Conspicuous Consumption

As capitalist economies grow, generally, so does the difference between the rich and the poor. This difference is clearly visible in one of the fastest growing economies in the world: India.

The country's richest man, Mukesh Ambani of Reliance Industries, is building a new home in Mumbai, "Antilla," that will have 60 stories, a helipad, a health club, a home theatre, a glass-fronted apartment for guests, six floors of parking, and expected to cost around $982 million. In addition to Mr. Ambani, it will house his mother, wife, three children, and 600 full-time staff.

One of the things that used to be common in South Asia was that the rich used to hide their money. This was particularly true for India where protectionist measures used to limit the kinds of things the rich could buy. Now, with the economies growing around six to nine percent every year and the economies opening, conspicuous consumption is on the rise.

Mr. Ambani's flashiness is slightly different from that of Vijay Mallya, the chairman of the UB Group., India's biggest maker of whiskey and beer in India. He calls himself the "King of Good Times, wears wears gold necklaces and a diamond bracelet, surrounds himself with film stars, and holds liquor-soaked parties on his 165-foot yacht, once owned by Elizabeth Taylor."

He also uses this image to sell alcohol in a country where the spirits market has gone from $10 billion in 2002 to over $15 billion in 2006 (Euromonitor). People are interested in emulating his lifestyle and want to live the flashy, exciting life that he leads.

However, this consumption, by both gentlemen, raises the question of the disparity between the rich and the poor. If the people cannot get water or electricity, then how will they feel about the houses and yachts? How will they react? Will they steal and take? The West is used to these differences but in countries where there was no conspicuous consumption until very recently, how will this translate?