Sam Vimes 'Boots' Theory of Socio-Economic Unfairness (2022)

The boots theory is a concrete way of expressing the risk of ruin, which is the principle advantage of wealth (though our society has layered on many others): the rich can afford to take more risk, and consequently enjoy more reward. A poor person who buys the $50 boots has a much higher risk of coming up short for something else, and that lapse may have disproportionate consequences. So they go for the cheap boots, which end up costing them more in the long run, trapping them in an endless cycle.

Another way to consider it is through the lens of meritocracy. Consider two poker players of equal skill. Have them play each other until one has lost everything. Run this competition over and over, starting each player with a random stack. Over many trials, the player starting with the bigger stack will win in proportion to the ratio of their stack to their opponent's. Given a large enough ratio, this wealth advantage can begin to overcome greater and greater advantages in skill on the part of their opponent.

In the US, the ratio of the wealth of the top 10% to the wealth of the median has risen from 5.8x in 1963 to nearly 10x in 2022. In the same period, the ratio of the top 1% to the median has risen from 35x to 70x. And the effective advantage is probably much higher, as this calculation does not take into account liquidity: most of a median family's wealth is in their family home.

https://apps.urban.org/features/wealth-inequality-charts/

I think you're right on the luxury brands being less durable.

To address the second airplane example, we really have to go through all that you're buying. Namely: more leg space, faster airport queue processing, more luggage, better in-flight service. Do I value these at 3x the cost? Maybe yes.

This is what happens when vendors recognize the boots theory and build it in to their approach. If “more expensive is better,” just price the same item into a higher price bracket and pocket the difference. If you want to be fancy, rebadge it a bit.

I’m just amazed that they don’t even bother to use alternate product pictures.

> The first class passengers are effectively paying 3x as much for the same outcome

Not the same outcome. They show up at their destinations fresh from a good night's sleep, having showered at the lounge. Their back doesn't hurt from trying to sleep upright in a tiny seat or schlepping a heavy rucksack.

If you have enough money you are ok with paying to get those outcomes.

I'm a big fan of the Harbor Freight Pareto Principle

If you're a hobbyist or doing something at home, a lot of the times you're gonna buy some random tool and only use it a few times. 80% of the time, the Harbor Freight knockoff is going to be good enough. If you use a tool so much that it breaks, then it's time to spring for the expensive and high quality version.

However you may want to go straight to the nice version for things that have safety implications (skip the infamous Harbor Freight jack stands)