If Blankfein wants a bigger bonus, he should stock up on Ed Hardy.

Posted on by Guy Fox and tagged , , , , , , , , . Bookmark the permalink.

About 10 years ago there was a debate in Canada about whether Canadian NHL teams should receive a subsidy to be able to compete with big-market American teams. As soon as somebody came up with the soundbite “no millions for millionaires”, the plan promptly died. This makes the phrase a remarkable innovation that you should keep handy in your pocket like that expired condom you’ve been carrying around since high school. If you think that not wanting to subsidize your local cultural elite is a standard reaction, I’ll bet $245 billion in TARP money that you’re wrong.

The Economist reports that a couple of Dutch researchers have studied the effects designer labels have on others’ perception. Specifically, they found that students dressed up in Tommy Hilfiger or Lacoste clothes with prominent labels were ranked as higher status and wealthier than others wearing cheaper labels or none. Although a couple of their experiments didn’t involve money, one asked people what the contrived fashionistas should receive in salary after a fake job interview, one had the students canvassing door-to-door for charity, and one had volunteers playing a variant of the ultimatum game with bonafide €0.10 coins against pictures of more or less fashionably dressed opponents. Those wearing designer clothes got 9% more salary, nearly twice as much charity and 36% more trust in the game.

The explanation provided is that more expensive clothes represent a costly signal. In other words, buying expensive and ostentatious things works like a down payment on your admission fee to the Good-ol’ boys club. Anyone who’s tried to enjoy an evening at the opera in track pants and flip-flops will get this immediately.

Where it gets perverse is in how the researchers structured the study and in how their (partial) test subjects reacted. They chose the brands precisely because they exude an air of luxury (at least in a third-world country like Holland) and are known to be expensive. Money is default proxy for prestige, status, quality, and virtue. It’s perhaps not too surprising that the respondents seemed to equate status and wealth, but giving people who can ostentatiously display their wealth more charity money than people in greater apparent need is kinda like sending bibles to the Vatican, no? Having committed the cardinal sin of not having read the original study, I can’t say if it ever came up, but what would the canvasser have replied if a donor had answered the door and said, “Gee, I don’t know how much I should donate. What did you give?”. The same logic applies to the salary and trust experiments: the more you seem to have, the more people are likely to give you. Millions for millionaires, indeed.

Although they don’t go overboard, the Economist, if not the researchers themselves, makes an argument for why this occurs using evolutionary biology. The gist is that since humans don’t have any built-in costly signals, like a peacock’s tail, we artificially adorn our monkey bodies with, well, pants.

This puts the study in the same ballpark as “SM seeks F, ovulating”, “SM seeks meaty F”, “No SM seeks well-aged F, unless they’re loaded” and “SF seeks Chubby Checker” (major hat tip, TLP). But it’s hard to imagine how human genes, the posts on evolution’s blog, could develop a preference for little cartoon crocodiles on the left breast pocket and for things like Burmese giraffe imposters. If these latter examples are undeniably culturally selected, there’s at least reason to believe that the others are too – at least until evolutionary biologists can spell out the reason in four letters, ACGT. You heard it here first, though not from me: once we got consciousness, all bets were off.

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7 Responses to If Blankfein wants a bigger bonus, he should stock up on Ed Hardy.

  1. Phire says:

    I wonder how much of it, especially in the instance of charity canvassing, has to do with people subconsciously wanting to impress and please these people they perceive to be of higher status. Society seems to attach greater value to rich philanthropists, as though their donations and contributions had greater value because we assume that people who are better off are misers or something. So if a canvasser bearing the hallmarks of higher socioeconomic status came to collect donations, I would wager that more than just “you look rich, I should give you more money” is being triggered.

    • Pastabagel says:

      I think it goes to the idea of “deservingness” (to coin a monstrous word). If these luxury brand products are objects of desire for the people being tested, then seeing those objects in the possession of someone else triggers a question of whether they deserve it in order to assuage the anxiety formed over the real person who has it and the test subject who doesn’t. This does not happen in ads because we do not perceive the images as reality but rather as ideals-what we become through the consumption of the product.

      But we want to believe that the person wearing the brand-name shirt deserves it, so much so so that their wearing it becomes the signal that they are the kind of person who deserves to have it. The only other way to reconcile it is to conclude that the brand isn’t really all that special. But this does not happen. If you see a slob in a luxury-brand shirt, you do not conclude that the luxury brand is for slobs, rather you wonder how a slob came to possess that luxury branded shirt.

      So, the result is wanting to get some proxmity to this person who has earned the shirt. The proximity can be physical or social (I’ll hire him) or it can be psychological (I donated to the same cause, so we share that.)

      Just my theory.

      • ThomasR says:

        Regarding the charity canvassing, I would think that it’s related to trust. If a person dressed like he has a lot of money asks me for a donation, I’m more likely to believe that it will actually be used to help people. i.e. “He obviously doesn’t need my money, so he must be legit”

  2. Comus says:

    So basically the brand works? In a way that expensive clothes make you look like a person who can afford expensive clothes? That is what brands aim at; to distance themselves from actual objects into a signifier of an abstraction. You want to please the higher status person, and you assume this demands more. You give him 20€ and he/she stuffs it up his/her ears and burns it on a regular basis. It must not be worth that much for him/her. But when a “regular guy” asks for money, you know that 10€ is ample. You don’t have to convey the emphasized nonchalance of throwing away cash to level up. So it’s basically just climbing the social latter with expected/projected stupidities. You join in with the rich by saying “see, I don’t care about money either, I have money-a-plenty”, with the middle-class as “here’s some money, you know as well as me that it is straight off of my next down-payment for the plasma, but have it anyway, as I’m a decent human being”, and with the poor with “I only have some change and while I remember what it’s like to be scarce on the money I can also remember spending it on booze”.

    It’s about relating. That’s why I get long looks at the Shostakovich concert and have to descend further up into the hood.

  3. CubaLibre says:

    Maybe farfetched, but I wonder how much of it has to do with authoritarian fear. Until recently, the marks of status belonged not to those with money, but with political power (now you might say that Venn diagram is verging perilously close to a single circle). When the dude with the livery of the State (tax collector, sheriff, etc.) shows up at your door reminding you that it’s your civic duty to hand money over to the King, how eager are you to pay up – especially if he’s casually holding a bardiche in the other hand?

  4. Guy Fox says:

    I’d just like to thank the posting elves who reformatted the html to embed the YouTube video (if there’s anyway to set up the submission form so that it admits posts written with ScribeFire or, dare I dream, Word with html links, I’d be much obliged). Thanks also for thoughtful comments, y’all.

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