- Wealth and status aren’t the same because they have different levels of visibility, according to Wharton professor Jonah Berger.
- The difference dates back to the Industrial Revolution, which gave birth to a new social class – the nouveau riche – that was able to build its own fortune and spend its wealth on material goods to display status.
- Today’s elite is instead pivoting to discreet wealth habits, investing in immaterial means like education to propel social mobility and signify cultural capital.
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The reason why some people will pay $US14,000 for a handbag just might come down to the difference between wealth and status.
“Wealth is often private,” wrote Jonah Berger, marketing professor at the Wharton School of the University of Pennsylvania, in his book, “Invisible Influence: The Hidden Forces That Shape Behaviour.” “No one but you (and maybe your spouse) knows how much money you have in your bank account. Status, however, is social. It is attained in the eyes of others. The respect of one’s peers.”
Wealth isn’t visible, but an expensive luxury good is – and you can thank the Industrial Revolution for the rise of such status symbols.
Until the Industrial Revolution, wealth was static and hereditary, explained Berger. Once the revolution kicked off, however, money became something that could be acquired and a new social class was born: the nouveau riche.
The nouveau riche were those originally born into a lower social class who later built their own fortunes – thereby gaining access to the goods and services that were once available to only the elite with inherited wealth.
“But simply buying expensive goods wasn’t enough,” Berger said. “The nouveau riche didn’t just want wealth, they wanted the status that comes with it.”
So, they engaged in conspicuous consumption, the concept of using material items to signify social status. Rather than buying expensive items that were private, like dishes or food, they bought consumer goods to symbolise their wealth to others, Berger wrote.
Discreet wealth is replacing visible displays of money as the new status symbol
However, status has taken on a new shape since the Industrial Revolution. Showing off wealth is no longer the preferred way to signify having it. Today’s elite are now engaging in discreet wealth, or what Elizabeth Currid-Halkett calls “inconspicuous consumption” in her book “The Sum of Small Things: A Theory of an Aspirational Class.”
It’s a growing trend among not only millionaires and billionaires, but what Currid-Halkett calls “the aspirational class,” a “new elite [that] cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it,” she wrote in an article.
Instead of investing in material items, the elite are investing in things like education and health, which helps them gain social mobility and access to what the middle class cannot.
As Currid-Halkett puts it, these choices may not display social status, but they secure it.
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