[OPE-L] luxury spending, Sombart, and Grossman

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Sep 09 2006 - 23:54:43 EDT

Sombart also had ideas about the importance of 
capitalists' unproductive expenditures on 
luxuries. He did not think of them in terms of 
their effects on macroeconomic stabilization role 
or the growth rate. He certainly did not demote 
luxury spending to a a mere residual as did Otto 
Bauer in his scheme (it's good to guard against 
the common error of conflating Grossman's 
extension of the Bauer's scheme with his actual 
theory spelled out over 700 pages).

  Jack Goody has recently written:

This luxury had a basic role to play in the growth of capitalism,
or, as I would prefer to say, of international exchange. In other
and earlier cultures exchange took place in basic commodities and
was local and less frequent; people ate what they grew or bought
in the neighbourhood market. It was the luxury items that were
brought from outside and which formed the basis of the long-
distance trade, of inter-societal exchange. It was Sombart who con-
sidered that a central factor in the growth of exchange in the modern
world was the trade in luxury goods. From one point of view that
point is obvious. Because of the problem of transport distant com-
merce inevitably involved small, highly valued items, that is,
luxury objects. They may have been worth very little when they
started (la mise`re) but they acquired luxury status by their rarity
in their new environment, after being transported a considerable
distance. That would be the case with kola nuts in West Africa,
collected freely in the Asante forest and not especially prized or
used, but a valuable stimulant (from caffeine) for Muslims travelling
through desert or savannah lands, and an important element in
Arab medicine in North Africa and eventually in Europe, where
they were made into medicinally recommended kola biscuits and
kola wine at the end of the 19th century. The third phase in their

progress was the move from luxury to mass consumption by modern
productive methods, when they eventually became Coca-Cola1, but
incorporating industrial chemicals rather than wild produce.

From page 348

Social Science Information Vol 45 - no 3

Social Science Information, Vol. 45, No. 3, 341-348 (2006)
DOI: 10.1177/0539018406066526
 2006 Maison des Sciences de l'Homme , SAGE Publications

From misery to luxury
Jack Goody

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