Those at war need a uniform. High-end fashion and consumption provides that uniform of privilege that those engaging in this class war are determined to maintain.
Richard Murphy is an economic justice campaigner. Professor of Accounting, Sheffield University Management School. Chartered accountant. Co-founder of the Green New Deal as well as blogging at Tax Research UK
Cross-posted from Tax Research UK
The FT has a feature article today under the headline:
The article celebrates the rise of LVMH, which is now Europe’s largest company by value. It primarily does fashion, but luxury goods, hotels and services all make up a part of its activities.
According to the FT, the rise in demand for luxury goods is relentless:
Two things occur to me. One is that this makes it very clear where inflationary pressure from consumers is coming from. That pressure is coming solely from the top end of markets, which is why taxes on wealth are needed to tackle it.
The other refers to comments I made yesterday on Nicky Campbell’s show on Radio Five Live and the BBC television News Channel. The National in Scotland reported my comments, so I have a transcript available. I said, when concluding my comments on Bank of England chief economist Huw Pill’s claim that we must all accept that we are poorer now:
We have them saying we must accept this – well, I don’t accept this, nor do I accept that the government need to continue with the policy of continuing austerity by saying they must not balance the books. These things are not true.
The one thing they don’t want to increase is wages – and I am blunt about this.
This is a conspiracy and there is a conspiracy going on – and the conspiracy is against working people in favour of the wealthy and there is a class war going on in this country right now.
That class war is by the wealthy on working people and that is something we have to recognise isn’t necessary.
We could cut taxes for those who are working, we could increase taxes on wealth to redistribute because that is essential, we could cut interest rates and we could spend more and that is entirely possible.
I am, of course, not the first to refer to class war being waged by the wealthy. Warren Buffet has done so. Others did so before him. It’s a recurring theme in history. But it needed saying again, because that is exactly what is happening now.
What has this to do with LVMH? That’s easy to explain. Those at war need a uniform. High-end fashion and consumption provides that uniform of privilege that those engaging in this class war are determined to maintain.
Norwegian economist Thorstein Veblen coined the term ‘conspicuous consumption’ to explain such behaviour more than a century ago. He was right to do so. Of course, the products sold are not worth what is paid for them. That is why LVMH is so profitable. It is the uniform that is being bought and the signalling that it provides as to which side you are on that matters.
And who are those committed to luxury opposed to? All those who work for a living, and most especially those who work for the state.
That those same working people happen to be the foundation of the wealth of the wealthy is something that has probably never occurred to them. No doubt they think themselves ‘self-made’, as one caller to yesterday’s programme did. But they are not. And it is for the good of society as a whole, the wealthy included, that wealth has to lose the class war those with wealth are waging.