LUXURY FEVER: Why Money Fails to Satisfy in an Era of Excess

LUXURY FEVER: Why Money Fails to Satisfy in an Era of Excess. By Robert H. Frank. Free Press. 336 pp. $25

The townspeople of Ithaca, New York, once disdained each passing Porsche, according to Cornell University economist Frank, but now they view pricey cars with envy. Even the author is not immune: he acknowledges owning a BMW—purchased used, he stresses. Out of such insidious, competitive profligacy, Frank contends, grow myriad social ills, including bleak inner cities, neglected children, air pollution, potholes, and obesity.

In Luxury Fever, Frank amasses prodigious evidence of America’s wasteful ways. Since 1980, the market for fine wines has grown by 23 percent annually. The average size of new houses was 1,100 square feet in the 1950s; it’s 2,000 square feet today. (Bill Gates’s 45,000-square-foot palace especially offends Frank, who wishes the Microsoft founder would erect a smaller house and use the savings to subsidize mass transit.) And, the author notes, while the top earners accumulated ever-larger fortunes, median family income dropped two percentage points between 1990 and 1995. The rich have spent more on luxury items, but, contrary to the assumptions of laissez-faire economics, society as a whole has not benefited.

After lamenting the growing gap between rich and poor, an issue often raised by liberals, the author borrows the rhetoric of Darwinian analysis from conservatives to explain the acquisitive compulsion. Male deer through the generations have sprouted everlarger antlers because, it appears, females find them alluring. Massive antlers thus help propagate the species, but they also make it difficult to navigate through thick forests. Conspicuous consumption, Frank contends, is the human equivalent of antlers. (He fails to note what may be a closer equivalent: cosmetic surgery, which he derides elsewhere as wasteful.) To pay for larger homes and spiffier cars, Americans immerse themselves in debt, work through evenings and weekends, and, like the unwieldy bucks, find life increasingly difficult to navigate.

Frank proposes heavily taxing conspicuous consumption in order to encourage "inconspicuous consumption," which would result in cleaner air, happier families, and longer vacations. But such measures, including a now-repealed tax on luxury boats, have failed in the past. More to the point, materialism, economic inequality, and environmental degradation have roots running deep in American history. The Vanderbilts lived opulently long before Bill Gates. Luxury Fever sets forth our spending patterns in rich detail, but fails to account for the traits of American character that underlie them.

—Richard Houston