In the fall of 1987 Mercedes-Benz released its 1988 560 SEL sedan. The car was beautiful, full of gadgets including digital stereo, cassette player, leather steering wheel, and anything else the well-to-do of the time could seemingly want. For the safety conscious the car had anti-lock brakes (ABS), along with driver and front passenger airbags. The SEL’s seats adjusted electrically, as did its side mirrors. For buyers willing to spend a bit more, electric seat heaters were an option. Car & Driver and other auto enthusiast magazines wrote about the SEL in superlatives. The car retailed for over $68,000.
In 2006 Ford Motor Company discontinued its Ford Taurus. At the time Saturday Night Live’s comedy writers described the Taurus (this is a slight paraphrase) as “the car for people who’ve given up.” Eventually Ford brought back the automobile associated with average. Interesting there is that a $31,000 2018 Taurus has 4-wheel ABS, dual front side mounted airbags, front and rear head airbags, dusk-sensing headlights, a blind spot warning accident avoidance system, rear parking sensors and a rear-backup camera (to avoid dings), and a heated steering wheel. Electric seats are a given.
Back in 2006, only the higher-end suites at the Four Seasons in Austin, TX (the city’s most luxurious hotel) had flat-screen televisions. The regular rooms still had the box-shaped version. But by 2015 flat-screen tvs were standard not just in rooms at the Four Seasons, but also in most any Motel 6.
Air travel? Those rich enough to fly used to travel with flip flops, but only in their bags. They dressed up for what was a rare luxury. Nowadays people walk on to planes in flip flops, shorts, tank tops, and other garments associated with highly casual dress. Flying is what we all do now.
Buy Silver at Discounted Prices
All of this is a reminder of what readers of this column know well: “luxury” is an ephemeral concept. Today’s obscure bauble of the superrich is tomorrow’s common good. In a growing economy prices are falling all the time. They are because investment is the driver of growth, and investment is all about producing more for less.
What’s also crucial when it comes to falling prices is the “venture buyer.” And while the truth about “venture buyers” may cause the heads of the overly sensitive to explode, venture buyers are rich. Often wildly rich. So rich that they can spend enormous sums on goods and services that aren’t broadly used, or understood. These buyers are crucial to progress because they can uniquely test the products put on the market by entrepreneurs and businesses. If they prove useful, great. If they’re duds, the rich are out substantial sums. That’s ok. Figure that they’re superrich.
Still, the goods and services deemed worthy by venture buyers act as a signal to the entrepreneurs and businesses, and the signal is clear: the innovators capable of mass-producing what superrich venture buyers uniquely enjoy will similarly become superrich themselves. There. It’s been said. Great wealth, the kind of wealth that causes inequality to soar, is frequently a function of entrepreneurs democratizing access to the goods and services formerly enjoyed by the rich alone.
All of which brings us to the endless emotion emitted by the extremely sensitive about so-called “net neutrality.” Up front, it should be said that the mere discussion of this topic speaks to the extraordinary confusion that is increasingly the norm among journalists and pundits. Simply put, there’s no such thing as a free good. We the people enjoy the internet and WiFi only insofar as private companies invested in the proverbial “pipes” that enable broad usage. “Net neutrality” was all about giving everyone – large and small – equal access to the internet. Ok, but that’s a violation of property rights. Plain and simple. End of discussion. Those who own the “pipe” should be able to do whatever they want with it, including charging different prices for access to the pipe.
