It is time to talk about the Joneses and why we bother trying to impress with them. I am of course talking about the effect known as “keeping up with the Joneses” or the tendency to ‘spend money you don’t have to buy things you don’t need to impress people you don’t like’.
I generally like the Dutch more than my German compatriots because I find them more relaxed, more egalitarian, and blessed with a better sense of humor. That said, who would ever think of studying the subject of conspicuous consumption among the notoriously stingy Dutch? I mean, these folks are rather unpopular in southern Europe as they go on holiday with their mobile homes fully packed with foodstuffs, so that they never need to set a foot in a local restaurant. You get an invite to coffee in a home in the Netherlands and then they bring out a tin of pastry, which is opened quickly so that everybody can take exactly one cookie, after which the tin is quickly packed away. Calvinist frugality is so much a religion that you'd be shunned if you didn't have your curtainless ground level living room lit every evening, so that the neighbors can see if you bought a new TV set or some other extravaganza. Who knows, volunteer work might have some special status as a secret way of breaking out of the confines of the strict middle-class mindset.
This is very interesting, especially as I've long thought that cultural traits driving spending propensities are under-studied in economics, perhaps because uncomfortable cultural stereotypes inevitably emerge.
How much of the suspected divergence between Dutch and American households could be that it's harder to actually show off one's conspicuous consumption in the former? In Amsterdam, rich people lash antique cargo crates on the bikes they use to pedal heir children to public school. In America, rich people park huge power boats in their driveways and send their kids to private school. Similarly, more Americans go to church, which is a philanthropy outlet preferred by many possibly because it's more conspicuous than, say, volunteering at a local soup kitchen. And do the Dutch even have soup kitchens at which to volunteer? One thing I've noticed living in Germany is that volunteering and charitable giving appears lower than in America because people are a) a bit tapped out from high income taxes which already assumed (and expected) to pay for a lot of social services, and b) there's lower perceived social utility (even generously funding a Stiftung is probably viewed more as a tax dodge than selfless generosity).
I also wonder how the expected divergence might be less the result of behavioral differences (although it's important to remember that it's not "Going American" https://en.wikipedia.org/wiki/Going_Dutch ;-) ), and more about the latter starting at a higher wealth level and/or living in a more dynamic economy shown to grow faster in the past and expected to continue growing faster in the future.
Don't forget death! Only 16% would defend the country.
Despite our publicly professed high morals, frequently used index finger and our love of all things democratic since we lost our empire and became a powerless nation (and thus had no skin in the game anymore), my guess is that the highest minded individuals (let me stress individuality) would be the first to get the hell out. Didn't feminists only became activist over women in the military when conscription ended?
The funny thing is that in case of attack wel educated progressives would most likely be defended by those whom they find so utterly disgusting in times of peace: people who vote on the right side. I.e...disinfo-polluted populists!
'A climate denier just died for his country! What a fascist!
Oh wait...
God, this thinking stuff is complicated'
On volunteering:
Despite the lacklustre willingness of educated Dutch individualists to defend what they have (or what other Dutch have), do not underestimate the age old collective nature of Dutch culture.
The NL are EU champs volunteering (the Danes are next). 57% of Dutch volunteer sometimes and 31% regularly. While most southern and eastern European countries score below average and the Poles volunteer the least.
In the NL, higher educated people from the provinces are more likely to volunteer, while unemployed and retired people are below average. Political preference doesn't matter. Both Dutch and Danes said that personal satisfaction is the most important. In FR and DE solidarity was the no1 motivation. The EU must be so happy with what for Italians, Slovenians, Cypriots and Maltese mattered most: 'the strengthening of the EU's fundamental solidarity values'.
And why would we doubt that?
Finally, p 23: young Europeans are more opposed to a longer working life than 60 yos, while Dutch and Danes where most in favour overall (though it may be that the Dutch were thinking 'other people working longer'...Just saying).
I generally like the Dutch more than my German compatriots because I find them more relaxed, more egalitarian, and blessed with a better sense of humor. That said, who would ever think of studying the subject of conspicuous consumption among the notoriously stingy Dutch? I mean, these folks are rather unpopular in southern Europe as they go on holiday with their mobile homes fully packed with foodstuffs, so that they never need to set a foot in a local restaurant. You get an invite to coffee in a home in the Netherlands and then they bring out a tin of pastry, which is opened quickly so that everybody can take exactly one cookie, after which the tin is quickly packed away. Calvinist frugality is so much a religion that you'd be shunned if you didn't have your curtainless ground level living room lit every evening, so that the neighbors can see if you bought a new TV set or some other extravaganza. Who knows, volunteer work might have some special status as a secret way of breaking out of the confines of the strict middle-class mindset.
