Sunday, January 07, 2007

Money, Envy, And Why New Yorkers Are Crazy

For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. (Timothy 6:10)

It may seem strange for an arch-capitalist and entrepreneur to decry the love of money, but please bear with me.

I recently read a series of articles in New York Magazine called Money: New York's Have-Lots and Have Nots. While these articles are well-written and entertaining, they left me filled with fear and loathing, convinced that there is something terribly wrong with the American relationship with money.

The problem with American culture isn't a love of money per se, it is a love of consumption. Article after article described in loving detail the gloriously narcissistic spending of New Yorkers (spending, which to my eye, looked absolutely insane).

Alex and Michelle, both 27, are in almost identical financial situations—similar salaries, similar spending habits—and are seemingly all the closer for it. When they go shopping together, they try on everything, pretending they can afford it all but purchasing just one or two items. Both guessed they spend about $500 a month on clothes and beauty products. Alex jokes about how her savings account isn’t really for putting money away, “it’s just sort of like delayed spending.” Michelle—who’s single and happy to live in her Soho studio for many more years—doesn’t think twice about this lifestyle. “Unfortunately, I have good taste” is how she put it, as serious as she was sarcastic.

As my friend, personal finance guru Ramit Sethi might put it, WTF? 27-year-olds spending $6,000 per year on clothes and beauty products?

Or how about this little gem of a passage:

You went to the ATM two days ago and suddenly you’re there again, trying to remember how it went so fast (oh, yeah, that . . . $46 you blew on vodka-and-sodas). Our spending patterns, if we think about them, tend toward the irrational—we drop . . . $200 on jeans, then agonize over whether to take a cab or the subway home. And we wonder, How does everyone else do it?

Or how about our obssession with the super-rich, such as this secret nightclub for models and billionaires:

Deep in the wilds of Chelsea, there is a door. The door has a screen, and the jet-black eye of a promoter behind that screen, peeping out to gauge your social viability. Are you a model? Or a billionaire? It will be hard to get in otherwise.

My point is not to decry this spending (though I must admit, this really makes me sick). I'm not one of those nutjobs who believe that people should donate any income above $30,000 a year and give away all their possessions. As far as I'm concerned, whether you made your money or inherited it in a trust fund from your robber baron ancestors, it's YOUR MONEY, and you should be free to do whatever you like with it, whether that's giving it to starving African children or blowing it on overpriced cocktails in a vain attempt to bed attractive young women.

Rather, it's to warn you, the entrepreneur, against consuming this sort of consumerist tripe.

I'm a pretty Zen kind of guy. I know that extrinisic aspirations like being rich, famous, and good-looking don't bring happiness, even when fulfilled. I know that wealth beyond a certain level (say, $50,000 per year) does not bring increased happiness. As Daniel Gilbert puts it in Harvard Magazine:

“The difference between an annual income of $5,000 and one of $50,000 is dramatic. But going from $50,000 to $50 million will not dramatically affect happiness. It’s like eating pancakes: the first one is delicious, the second one is good, the third OK. By the fifth pancake, you’re at a point where an infinite number more pancakes will not satisfy you to any greater degree. But no one stops earning money or striving for more money after they reach $50,000.”

Yet despite all these fine beliefs and intentions, I found myself thinking things like, "Damn, I'm 32 years old, and I don't make $700,000 per year."

And if I'm thinking it, what might other readers be thinking?

I've often joked that the two things that have hurt American women more than any other are women's magazines and "Sex in the City." You couldn't design a more penicious and orgiastic glorification of spending and consumption, or an entertainment more perfectly adapted for inducing feelings of inadequacy and greed.

Yet while New York Magazine appeals to a more upscale crowd, it is all too similar to its consumerist cousins in its effects. This is consumer porn at its worst, and while I enjoyed reading the articles, I felt the same afterwards as if I had eaten a giant bag of Doritos: Full of calories, self-loathing, and some kind of artificial and probably carcinogenic substance that nature never intended.

I can't help but wonder if one of the reasons that Silicon Valley has been so successful as a high-tech hub (in comparison to New York) is the lack of the same consumerist culture. After all, the richest guy I know, a Google billionaire, still lives in the same rented apartment in Mountain View as when he was a grad student. And Priuses have largely replaced the Ferraris so common in the 1980s.

