Wealth Wisdom from History

Economist Thorstein Veblen coined the term “conspicuous consumption” in 1899 — the idea that people flaunt wealth through flashy homes, luxury cars, and designer goods. From Gatsby’s mansion to the phrase “keeping up with the Joneses,” this mindset shaped how we view success.

The idea is that if you were rich, you would show it off. That meant huge mansions on Fifth Avenue and expensive cars like a Duesenberg. The Deusenberg was an American car that pioneered the “straight-eight” 8-cylinder engine and was the first American car to win a Grand Prix race. The Deusenberg was so expensive and luxurious that it gave rise to the expression, “That’s a Doozie!”

Veblen’s point was that whether it was homes, cars, jewelry, expensive watches or any other luxury goods, the rich would not only buy them but make sure you knew they had them. This led to a kind of competition among the rich to see who could afford the biggest yacht or estate in Newport, Rhode Island. The epitome of this behavior was captured by F. Scott Fitzgerald in his novel The Great Gatsby. The middle-class version of this became known as “keeping up with the Jones’s.” Whether you were rich or middle-class, the idea of status competition expressed through the display of material goods was well-attested.

But here’s the catch: this status race doesn’t just cost money — it costs long-term family wealth and national prosperity.

👉 True wealth isn’t in what you show, but in what you grow.

Long-term impacts:

🔸 On Family Wealth:

• Prioritizing luxury over investment often leads to poor cash flow and mounting debt.

• Families stuck in status-driven spending may fail to build generational wealth through assets like real estate, stocks, or businesses.

• Children often inherit a mindset of spending, not investing — continuing the cycle.

🔸 On National Wealth:

• Overconsumption encourages imports and consumer debt, weakening economic stability.

• Societies driven by image rather than productivity may face declining innovation and savings rates.

• Governments may cater to short-term consumerism rather than long-term policies for economic resilience.