This is very interesting, especially as I've long thought that cultural traits driving spending propensities are under-studied in economics, perhaps because uncomfortable cultural stereotypes inevitably emerge.
How much of the suspected divergence between Dutch and American households could be that it's harder to actually show off one's conspicuous consumption in the former? In Amsterdam, rich people lash antique cargo crates on the bikes they use to pedal heir children to public school. In America, rich people park huge power boats in their driveways and send their kids to private school. Similarly, more Americans go to church, which is a philanthropy outlet preferred by many possibly because it's more conspicuous than, say, volunteering at a local soup kitchen. And do the Dutch even have soup kitchens at which to volunteer? One thing I've noticed living in Germany is that volunteering and charitable giving appears lower than in America because people are a) a bit tapped out from high income taxes which already assumed (and expected) to pay for a lot of social services, and b) there's lower perceived social utility (even generously funding a Stiftung is probably viewed more as a tax dodge than selfless generosity).
I also wonder how the expected divergence might be less the result of behavioral differences (although it's important to remember that it's not "Going American" https://en.wikipedia.org/wiki/Going_Dutch ;-) ), and more about the latter starting at a higher wealth level and/or living in a more dynamic economy shown to grow faster in the past and expected to continue growing faster in the future.
Almost 20 years ago, Citibank put out a report that was so controversial it resulted in the author being fired https://1drv.ms/b/s!At9od58qwtRejLZlRb06p5ClkiJ1ag , which concluded:
"Outlandish it may sound, but examined through the prism of plutonomy, some of the
great mysteries of the economic world seem to look less mystifying. As we showed,
there is a clear relationship between income inequality and low savings rates: the rich
are happy to run low or negative savings given their growing pool of wealth. In turn,
those countries with low/negative household savings rates tend to be the countries
associated with current account deficits.
So why should we equity strategists care about this? Well simply, because the issue that
most consistently seems to vex our equity client base, from a top down perspective, is
the U.S. current account deficit, the associated lack of savings, and the build-up of debt.
It is both intellectually fashionable and elegant, apparently, to attack “the crazy
American consumer, and his/her overspending”.
This has of course, from a portfolio perspective, been a costly trade to run-with, over the
last 10 years. Those “crazy American consumers” seem to be in rude health. Their
imminent demise has been a long time imminent.
If we are right, that the rise of income inequality, the rise of the rich, the rise of
plutonomy, is largely to blame for these “perplexing” global imbalances. Surely, then, it
is the collapse of plutonomy, rather than the collapse of the U.S. dollar that we should
worry about to bring an end to imbalances. In other words, we are fretting unnecessarily
about global imbalances. In turn, the risk premium on equities is probably too high.
Secondly, we hear so often about “the consumer”. But when we examine the data, there
is no such thing as “the consumer” in the U.S. or UK, or other plutonomy countries.
There are rich consumers, and there are the rest. The rich are getting richer, we have
contended, and they dominate consumption."
'Dutch people...are famously relaxed about life'.
Don't forget death! Only 16% would defend the country.
Despite our publicly professed high morals, frequently used index finger and our love of all things democratic since we lost our empire and became a powerless nation (and thus had no skin in the game anymore), my guess is that the highest minded individuals (let me stress individuality) would be the first to get the hell out. Didn't feminists only became activist over women in the military when conscription ended?
The funny thing is that in case of attack wel educated progressives would most likely be defended by those whom they find so utterly disgusting in times of peace: people who vote on the right side. I.e...disinfo-polluted populists!
'A climate denier just died for his country! What a fascist!
Oh wait...
God, this thinking stuff is complicated'
On volunteering:
Despite the lacklustre willingness of educated Dutch individualists to defend what they have (or what other Dutch have), do not underestimate the age old collective nature of Dutch culture.
The NL are EU champs volunteering (the Danes are next). 57% of Dutch volunteer sometimes and 31% regularly. While most southern and eastern European countries score below average and the Poles volunteer the least.
In the NL, higher educated people from the provinces are more likely to volunteer, while unemployed and retired people are below average. Political preference doesn't matter. Both Dutch and Danes said that personal satisfaction is the most important. In FR and DE solidarity was the no1 motivation. The EU must be so happy with what for Italians, Slovenians, Cypriots and Maltese mattered most: 'the strengthening of the EU's fundamental solidarity values'.
And why would we doubt that?
Finally, p 23: young Europeans are more opposed to a longer working life than 60 yos, while Dutch and Danes where most in favour overall (though it may be that the Dutch were thinking 'other people working longer'...Just saying).
https://www.europarl.europa.eu/pdf/eurobarometre/2011/juillet/04_07/rapport_%20eb75_2_%20benevolat_en.pdf
American volunteering pre covid was at 30% and now 23%
https://americorps.gov/about/our-impact/volunteering-civic-life