Following on from my posting "42. Hitherto, a Ricardian free trader", Kirsty Rodwell writes

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Have you considered buildings as status goods more generally? Moving on to the late 16th and 17th century when a lot of new gentry houses were being constructed there was much discussion of the type of building which would most appropriately reflect a person's status. Again there was a hierarchy and too much show was frowned on (probably a result of Protestant sensibilities).

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Buildings are certainly a potent status symbol and usually very accurately reflect the status of individuals or families, but I'm using the term "Status Good" in a particular way. I'm defining it as a consumer good which, once introduced, is then reproduced in largely unchanged form, passing through all the socio-economic strata until everybody owns it. Some Status Goods may take years, or decades, or even generations to become widely purchased although more often than not in modern times, Status Goods can sweep through a population very quickly. A Status Good, although rare to start with -- and thus very potent as a status symbol -- needs to be capable of being supplied or manufactured in large numbers later, its price reducing significantly in order to be purchasable by successively poorer customers. As it becomes more widely purchased, then it gradually ceases to be a Status Good but just an ordinary item of everyday life. Apart from food (but sometimes including some types of foods), everything -- but everything -- we normally buy and possess has been a Status Good at some time in the past.

Why Status Goods are so special is that, in modern parlance, they carry very high profit margins when newly introduced, create a 'bow-wave' of further and wider investment and are thus a powerful stimulus to further production but also to the wider economy. In an economy of 0% growth (assuming we can measure it accurately enough to allow for inflation or deflation of currency) then the only opportunity for profits are efficiencies of production of existing items. In an economy of, say, 0.5% or more growth, then we can be certain that there is a newly emerging Status Good involved within it somewhere which is responsible for the marginal gain in general prosperity. The 'bow-wave' concept here is somewhat akin to the Keynesian notion of a 'multiplier' as it rippples outwards, gradually becoming weaker as profit margins decline because of competitive production and supply.

Kirsty's question suggests that "Status Good" too ambiguous a term and I need a better one. I cannot think what this could be for the moment. I'm open to suggestions.

Much the same applies to the rather awkward term, "Initiatory Class", that I've been using. In hunter-gatherer times, it would have been the alpha-males who would have possessed Status Goods first, in later times it would have been royalty or the aristocracy, in the recent past it would have been what was called the "leisure class". Today I'm suggesting that the Initiatory Class comprise those who are usually known as the "meritocracy", or the "chattering classes" or the "trend-setters". These individuals usually have high enough incomes to afford new high-priced goods and usually have close associations with the media -- and are thus able to disseminate their tastes effectively and widely. Once again, I'd like to hear of any suggestions.