Is display of wealth really vulgar?

Nita Ambani’s 50th birthday bash and the reported spending of Rs220 crore became a conversation point on social networking sites last week. Comments had shades of bemusement, disdain, sarcasm, socialism or just plain jealousy.

Were people surprised at how much money India’s richest family has? I don’t think so. Did they think the celebration would have been any less grand after the Airbus she was gifted earlier?

Perhaps not. I think what caught the twitter class by surprise was the reported spend on the event.

Had the media covered only the elements of grandeur without getting into the economics, twitterati would have been warmer in their wishes for the country’s first bhabhi.

But why should we be surprised? In fact, this is nothing but a testimony to the larger trend that I call a ‘bigger, better bang’ syndrome among the super-rich.

During a study undertaken among Mumbai’s super-rich for a luxury real estate project earlier this year, I discovered that size does matter for them. A big house in SoBo, more rooms, bigger bathrooms and balconies are all in the wish list of the billionaire club. The underlying theme was an expansion of desire and expectation.

In a study conducted seven years ago which focused on what constitutes “the good life”, the elite focused on material goods and luxuries, along with quality time spent with family. The good life now has expanded far more materially than emotionally.

A mere ‘two or three luxury cars’ has a downscale image, as people have shifted to at least two luxury SUVs for self, a luxury sedan for the wife, a car for each of the children, another for household chores and one for the pets. The trend includes fully-equipped gyms, personal trainers, fancy computer equipment, “professional-quality” everything – from cookware to sports equipment – and perhaps most strikingly of all, the “trophy” second house that’s different from a vacation home. Seems like ‘needs’ have upscaled disproportionately and the definition of the “good life” continues to expand resulting in a ‘bigger, better bang’ effect.

Noted economist Thorstein Veblen’s “The Theory of the Leisure Class” postulates that in affluent societies spending becomes the vehicle through which people establish their social position. In the 17th century, Italian nobles built opulent palaces with beautiful facades and, within those facades, placed tiles engraved with the words “Pro Invidia” (meaning, to be envied). For centuries, aristocrats passed laws to forbid the nouveaux riches from copying their clothing styles. The rich spent conspicuously to secure a place in the social hierarchy. Veblen would perhaps have termed the Ambani family’s grand invitation as an attempt to establish its top position in the social hierarchy.

But why just blame the rich for this phenomenon? Have we all not behaved similarly? We don’t call ourselves super-rich, but ‘upper middle class’. The parties we throw for our children have magicians and tattoo artists; women ensure they do not repeat their designer dresses for every party they attend; and men boast of a collection of imported liquor and cigars.

Many of us are continually comparing our lifestyle and possessions to those who we want to be like. The scales may be different, but our lifestyle aspirations are formed by different points of reference. In the old days, our neighbors set the standards for what we had to have. Today, the comparisons we make are no longer restricted to those in our general earnings category. We watch the way television families live, we read about the lifestyle of celebrities and other public figures we admire, and we consciously and unconsciously assimilate this information. A person is more likely to choose as a “reference group” people whose incomes are three, four, or five times his or her own. The result is that millions of us have become participants in a national culture of upscale spending for the ‘bigger, better bang’.

Some of us may say ‘no’ to spending so much on a mere birthday party. But surprise, surprise, you are the one who may have spent far more disproportionately on landmark events than Mr Ambani ever did. After all, this party cost a mere 0.17% of his net worth. His house, which again was a target of much criticism, is just 5% of his net worth. And the bourgeoisie in us spends a whopping 15-20% of our net worth on buying a house or getting married.

Now who is being vulgar here?

(The writer is managing consultant of The Key Consumer Diagnostics Pvt Ltd, a Mumbai-based qualitative research company)