
houses, and I thought I'd better get this confession out of the way
first. So I hope Kirsty will forgive an old man and his ossifying brain
cells.
Keith Hudson
Keith Hudson, Bath, England,
<www.evolutionary-economics.org>,
<www.handlo.com>,
<www.property-portraits.co.uk>
