Veblen good

And by having cooperatives that can sell products to the wealthy, to the luxury market, workers can pull money down from the upper classes rather than having it captured by business owners and shareholders who only pay workers as little as they can get away with.

Further, luxury goods are far less sensitive to price competition thanks to the Veblen effect, where the fact that something is expensive is part of why it's worth buying.

Consider, for example, the Louis Vuitton Moet Hennessy conglomerate, the largest luxury goods company in the world, owned by billionaire Bernard Arnon, accounting for almost a quarter of the global luxury market in 2023.

LVMH shifted production from France to Bulgaria, leaving scores of French workers destitute, which allowed them to pay their Bulgarian workers $30 per jacket that they would then sell for $1,000.

Oh,

no. It's a Veblen Good.

What's that?

It's a Veblen good.

It's valuable because it's expensive.

Yes, yeah.

Exactly.

And that leads us to something called the Veblen effect, named after economist Thorstein Veblen.

It's the idea that for certain goods, people actually want the price to be high.

Demand increases as price increases because the high price itself is part of the appeal.