Posh nightclubs, Porsches and the politics of envy

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#1
Perhaps I am right in saying there is more conspicuous consumption nowadays? The politics of envy will become more and more pronounced in time to come.

The Straits Times
www.straitstimes.com
Published on Apr 07, 2013
Posh nightclubs, Porsches and the politics of envy


By Robin Chan Political Correspondent

I entered Pangaea last year, dressed in what I thought was a pretty sharp outfit - a Uniqlo T-shirt and jeans I had bought, all for under $80.

Yet, I felt like I had committed a crime, as the girl at the door of what is billed as Singapore's most exclusive club scanned me from top to bottom with distinct disapproval.

When I was eventually let through, it was as if I had cheated St Peter to slip through the Pearly Gates. The music was thumping. The women had squeezed into their tightest dresses. The bottle service was in full swing.

Known for its trademark safari theme, Pangaea had that feel all right - I was in a reserve of the well-heeled, where the privileged could preen and frolic in their exclusive and natural habitat.

Owner Michael Ault has called the club the ultimate house party for the world's glitterati - where exclusivity and top service come at an exorbitant premium. It can be, at the same time, severely discombobulating and invigorating. Am I in New York, London, or Las Vegas?

People who can afford it go there to have a good time, as at any club, bar or house party. But Pangaea will tell you it does it better.

A recent article in the Wall Street Journal's wealth magazine stirred up discussion with its vivid depiction of excess at this club. As someone who has had a peek inside, I would warn people not to take it at face value.

The majority of its clientele appeared to have more in common with me than the Eduardo Saverins of the world - most seemed firmly middle-income, salaried professionals likely to spend on a few glasses of gin and tonic, rather than a 10-bottle train of Cristal champagne.

In fact, the total hit for a mere mortal like me that night was less than $80 - for a $40 cover charge and two drinks. My bank account lived to fight another day.

Yet, while the picture painted by the Journal wasn't exactly what greeted me inside the club, the depiction can serve as an important warning sign. There may not yet be this parallel world of the super rich that is unrecognisable to the ordinary Singaporean but there are signs that the country is developing a new type of wealth.

It is a wealth marked by a penchant for extreme, in-your-face conspicuous consumption.

Singapore has always had its share of the very rich but they did not care to flaunt it. People like banker Wee Cho Yaw and the late real estate tycoon Ng Teng Fong lived modest lives in public despite accumulating huge fortunes in their lifetimes.

The implicit understanding, embodied also by our political leaders, was for the rich and powerful to lead a lifestyle of prudence and simplicity.

One extreme example is former prime minister Lee Kuan Yew, whose spartan lifestyle included wearing the same jacket for 20 years.

That sensitivity preserved a sense of unity in society despite rapid income growth and the rise in the number of millionaires.

But somewhere along the line, that changed. As Singaporeans wanted more excitement and more opportunities in the city, it also attracted different people, lifestyles and values into society. The Government decided to push Singapore as a wealth management hub. It built the integrated resorts. Then more clubs and bars opened, the waterfront at Fullerton was developed and Marina Bay has been transformed into a dazzling spectacle.

In a decade, Singapore went from frumpy to sexy.

But with that emerged also a newer and younger generation, with an obsession for more "bling". Where Singapore's old money was frugal, low-key and respectful, Singapore's new money is more flashy and arrogant. It is at risk of unleashing a potion of envy that can poison any society.

British philosopher John Stuart Mill described envy as "the most anti-social and odious of all passions". Envy knows no reason, it is a visceral and irrational feeling that no amount of charts and statistics can temper. Even if the income gap were to narrow with aggressive measures to lift wages at the bottom, increase productivity and raise taxes at the top, I wonder if it will be enough to temper the feelings of envy that could come from this flaunting of wealth.

A study published in the Journal of Economic Psychology on conspicuous consumption and its effects on satisfaction found that as the number of Ferraris and Porsches increased in Switzerland, it caused a decrease in the level of income satisfaction. That means people felt less happy with themselves just by seeing more expensive cars on the road. Now imagine that in a dense city state of five million people.

