Home » Opinion » Chinese Views
Our Gilded Age begins to emerge
By John Gong |
May 12, 2011, Thursday
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Print Edition
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China has become the world's second-largest market for luxury goods, according to a report jointly released by Bain & Company, a global business consulting firm, and an Italian luxury goods manufacturers' association recently.
To get a feel for this, one only needs to look at the Shanghai Auto Show last month, which closed with a dazzling sales record of imported luxury cars made by Rolls-Royce, Bentley, Ferrari, Lamborghini and other auto makers.
The most eye-catching car at the show was perhaps Aston Martin's US$7.2 million 1-77, which is especially outfitted for the Chinese market. Five were on display at the show, and each one was sold before the event even opened.
China is well on its way to its version of the Gilded Age. According to HIS Automotive, a US-based market research firm, 727,227 high-end cars were in use in China last year, including 1,000 Ferraris and 120 Aston Martins. The figure is expected to reach 909,946 this year, and 1.6 million in 2015. Aside from cars, flying right in the public's face is the conspicuous expenditures on many other luxuries like jewelry and designer items.
This kind of ostentatious flaunting of wealth and the "buy-it-only-if-priced-high" mentality popular among the rich and famous in China contrasts sharply with the per-capita disposable income standing at around 15,000 yuan last year. This touches upon the public's sensitivity about the nation's ever-widening gap between the rich and the poor.
Emasculation
Moral condemnation of luxury of course is nothing new. Plato saw luxurious living as unhealthy, fostering effeminacy, and corrupting both individuals and society. In ancient Greece, men who lived a life of luxury were thought to become soft and emasculated.
The Romans inherited much of the Greek teachings in response to Rome's perceived decadence, and took a step further by institutionalizing anti-luxury measures. The Romans' first sumptuary laws, for example, regulated women's dress (no colored robes), possession of gold, and expenditures on feast days, which included detailed limitations on the number of non-family guests, the value of silverware as well as banning foreign wine.
Catholicism condemned luxury as a personal sin of pride. Protestantism interpreted luxury as immoral and dissolute. Puritanism castigated luxury for its wanton waste of resources that would otherwise be available for the needy and the poor.
In China under Communist rule, luxury was one unforgivable sin of the bourgeoisie that was totally eradicated during the "cultural revolution" (1966-1976).
Historically the tide against luxury started to turn thanks largely to the birth of modern economics. Adam Smith contributed greatly to the shift in public opinion regarding luxury with the assertion that all things considered "opulent and civilized" were superior to "poor and barbarous." This by the way sounds awfully close to the Chinese phrase "to be rich is glorious."
In modern times the critique of luxury based on the moral or religious arguments of natural order and life is somewhat abated by the theory of economic development. Again quoting Adam Smith, "individual greed and acquisitiveness were necessary prerequisites for the stimulation of the economy."
But all said and done, luxury is fundamentally a free man's personal choice. I surely deplore the fact that someone wrote a US$7 million check for an Aston Martin 1-77 sports car, instead of perhaps sending it to Japan's earthquake-tsunami relief effort.
But I would defend the guy's right to do so, even with the shopping behavior of today matching the most florid ones of the Gilded Age during the late 19th and early 20th century.
Gilded Age is a term coined by Mark Twain when he co-authored a book about what he believed to be the growing corruption in America after the Civil War. This is the period of time when one of the wealthiest generations in history, names like John Rockefeller, J.P. Morgan, and the Vanderbilt brothers, made America the apex of affluence and the pinnacle of posh.
Shopping mania
What we are seeing of the rich's shopping mania in today's China pales in comparison to those folks' unbridled extravagance. The big shots of the Gilded Age routinely threw ball parties worth millions of dollars, which is still an expensive undertaking for the rich in China after all.
Many years ago I visited Newport and saw for myself those resplendent residences along the beach, which by the way were called "cottages" by their owners at the time.
I am citing America's Gilded Age not to justify the rich's self-indulging excesses in China, and I am not on their payroll. My real purpose is to advise them against spending beyond means. We Chinese are perpetually fixated on the face thing, and it is not uncommon for people in China to spend a large portion of their net-worth on non-real properties as ridiculous as a car. And even for real estate, there is a lesson to be learned.
Biltmore in Ashville, North Carolina, is a monster mansion sitting on 125,000 acres with 255 rooms occupying 16,258 square meters. After six years of construction, which started in 1895, and US$6 million (US$120 million in today's dollars), it remains the largest private house in America today. No private houses in China come even close to one quarter of its size, I believe.
The owner of the house, George Vanderbilt, was a very rich man worth US$260 million in today's dollars, when he started this building project. Ten years after the house was completed, he died prematurely at the age of 52. By that time, his net worth had dwindled to just US$23 million.
I congratulate all the rich folks in China for moving up to the opposite of poverty.
