The Price of Prestige

156 chapter six

Here again, the rationalist puzzle resembles the basic pattern of Veblen

effects — a more expensive good is consumed when a cheaper substitute is

readily available. Accordingly, within this framing, conspicuous consump-

tion can be used to explain some arms races. When tackling the puzzle of

arms races, Wagner is forced to salvage the assumption of rationality by

concluding that actors are either myopic or that they engage in arms races

as a result of a highly complex set of calculations. Analyzing arms races as

the result of a Veblen effect is neither a less parsimonious solution to this

puzzle nor a less plausible one.

The importance of conspicuous consumption goes beyond abstract theo-

retical musings. Veblen effects challenge conventional predictions regard-

ing the relationship between price and demand. If certain weapons systems

serve as status goods, for example, reducing their price might decrease their

appeal and vice versa. This was the case with the F- 20 fighter program: in-

stead of selling more planes, the cheaper price tag drove consumers away.

Similarly, the low price tag of participation in peacekeeping operations

reduced their appeal for middle- power contributors. Following this line

of argument can lead us to counterintuitive and paradoxical prescriptions

such as advocating lower prices for weaponry as an effective instrument

of arms control. Conversely, increasing the costs of war may not always

be an effective tool for war prevention. While provocative and undoubt-

edly problematic, these policy implications suggest that relying on price

manipulation as a policy tool can have counterintuitive consequences. On

the whole, as the historical record of sumptuary legislation demonstrates,

policies aimed at curbing conspicuous consumption are likely to fail if they

rely on price manipulation alone while neglecting to address the social di-

mensions of consumption.

The Four Dimensions of Conspicuous Consumption

In chapter 1 I identified four dimensions in which we should expect to find

observable behavioral footprints of the quest for prestige: conspicuous-

ness, cost, hierarchy, and cycles of status symbols. Indeed, throughout the

empirical chapters of this study, we can find many examples of all four di-

mensions at work. Through the exploration of different issue areas, this vol-

ume submits a body of illustrative evidence in support of the conspicuous

consumption theory. It lends support to the existence of prestige- seeking

behavior in international relations by identifying consumption patterns