Cambridge Business Association
Luxury Fever
Book

Luxury Fever

Money and Happiness in an Era of Excess

Robert H. Frank
Princeton UP, 1999
Buy book or audiobook

Read or listen offline

Amazon Kindle
  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×

Editorial Rating

8

Qualities

  • Innovative
  • Eye Opening
  • Well Structured

Recommendation

Every reader should consider this book critically. Author Robert H. Frank’s thesis is that runaway consumption of extravagant luxuries is a major problem in American society. This concept may have seemed more valid in 1999, at the height of the dot-com bubble, when the book first rolled off the presses, than it does in 2004. The intervening recession has done a lot to rearrange household consumption priorities. Yet one need only look at the houses, cars and home entertainment systems on the market to recognize that the thesis has not entirely lost all merit. For the more muscular theoretical foundation of this premise, readers are referred to the superior 100-year-old classic Theory of the Leisure Class Thorstein Veblen. Even in the shadow of that light, Frank’s observations about the pressures to consume - especially the evidence that he marshals for an evolutionary compulsion to "keep up with the Joneses" - merits notice. While the author’s proposed remedy of a consumption tax is sure to be controversial, getAbstract.com believes this book deserves to be read and appreciates its unusually stimulating, accessible writing on economics.

Summary

The Odd Thing about Buying

The author bought a propane grill about 20 years before writing this book. After two decades of use it was showing signs of age. Parts were rusted and the switches weren't working. He didn't know where to get it repaired, and he figured repairs would cost more than the original $89.95 price tag. So he went shopping for a grill. He was surprised to find that gas grills now sell for thousands of dollars and are replete with features and functions that hardly anyone but a professional chef could need. Why would a weekend barbecue cook spend $5,000 for a grill?

Grills aren't the only symptom of the luxury fever now gripping America. The very rich spend extravagantly on homes, pouring millions into architectural monstrosities full of costly gewgaws. Then the less rich emulate them. House size has doubled since the 1950s, and prices have more than doubled. The rich may spend hundreds of thousands of dollars on a single car — say, a Ferrari or a Rolls — and easily a $100,000 on a luxury SUV. The poor also spend heavily on cars. The average car price has gone up 75% in just 10 years, to $22,000.

Contrary to what one might think, people...

About the Author

Robert H. Frank is Godwin Smith Professor of Economics, Ethics and Public Policy at Cornell University. He is co-author, with Philip J. Cook, of The Winner-Take-All Society.

Comment on this summary