But luxury is not the opposite of poverty.
(The author is an associate professor of economics at the Beijing-based University of International Business and Economics. His email: johngong@gmail.com)
To get a feel for this, one only needs to look at the Shanghai Auto Show last month, which closed with a dazzling sales record of imported luxury cars made by Rolls-Royce, Bentley, Ferrari, Lamborghini and other auto makers.
The most eye-catching car at the show was perhaps Aston Martin's US$7.2 million 1-77, which is especially outfitted for the Chinese market. Five were on display at the show, and each one was sold before the event even opened.
China is well on its way to its version of the Gilded Age. According to HIS Automotive, a US-based market research firm, 727,227 high-end cars were in use in China last year, including 1,000 Ferraris and 120 Aston Martins. The figure is expected to reach 909,946 this year, and 1.6 million in 2015. Aside from cars, flying right in the public's face is the conspicuous expenditures on many other luxuries like jewelry and designer items.
This kind of ostentatious flaunting of wealth and the "buy-it-only-if-priced-high" mentality popular among the rich and famous in China contrasts sharply with the per-capita disposable income standing at around 15,000 yuan last year. This touches upon the public's sensitivity about the nation's ever-widening gap between the rich and the poor.
Emasculation
Moral condemnation of luxury of course is nothing new. Plato saw luxurious living as unhealthy, fostering effeminacy, and corrupting both individuals and society. In ancient Greece, men who lived a life of luxury were thought to become soft and emasculated.
The Romans inherited much of the Greek teachings in response to Rome's perceived decadence, and took a step further by institutionalizing anti-luxury measures. The Romans' first sumptuary laws, for example, regulated women's dress (no colored robes), possession of gold, and expenditures on feast days, which included detailed limitations on the number of non-family guests, the value of silverware as well as banning foreign wine.
Catholicism condemned luxury as a personal sin of pride. Protestantism interpreted luxury as immoral and dissolute. Puritanism castigated luxury for its wanton waste of resources that would otherwise be available for the needy and the poor.
In China under Communist rule, luxury was one unforgivable sin of the bourgeoisie that was totally eradicated during the "cultural revolution" (1966-1976).
Historically the tide against luxury started to turn thanks largely to the birth of modern economics. Adam Smith contributed greatly to the shift in public opinion regarding luxury with the assertion that all things considered "opulent and civilized" were superior to "poor and barbarous." This by the way sounds awfully close to the Chinese phrase "to be rich is glorious."
In modern times the critique of luxury based on the moral or religious arguments of natural order and life is somewhat abated by the theory of economic development. Again quoting Adam Smith, "individual greed and acquisitiveness were necessary prerequisites for the stimulation of the economy."
But all said and done, luxury is fundamentally a free man's personal choice. I surely deplore the fact that someone wrote a US$7 million check for an Aston Martin 1-77 sports car, instead of perhaps sending it to Japan's earthquake-tsunami relief effort.
But I would defend the guy's right to do so, even with the shopping behavior of today matching the most florid ones of the Gilded Age during the late 19th and early 20th century.
Gilded Age is a term coined by Mark Twain when he co-authored a book about what he believed to be the growing corruption in America after the Civil War. This is the period of time when one of the wealthiest generations in history, names like John Rockefeller, J.P. Morgan, and the Vanderbilt brothers, made America the apex of affluence and the pinnacle of posh.
Shopping mania
What we are seeing of the rich's shopping mania in today's China pales in comparison to those folks' unbridled extravagance. The big shots of the Gilded Age routinely threw ball parties worth millions of dollars, which is still an expensive undertaking for the rich in China after all.
Many years ago I visited Newport and saw for myself those resplendent residences along the beach, which by the way were called "cottages" by their owners at the time.
I am citing America's Gilded Age not to justify the rich's self-indulging excesses in China, and I am not on their payroll. My real purpose is to advise them against spending beyond means. We Chinese are perpetually fixated on the face thing, and it is not uncommon for people in China to spend a large portion of their net-worth on non-real properties as ridiculous as a car. And even for real estate, there is a lesson to be learned.
Biltmore in Ashville, North Carolina, is a monster mansion sitting on 125,000 acres with 255 rooms occupying 16,258 square meters. After six years of construction, which started in 1895, and US$6 million (US$120 million in today's dollars), it remains the largest private house in America today. No private houses in China come even close to one quarter of its size, I believe.
The owner of the house, George Vanderbilt, was a very rich man worth US$260 million in today's dollars, when he started this building project. Ten years after the house was completed, he died prematurely at the age of 52. By that time, his net worth had dwindled to just US$23 million.
I congratulate all the rich folks in China for moving up to the opposite of poverty.
But luxury is not the opposite of poverty.
(The author is an associate professor of economics at the Beijing-based University of International Business and Economics. His email: johngong@gmail.com)
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