Nothing Exceeds Like Excess
By Robert J. Samuelson
Wednesday, November 5, 2003; Page A29
Ours is an era of excess. It's everywhere -- in my case, just around the corner. Someone is building a three-floor "mansion." An architect friend estimates the floor area at about 6,600 square feet, roughly triple the size of a median new home (2,100 square feet in 2002). The roofline seems about 8 to 10 feet above the surrounding homes, which look like shacks next to their new neighbor. The question about this home is not why people spend so much to build something so oversized but what they are going to do with all the space. A similar question applies to Dick Grasso, the former head of the New York Stock Exchange, and his $140 million pay package. What is he going to do with all the money?
The answer is that the excess itself is the point. We Americans are constantly grasping for symbols of superiority: something to show everyone that we've done better than those around us. In an ever-richer society, the pursuit of these badges of success has become progressively harder because yesterday's accepted markers of distinction have become today's mass merchandise. You have to build a home two or three times what you need just to make sure everyone receives the message. You have to negotiate a pay package so boisterously lavish to guarantee that people take notice.
Becoming a millionaire once signified great wealth. No more. Millionaires are too ordinary. In 2001 almost 200,000 Americans reported income of $1 million or more, says the Internal Revenue Service. There were 2.4 million with incomes from $200,000 to $1 million. By wealth, the figures are even larger. From 1989 to 2001, the share of Americans whose net worth (assets minus liabilities) exceeds $1 million rose from 3 percent to 7 percent, says the Federal Reserve. That's 7 million households.
It's not enough to be a millionaire if the idea is to have stuff or do things that most of your pals and peers don't or can't -- to set yourself apart. It is this impulse, and not simply sheer greed, that ignited the feverish competition among corporate executives for outlandish compensation packages, including Grasso's. The search for exclusivity is made more exhausting because the spread of wealth has reduced the power of yesterday's status symbols.
In 1980 only 4.5 percent of Americans bought "luxury" cars -- mainly Cadillacs and Lincolns, says J.D. Power and Associates, a market research firm. So far in 2003, "luxury" vehicles (including Lexuses, other new brands and Mercedeses and BMWs) account for 10.5 percent of sales. It's not just cars. A book by Michael Silverstein and Neil Fiske, "Trading Up -- The New American Luxury," shows how middle-income Americans pay premium prices for furniture, wines and other goods that convey taste and achievement. Renovated kitchens are popular. A typical makeover runs $58,000, say Silverstein and Fiske. Granite countertops alone ($15,000) exceed the total cost after inflation of a 1950s kitchen ($9,000).
With the trappings of success so common, the race for distinction grows more frustrating. Competition intensifies for things that seem naturally scarce -- say, prestigious college degrees. There's a stampede to get into Ivy League schools and their kin. Harvard receives about 20,000 applications for 1,600 spots; Amherst, 5,200 for 400 openings. New status symbols emerge for those with stupendous sums. The Post reports that the very wealthy are buying small ownership shares of professional sports teams, mainly for the prestige value. Nancy House, 54, of San Francisco bought a 1 percent interest in the Giants, citing the "coolness factor," which included -- said The Post -- "fourth row seats, mingling with players in spring training, jetting with the team in its Boeing 767."
Paradoxically, the engine of American excess is the preoccupation with equality. In a society that supposedly provides everyone an equal chance, people want to show that they've made the most of their chance. In 1787 an American writer observed that "the idea of equality breathes through the whole and every individual feels ambitious, to be in a situation not inferior to his neighbor." Silverstein and Fiske interviewed Jake, a $50,000-a-year construction worker, an avid golfer who spent $3,000 to buy an elite set of titanium-tipped Callaway golf clubs. Said Jake: "The real reason I bought them is that they make me feel rich. You can run the biggest company in the world . . . but you can't buy any better clubs than these. When I kick your butt on the course, I feel good. I feel equal."
A democratic society constantly destroys preserves of privilege. Yesterday, golf clubs; tomorrow, the Ivy League. Even the status of a Harvard degree is eroding. Popular demand for more prestigious schools is increasing the supply of prestigious schools. Colleges improve; the publication of rankings raises reputations. Thirty years ago, Washington University in St. Louis was an also-ran; in the latest U.S. News ranking, it's tied at ninth with Dartmouth, ahead of Columbia, Cornell and Brown. Sooner or later, most sports teams will sell stock to the public; another privilege will vanish.
As old privileges expire, great exertions are needed to invent new ones. Keeping up with the Rockefellers and Gateses is a stressful and often self-defeating struggle. Grasso got his money and lost his reputation. But the quest is deeply rooted in the culture. In 25 years, all the homes in my neighborhood -- which now seem normal and adequate -- will have been demolished for bigger replacements that will then seem normal and adequate. People will need something else to impress. It will drive them to excess.