I’m usually skeptical of research that involves brain scans and areas lighting up when they are stimulated and that sort of thing—it seems reductive to equate brain activity with specific kinds of thoughts—but since this particular research into luxury effects that the Economist reported recently confirms suspicions I already had, I thought I would pass it along. The upshot of this study is this: “Dr Rangel and his colleagues found that if people are told a wine is expensive while they are drinking it, they really do think it tastes nicer than a cheap one, rather than merely saying that they do.” The question is whether this distinction is at all salient. It seems like evidence that people who buy into invidious display and conspicuous consumption are not merely other-directed and status conscious; their brains actually can translate the feelings of social superiority evoked by purchasing power into biochemical pleasure. They are not phonies simply pretending to like what’s more expensive to justify the conspicuous consumption. In saw ways, this suggests their consciousness is even falser than previously suspected; they are not in bad faith so much as betrayed by their own biology into transmuting money into fleeting pleasure.
Conspicuous consumption and waste are an important part of social display. Deployed properly, they bring the rewards of status and better mating opportunities. For this to work, though, it helps if the displaying individual really believes that what he is buying is not only more expensive than the alternative, but better, too.
Rangel, who conducted the study, believes this effect has something to do with an evolutionary (of course) need for learning.
Rangel suspects that what he has found is a mechanism for learning quickly what has helped others in the past, and thus for allowing choices about what is nice and what is nasty to be made speedily and efficiently. In modern society, price is probably a good proxy for such collective wisdom.
The idea that price is a proxy for collective wisdom seems a bit suspect, though. Despite what Hayek may argue about knowledge and prices, the magic of markets is not that efficient in translating truth into numerical values. Cooperation and survival don’t seem to be the sort of information conveyed by prices, which instead articulate scarcity and induce competition. It seems far more likely that we have a strong predisposition to want to believe our own bullshit. Just as the most gifted liars ended up persuading themselves of the truth of their own fictions, the conspicuous consumer ends up tasting the waste as nectar.