The Price of Prestige

68 chapter three

The discussion so far has generated several hypotheses that should en-

able us to differentiate between the conventional understanding of pro-

curement and the one generated by the Veblenian approach. In particular,

it suggests that the consumption of prestige goods (those that are both

conspicuous and costly) will show weaker association with traditional stra-

tegic explanatory variables when compared with the consumption patterns

of less conspicuous and /or cheaper goods. Indeed, a statistical examina-

tion of the world’s navies finds wealth (as measured by the size of GDP)

and the size of a country’s fishing industry (measured by annual maritime

catch in metric tons) to be the only robust determinants of naval procure-

ment. Other variables — such as the length of a country’s shoreline, the

size of its merchant marine, its reliance on trade, the number of conflicts it

has been involved in, or the size of its exclusive economic zone (EEZ)—

prove statistically insignificant. While fishing is statistically significant, the

coefficient estimates suggest that its real effect on a navy’s size is largely

inconsequential. Hence, wealth seems to be the main determinant of na-

val procurement (Gilady 2006 ).^9 Interestingly, a similar examination of

the determinants of tank procurement finds exactly the opposite. Tradi-

tional strategic variables are closely correlated with tank procurement,

but wealth, the only variable that seems to explain naval procurement, is

proven statistically insignificant (Gilady 2006 ). These findings match the

expectation of the conspicuous consumption approach but are difficult to

explain through more conventional approaches such as deterrence.

As predicted by the conspicuous consumption theory, the procurement

of the less conspicuous and less expensive weapon system — the tank— is

more heavily affected by geostrategic considerations, while the procure-

ment of the more conspicuous and expensive weapon system — the war-

ship — is driven mainly by wealth. In the case of less conspicuous goods,

such as the tank, there is little utility in acquiring additional units once the

strategic needs are satisfied. An additional unit cannot generate secondary-

utility benefits because it is not extravagant enough. Conversely, in the

case of conspicuous goods, especially ones like the navy that are connected

to international structures of prestige, buying an additional unit can still

generate positive utility even when strategic needs have been met. These

goods are conspicuous enough to spawn secondary- utility returns. In fact,

these returns may grow with every additional unit because the growing

level of excess increases the appearance of luxury.

These findings indicate that contemporary naval procurement is not

driven by immediate geostrategic concerns. Instead, they establish a strong

and robust connection between naval procurement and wealth — actors