Much more destructive than the economics of inequality is the politics of envy.

chanckr@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
Singapore is starting to remind me of ancient Babylon at its hey days. If only policy makers are well read and bother to wind back the IR spurred economic revolution which is near impossible by now.

(07-04-2013, 07:18 AM)Musicwhiz Wrote: Perhaps I am right in saying there is more conspicuous consumption nowadays? The politics of envy will become more and more pronounced in time to come.

The Straits Times
www.straitstimes.com
Published on Apr 07, 2013
Posh nightclubs, Porsches and the politics of envy


By Robin Chan Political Correspondent

I entered Pangaea last year, dressed in what I thought was a pretty sharp outfit - a Uniqlo T-shirt and jeans I had bought, all for under $80.

Yet, I felt like I had committed a crime, as the girl at the door of what is billed as Singapore's most exclusive club scanned me from top to bottom with distinct disapproval.

When I was eventually let through, it was as if I had cheated St Peter to slip through the Pearly Gates. The music was thumping. The women had squeezed into their tightest dresses. The bottle service was in full swing.

Known for its trademark safari theme, Pangaea had that feel all right - I was in a reserve of the well-heeled, where the privileged could preen and frolic in their exclusive and natural habitat.

Owner Michael Ault has called the club the ultimate house party for the world's glitterati - where exclusivity and top service come at an exorbitant premium. It can be, at the same time, severely discombobulating and invigorating. Am I in New York, London, or Las Vegas?

People who can afford it go there to have a good time, as at any club, bar or house party. But Pangaea will tell you it does it better.

A recent article in the Wall Street Journal's wealth magazine stirred up discussion with its vivid depiction of excess at this club. As someone who has had a peek inside, I would warn people not to take it at face value.

The majority of its clientele appeared to have more in common with me than the Eduardo Saverins of the world - most seemed firmly middle-income, salaried professionals likely to spend on a few glasses of gin and tonic, rather than a 10-bottle train of Cristal champagne.

In fact, the total hit for a mere mortal like me that night was less than $80 - for a $40 cover charge and two drinks. My bank account lived to fight another day.

Yet, while the picture painted by the Journal wasn't exactly what greeted me inside the club, the depiction can serve as an important warning sign. There may not yet be this parallel world of the super rich that is unrecognisable to the ordinary Singaporean but there are signs that the country is developing a new type of wealth.

It is a wealth marked by a penchant for extreme, in-your-face conspicuous consumption.

Singapore has always had its share of the very rich but they did not care to flaunt it. People like banker Wee Cho Yaw and the late real estate tycoon Ng Teng Fong lived modest lives in public despite accumulating huge fortunes in their lifetimes.

The implicit understanding, embodied also by our political leaders, was for the rich and powerful to lead a lifestyle of prudence and simplicity.

One extreme example is former prime minister Lee Kuan Yew, whose spartan lifestyle included wearing the same jacket for 20 years.

That sensitivity preserved a sense of unity in society despite rapid income growth and the rise in the number of millionaires.

But somewhere along the line, that changed. As Singaporeans wanted more excitement and more opportunities in the city, it also attracted different people, lifestyles and values into society. The Government decided to push Singapore as a wealth management hub. It built the integrated resorts. Then more clubs and bars opened, the waterfront at Fullerton was developed and Marina Bay has been transformed into a dazzling spectacle.

In a decade, Singapore went from frumpy to sexy.

But with that emerged also a newer and younger generation, with an obsession for more "bling". Where Singapore's old money was frugal, low-key and respectful, Singapore's new money is more flashy and arrogant. It is at risk of unleashing a potion of envy that can poison any society.

British philosopher John Stuart Mill described envy as "the most anti-social and odious of all passions". Envy knows no reason, it is a visceral and irrational feeling that no amount of charts and statistics can temper. Even if the income gap were to narrow with aggressive measures to lift wages at the bottom, increase productivity and raise taxes at the top, I wonder if it will be enough to temper the feelings of envy that could come from this flaunting of wealth.

