If you want an illuminating example of the fact that there is more to the way that prices work in a free market than can be captured by the pragmatic calculations of cold-eyed util-traders, consider the luxury-goods market and its enthusiastic following among people who do not themselves consume many or any of those goods. One of the oddball aspects of rich societies such as ours is the fact that when people pile up a little bit more disposable income than they might have expected to, they develop a taste for measurably inferior goods and outdated technologies: If you have money that is a little bit obscene, you might get into classic cars, i.e., an outmoded form of transportation; if your money is super-dirty obscene, you get into horses, an even more outmoded form of transportation.
Or consider the case of fine watches: Though he — and it’s a “he” in the overwhelming majority of cases — may not be eager to admit it, a serious watch enthusiast knows that even the finest mechanical timepiece put together by magical elves on the shores of Lake Geneva is, as a timekeeping instrument, dramatically inferior to the cheapest quartz-movement watch coming out of a Chinese sweatshop and available for a few bucks at, among other outlets, Wal-Mart. (To say nothing of the cheap digital watches sold under blister-pack at downscale retailers everywhere, or the clock on your cellphone.) But even as our celebrity social-justice warriors covet those high-margin items — and get paid vast sums of money to help sell them, too — they denounce the people who deal in less rarefied goods sold at much lower profit margins.
If economic “exploitation” means making “obscene profits” — an empty cliché if ever there were one — then Wal-Mart and the oil companies ought to be the good guys; not only do they have relatively low profit margins, but they also support millions of union workers and retirees through stock profits and the payment of dividends into pension funds. By way of comparison, consider that Hermès, the luxury-goods label that is a favorite of well-heeled social-justice warriors of all sorts, makes a profit margin that is typically seven or eight times what Wal-Mart makes, even though, as rapper Lloyd Banks discovered, its $1,300 sneakers may not always be up to the task. If Wal-Mart is the epitome of evil for selling you a Timex at a 3 percent markup, then shouldn’t Rolex be extra-super evil?
Kevin D. Williamson, “Who Boycotts Wal-Mart? Social-justice warriors who are too enlightened to let their poor neighbors pay lower prices”, National Review, 2014-11-30.
February 3, 2016
QotD: The wealthy and their status-signalling spending habits
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