Bro almost discovering Marx, Veblen and the others
They reference Veblen in the very first footnote.
The Fancy Rug Dilemma
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Re: The Fancy Rug Dilemma
#12I can’t speak for the rugs you viewed, but some products take literally hundreds of man hours to make. My partner recently picked up some fine crochet bedspreads. These intricate bedspreads each must have consumed multiple weeks of labour. I understand this is also true of hand crafted Chinese and Afghan rugs - around a month per square metre for an Afghan. In contrast, those basketball shoes you collect are mass pro…
Creating a single basketball shoe from an existing template takes three hours. Coming up with that design and all the associated expenses (marketing etc) plus the tooling needed to produce the shoe consumes much more labor and accounts for the vast majority of the shoe's cost. Hand-woven rugs, on the other hand, are largely unique in design and created by a single person.
Silk hand-woven rugs need no marketing at all in order to fetch absurdly large amounts of coins.
Re: The Fancy Rug Dilemma
#13It’s thirteen years old now (2012), but there’s a fascinating old Forbes article (from when, I think, it was a respectable publication) about the cross-pollination between Palo Alto’s rug dealers, and Palo Alto’s venture capitalists:
https://www.forbes.com/sites/victoriabarret/2012/03/21/silic...
Re: The Fancy Rug Dilemma
#14What is the downward sloping arrow in those charts?
Re: The Fancy Rug Dilemma
#15This is not really Veblen situation. A lot of these are primarily money laundering outfits, the artificially high prices, are simply a means of converting cash into bank deposits. Similar schemes exist in art, sculptures, and jewelry. There are some mom and pop type stores that are legit and some of the money goes to actual artists who make these but the ones in Palo Alto (or similarly unattainable rent neighborhood…
What kind of dirty money do you believe these stores are laundering? What kind of illegal businesses/schemes are the source of it?
Re: The Fancy Rug Dilemma
#16Is there an unspoken assumption here that value is absolute and deviations pathological?
I can't understand how heirloom quality is abstract any more than say color scheme.
How is valuing a sneaker collection more abstract than valuing, say, minimalism or utilitarianism?
I've re-read the post multiple times, but I'm clearly missing something basic to allow comprehension.
Re: The Fancy Rug Dilemma
#17Sure, let's take a rug as an example. I don't think there is one breakpoint. I think there are a set of axis of quality you invest into, roughly sequentially, as you go up the price scale of objects:
- $50 - Something rug-shaped exists
- $100 - Durability
- $200 - Materials
- $500 - Comfort and design
- $1000 - Basic craftsmanship
- $2000 - Refinement of craft
- $5000 - Artistry & identity
- $10000 - Tradition
- $20000 - Mastery
- $50000 - Rarity/historical importance
- $100000+ - ?
Because most people don't cross-shop $20k rugs and $200 rugs, most people are focused on one or two aspects around their personal budget. The essayist mentioned being amazing by the craftsmanship and artistry (see scale above). A broke college student might just want something that holds up in their dorm room and see what materials it's made out of and comfort as meaningless and abstract. And a billionaire shopping for a rug for their office might take everything other than rarity/historical importance as a given and just be thinking about that.
I think there is a large cognitive bias to consider everything you can easily afford "tangible and important improvements" and everything you can't as "abstract"!
Re: The Fancy Rug Dilemma
#18This is not really Veblen situation. A lot of these are primarily money laundering outfits, the artificially high prices, are simply a means of converting cash into bank deposits. Similar schemes exist in art, sculptures, and jewelry. There are some mom and pop type stores that are legit and some of the money goes to actual artists who make these but the ones in Palo Alto (or similarly unattainable rent neighborhood…
That’s internet lore. Nobody is buying a $50,000 rug with cash. If any of the people were, the rug guy wouldn’t have a place to bank. Reality is you can move a few rugs a month and make ok money.
There’s a market for these types of businesses. In my area there’s a dude with a company that sells and maintains $50-150k+ Christmas light and decoration displays. He has ~100 customers. The men’s clothing place I go to is a group of guys hanging out having a good time - it doesn’t look busy, but their 4-5 customers a day are dropping $3-10k/visit.
Stores like that are “laundering” money like the rest of the commercial real estate world… by playing games with various (legal) tax schemes. They are no more illegal than a Hampton Inn or AirBnb guy.
Real money laundering places are restaurant/bar, laundromats, arcades, and low income residential.
Re: The Fancy Rug Dilemma
#19Earlier quoted context omitted.
Creating a single basketball shoe from an existing template takes three hours. Coming up with that design and all the associated expenses (marketing etc) plus the tooling needed to produce the shoe consumes much more labor and accounts for the vast majority of the shoe's cost. Hand-woven rugs, on the other hand, are largely unique in design and created by a single person.
Silk hand-woven rugs need no marketing at all in order to fetch absurdly large amounts of coins.
“Silk” is the marketing.
Re: The Fancy Rug Dilemma
#20This is not really Veblen situation. A lot of these are primarily money laundering outfits, the artificially high prices, are simply a means of converting cash into bank deposits. Similar schemes exist in art, sculptures, and jewelry. There are some mom and pop type stores that are legit and some of the money goes to actual artists who make these but the ones in Palo Alto (or similarly unattainable rent neighborhood…
That’s internet lore. Nobody is buying a $50,000 rug with cash. If any of the people were, the rug guy wouldn’t have a place to bank. Reality is you can move a few rugs a month and make ok money. There’s a market for these types of businesses. In my area there’s a dude with a company that sells and maintains $50-150k+ Christmas light and decoration displays. He has ~100 customers. The men’s clothing place I go to is…
Tax schemes are there to save taxes using legalism loopholes, these places are happy to pay the taxes on "cash" purchases to bank the proceeds. Nobody is buying 50K rugs is correct, most of the transactions are self reported for the purpose of paying taxes and depositing funds. IRS and fincen are not in it together, in fact IRS encourages people to pay taxes on ill gotten gains.