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15 of 15 people found the following review helpful
5.0 out of 5 stars Buying this book is money well spent, 3 July 2002
Coert Visser "" (Driebergen Netherlands) - See all my reviews
This fascinating book describes how a new virus, the luxury fever has Americans seemingly inescapably in its grip: people spend a larger and larger proportion of our money on luxury goods. And, because for most people incomes have remained static or have even declined (in the US and the UK), this extra spending was financed by lower savings and higher debts, making the economy weaker and more vulnerable. Further, most people work longer and tend to spend less time on important activities such as vacations, being with family, sleeping exercising, etc.
To make things worse: Americans spend less on vital public services which leads to a deteriorating infrastructure, to higher crime, to dirty streets and parks, to water pollution, to a deteriorating education system, etc. And what about health? 40 million Americans currently lack health insurance.... This book explains how there is a competition 1) between different forms of private spending (do we buy luxury or do we spend our money differently?) and 2) between private and public spending. To expand on the latter point: a growing share of the US national income is spent on consumption and spending on vital publics services is increasingly threatened.
Frank explains (on the basis of well-being research and the adaptation-level theory) that the main reason we buy luxury goods is to demonstrate to others that we can afford to thereby trying to distinguish ourselves from them. In doing so we try to achieve happiness by improving our relative status. The irony is, however, this absolutely doesn't work! The satisfaction we get from luxury spending, which Frank calls conspicuous spending, depends largely on context. The satisfaction we get from luxury spending lasts only shortly. Two examples: 1) If we buy an expensive car, this distinguishes us from our neighbour and we feel happy. If, however, next month our neighbour buys an even fancier one, our satisfaction will be largely gone. You can see how this leads to an escalation, an arms race, with no winners. 2) The satisfaction we get from luxury goods tends to decline steeply over time. We tend to get used quickly to what we have and the favourable features of the luxury good tend to fade into the background rapidly: we no longer notice the fancy features of our expensive car and our satisfaction diminishes. Bottom line: this increasing conspicuous spending does more harm than good.
We have to discourage conspicuous consumption in favour of inconspicuous consumption. Frank explains that no individual or family alone can solve this problem. It has to be solved at a higher level. He proposes a simple but effective measure to discourage conspicuous consumption, a progressive consumption tax levied on consumption rather than income. Frank claims this tax can stimulate radical changes in the ways we lead our lives. Contrary to the believe of many, he convincingly argues, this progressive consumption tax would not cripple the economy but invigorate it. A fascinating book also highly relevant for European countries I think.
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9 of 9 people found the following review helpful
5.0 out of 5 stars A riveting non-political look at the reasons for materialism, 28 April 2002
By A Customer
This is one of the most intelligent books I have read in a long time and reads like an unputadownable novel.
We all know the syndrome. We are surrounded by technological gadgets we have bought that we don't know how to use. We don't know how to use them, because we don't need them. What do all those "features" on your video really do? In the western world we all seem to have more than we need, but we don't seem to be any happier. Why? Robert Frank addresses this question and provides explanations based on some very simple theories of human (and animal) behaviour. He shows how the adaptability of humans makes them impervious to material gains in the long run. He explains why it is relative wealth that interests us, not absolute wealth. He expounds the "smart for one, dumb for all" theory that explains why "l'enfer c'est les autres".
He appears to have no axe to grind and examines all issues from both an economic and sociological perspective. Having explained the malaise, he goes further in proposing a solution that may be eminently workable and which really might reverse the ridiculous materialistic spiral in which we find ourselves.
I can't recommend this book too highly. For those of us bored with political spin promising us a future Eldorado in which we will all be deliriously happy, this book deals with those same questions in an apolitical way and provides far more intelligent answers.
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7 of 9 people found the following review helpful
5.0 out of 5 stars Highly Recommended!, 13 Oct 2004
Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
Every reader should consider this book critically. Author Robert H. Frank's thesis is that runaway consumption of extravagant luxuries is a major problem in American society. This concept may have seemed more valid in 1999, at the height of the dot-com bubble, when the book first rolled off the presses, than it does in 2004. The intervening recession has done a lot to rearrange household consumption priorities. Yet one need only look at the houses, cars and home entertainment systems on the market to recognize that the thesis has not entirely lost all merit. For the more muscular theoretical foundation of this premise, readers are referred to the superior 100-year-old classic The Theory of the Leisure Class by Thorstein Veblen. Even in the shadow of that light, Frank's observations about the pressures to consume - especially the evidence that he marshals for an evolutionary compulsion to "keep up with the Joneses" - merits notice. While the author's proposed remedy of a consumption tax is sure to be controversial we believe this book deserves to be read and appreciates its unusually stimulating, accessible writing on economics.
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Luxury Fever: Weighing the Cost of Excess
Luxury Fever: Weighing the Cost of Excess by Robert H. Frank (Paperback - 4 April 2010)
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