A study published in the Journal of Economic Psychology on conspicuous consumption and its effects on satisfaction found that as the number of Ferraris and Porsches increased in Switzerland, it caused a decrease in the level of income satisfaction. That means people felt less happy with themselves just by seeing more expensive cars on the road. Now imagine that in a dense city state of five million people.

Much more destructive than the economics of inequality is the politics of envy.

chanckr@sph.com.sg
Reply
#3
Happened to catch an episode of Neil Humphreys' 'Return to the Sexy Island' where the nightlife was depicted last night.

I did not get the name of the exclusive club that Neil was invited to but it was supposed to be a 'by invitation only' club. The owner/operator (29years old) claimed that each chair in their super VIP area with its 'communist russian theme' cost in excess of 100k. For paying ~10k each for a bottle of Moet champagne, one would get an angmoh model-like waitress striding/dancing, while holding your bottle with a fire-work stick. After popping it, a beret of singaporean sweet young things sitting beside u, are ready to have a toast (and most probably finish up your existing supply, making sure that you will order more champagne) and cater to maintaining your VIP feeling as the night goes on...

WOW
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#4
Wanton excess will almost always lead to destruction.
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#5
I have a somewhat different perspective from the writer.

I am not too sure that the "penchant for extreme, in-your-face conspicuous consumption", "an obsession for more 'bling'" and "flashy and arrogant" is a characteristic of Singapore's new money and wealth.

While there are no doubt some new money and wealth that do behave as such, based on my own circle of friends (and backed up by studies like "The Millionaire Next Door") I would say these are more characteristics of the off-springs of wealth or, more likely, wealthy wannabes.

The former is the responsibility of their parents and I will not comment further.

The latter is interesting since their aim when indulging in in-your-face conspicuous consumption IS to create envy in their peers. From their perspective, there is no politics of envy, envy itself is the point. The politics arises only from the perspective of those who observe their behavior and either aspire to it as well or do not condone it.

I do not want to start an open ended debate as to whether the behavior of both actor and observer is right or wrong. But I do want to point out that the wealth builder also has a part to play.

If the wealthy wannabes want to go into debt to buy Prada which allows Prada in turn to commission KingsMen Creatives to do their store outfitting for them and hence pay dividends to (us) their shareholders, is this okay from a wealth builder's perspective? Conversely, if the vulnerable poor want to go into debt to gamble at the IR and generate return for Genting's shareholders, is this okay from a wealth builder's perspective? Finally, if a middle class family dreams of being amongst the landed gentry by buying a shoebox condo and is willing to sign on the dotted line and commit themselves to 30 years of slavery to the bank but this generates returns for Roxy Pacific's shareholders, is this also okay from a wealth builder's perspective?

There are no easy answers. But as for myself, I will try to instill what I hold dear in my family, advise my friends when asked for my opinions, choose who I am comfortable with as my acquaintances, and continue to profit from the behavioral mistakes of all.

“If your happiness depends on what somebody else does, I guess you do have a problem.” ― Richard Bach
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#6
From the perspective of the flow of capital moving from rich all the way down to poor, I would say it would benefit society overall. But the problem is that there is uneven distribution of wealth.

Even if we use the example of Prada, a customer walks in and spends $10,000 on an item. Perhaps half of the $10,000 goes to rental (landlord benefits), another 20% goes to utilities (utility company benefits) and remaining 30% goes to salaries and the owner. EVen then this $3,000 to salaries is spread out amongst many staff and eventually each may end up with a smaller piece, depending on their remuneration structure. In the absence of fair minimun wages, the poor and rank/file staff may never be able to keep up with the high cost of living and improve their lot in life.

So it would depend on how the spending actually benefits society at large and how the wealth gets distributed. The problem now is that a lot of the lavish spending gets "trapped" by taxes to the Government and to corporations which suck most of it away, leaving very little for the under-class. Hence, this exacerbates the income gap.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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