Raffi Melkonian asks — as relayed by my colleague Tyler Cowen — “When can median income consumers afford the very best?”
Tyler offers a list of some of the items in the modern, market-oriented world that are as high-quality as such items get and yet are easily affordable to ordinary people. This list includes iPhones, books, and rutabagas. Indeed, this list includes nearly all foods for use in preparing home snacks and meals. I doubt very much that Bill Gates and Larry Ellison munch at home on foods — such as carrots, blueberries, peanuts, and scrambled eggs — that an ordinary American cannot easily afford to enjoy at home.
This list includes also non-prescription pain relievers, most other first-aid medicines and devices such as Band-Aids, and personal-hygiene products such as toothpaste, dental floss, and toilet paper. (I once saw a billionaire take two Bayer aspirin — the identical pain reliever that I use.) This list includes also gasoline and diesel. Probably also contact lenses.
A slightly different list can be drawn up in response to this question: When can median-income consumers afford products that, while not as high-quality as those versions that are bought by the super-rich, are nevertheless virtually indistinguishable — because they are quite close in quality — to the naked eye from those versions bought by the super-rich?
On this list would be most clothing. For example, an ordinary American man can today afford a suit that, while it’s neither tailor-made nor of a fabric as fine as are suits that I suspect are worn by most billionaires, is nevertheless close enough in fit and fabric quality to be indistinguishable by the naked eye from expensive suits worn by billionaires. (I suspect that the same is true for women’s clothing, but I’m less expert on that topic.)
Ditto for shoes, underwear, haircuts, corrective eye-wear, collars for dogs and cats, pet food, household bath towels and “linens,” tableware and cutlery, automobile tires, hand tools, most household furniture, and wristwatches.
(You’d have to get physically very close to someone wearing a Patek Philippe — and you’d have to know what a Patek Philippe is — in order to determine that that person’s wristwatch is one that you, an ordinary American, can’t afford. And you could stare at that Patek Philippe for months without detecting any superiority that it might have over your quartz-powered Timex at keeping time.)
Coffee. Tea. Beer. Wine. (There is available today a large selection of very good wines at affordable prices. These wines almost never rise to the quality of Chateau Petrus, d’yquem, or the best Montrachets, but the differences are often quite small and barely distinguishable save by true connoisseurs.)
Indeed, the more one ponders this question relayed by Tyler, the more one suspects that the shorter list would be one drawn up in response to this question: When can high-income consumers afford what median-income consumers cannot?
Such a list, of course, would be far from empty. It would include private air travel, beachfront homes, regular vacations in Tahiti and Davos, private suites at sports arenas, luxury automobiles, rooms at the Ritz, original Picassos and Warhols. (It would, by the way, include also invitations to White House dinners and private lunches with rent-creating senators, governors, and mayors.)
But I’ll bet that this latter list would be shorter than one made up in response to the question relayed by Tyler combined with one drawn up in response to the question that I pose above in the third paragraph (call this list “the combined list”).
And whether shorter or not, what other germane characteristics might distinguish the items on this last list from the combined list?
A version of this post first appeared at Cafe Hayek.
Donald J. Boudreaux
Donald Boudreaux is asenior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University and, a former FEE president.