Yet even in this Valley of Heart's Delight, the creeping spectre of consumption holds sway. New players like Nick Denton's Valleywag bring a tabloid-style emphasis on the lifestyles of the rich and semi-famous, while old-school Gentry Magazine continues to be a purveyor of the wonders of the seven-car garage.

Of course, I'm not going to call for the abolition of our celebritard culture. After all, it's not as if there's some giant media conspiracy to use the Brad Pitt-Angeline Jolie saga to distract us from unconstitutional shennanigans (or is there?). To quote the immortal Walt Kelly, we have met the enemy and he is us. The National Enquirer, Cosmopolitan, and New York Magazine exist because we buy them. And to tell you the truth, I'm not ready to give up my Weekly World News bat-boy fix either.

All I'm suggesting is that you, the entrepreneur and discerning reader, be aware of what's going on when you read the latest about Larry's yacht or yet another Yelp party. Sometimes, you just have to know when to put down that bag of Doritos.

9 comments:

Foobarista said...

Nice article.

As an old techie who actually grew up here, one of my tests for when the Valley is due for a correction is when "beautiful people watcher" magazines emerge, and Palo Alto gets infested with people looking painfully and uncomfortably fashionable. The Valley is many things, but "hip" in the New York/LA sense of the word isn't one of them. When it looks "hip", it's a sign that a bunch of coolios are shortly on their way B2C, aka Back to Cleveland.

Erik said...

I spent 14 years working in the Valley (1989-2003) there were up times and down times. I live in Maine now. I find the Bay Area ragging on NYC for conspicuous consumption is a bit of the pot calling the kettle black.

OK, 27 year old New Yorkers spend $6K per year on clothes and beauty care, but on the other hand, they don't own cars. So they're not spending $10K a year on car payments and insurance and gas.

DH said...

"And Priuses have largely replaced the Ferraris so common in the 1980s."

I'm sure I read somewhere that there's still something like a 1 year waiting list for a Ferrari (and probably even longer for other exotic cars).

Good article though. Definitely agree about the salary thing: after a certain point, it makes little difference, though I'd argue it's a lot higher than $50k ;-)

David Stern said...

You know we're off kilter a bit when Valleywag starts publishing the "Girls of Google" wall calendar.

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cee said...

good article. i can't comment on how ny compares to san fransisco, but i was really incensed by the ny magazine article, because it really set in stone a lot of false perceptions of new yorkers. people (especially people who have recently moved to ny) have this idea that everything in nyc is-and-must-be expensive and extravagent. and ny mag definitely were wanting in the sample population....those six? people were more archetypal than they were a realistic range of new yorkers. let's not forget about the lots new yorkers who are somewhere between "penny wise" and "pound foolish", and not making 700K. they seem to have left out the variety that most in new york live by.
im 23, and dont make very much, and way under the 50K mark. i live in a nice (undeniably nice, not nyc hole in the wall nice) apartment, with roommates in brooklyn. i buy expensive clothes sometimes, but don't shop often. i eat at nice restaurants, but cook my breakfast/dinner most days(i'm working on bringing lunch), and forgo buying coffee/tea, opting to make it myself. and i don't spend all day counting my pennies.

it's really a bit of give and take, and mostly common sense. the "sex and the city" lifestyle is not attainable all the time for most, but it can be within reach for some things, sometimes, and for almost anybody. and i was a huge fan of the show, but did realize that it gave people false ideas about new york in general.

lastly, i follow my parents two bits of wisdom: no matter how little you make, always save something, and always go on vacation...anywhere :-)

Chris said...

Erik,

I totally agree that the Valley is a hotbed of conspicuous consumption. But New York is even worse.

I have two small children, and I worry about them internalizing the materialistic ethos of the Valley.

Apparently I'm selfish, however, because I don't intend to move!

Chris said...

David,

No, you'll know we're off kilter when they start publishing a "Studs of VC" beefcake calendar, with a photo of a shirtless and oiled Mike Moritz.

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