Minimalism & Luxury
Minimalism is defined as the use of the fewest and barest essentials or elements, as in the arts, literature, or design. Luxury is defined as something that is an indulgence rather than a necessity. If you translate minimalism and luxury into economic terms, they become words associated with needs and wants. So it is obvious, minimalism is the minimal need while luxury is the maximal want.
Many people might not want to associate themselves with neither minimalism nor luxury because they might consider themselves moderate. I believe people are normally distributed along the entire spectrum ranging from minimalism to luxury.
What I really interested in is if the distance between minimalist and the luxury is constant over the long history of time. In other words, if the society or the civilization has progressed over the human history, the distance between minimalist and luxury has increased as a function of the development of civilization. It is my first expectation that the distance over the past few decades has widened very much between the rich and poor and within the poorest and richest groups.
It is obvious that luxury is a relative term. Some consumer products might be considered as the essential needs to the rich. The same products can be considered as luxury items to the poor. So it is more interesting to think about the minimalism lifestyle and the luxury lifestyle for the consumers with the same income level. For example, for the average income Americans, what is the distance between the minimalism and luxury consumptions?
In the other day, I was thinking about the modern society as a consumer society. The entire economy is mostly consumer economy. In the United States, the consumer spending is about 70% of the total GDP. So if we can understand the consumer behavior in the spectrum defined between minimalism and luxury, we can almost figure out the economic behavior of the entire society.
Again, let’s use the average American as an example. If the moderate are living in the balanced lifestyle with a balanced income and spending, then the minimalism lifestyle will produce savors while the luxury lifestyle will produce interest-payers.
The capitalistic society depends almost entirely on the increasing number of interest-paying consumers. In the past few years, people are defaulting on their mortgage loans and other consumer loans. This has produced huge problems for banks and other financial institutions because banks and insurance companies are the main tools for capitalists to exploit the interest-paying consumers.
Let’s use residential housing as an example. The average price of a residential home is about $200,000. Let’s assume the mortgage interest rate is 6.3% for a 30-year loan. The annual mortgage payment is $15,000. The property tax rate, using Texas as an example, is usually around 2.5%. That is about $5,000 per year. The total payment between mortgage and property taxes is $20,000. For the entire working 30-years, the total payments would amount to about $600, 0000. That is exactly three times of the original home purchase price. So basically the banks (which collect mortgage payments) and the local government (which collects the property taxes) have made a handsome $400,000 out from the average Texan.
CHRISRAO/饶旭东
Many people might not want to associate themselves with neither minimalism nor luxury because they might consider themselves moderate. I believe people are normally distributed along the entire spectrum ranging from minimalism to luxury.
What I really interested in is if the distance between minimalist and the luxury is constant over the long history of time. In other words, if the society or the civilization has progressed over the human history, the distance between minimalist and luxury has increased as a function of the development of civilization. It is my first expectation that the distance over the past few decades has widened very much between the rich and poor and within the poorest and richest groups.
It is obvious that luxury is a relative term. Some consumer products might be considered as the essential needs to the rich. The same products can be considered as luxury items to the poor. So it is more interesting to think about the minimalism lifestyle and the luxury lifestyle for the consumers with the same income level. For example, for the average income Americans, what is the distance between the minimalism and luxury consumptions?
In the other day, I was thinking about the modern society as a consumer society. The entire economy is mostly consumer economy. In the United States, the consumer spending is about 70% of the total GDP. So if we can understand the consumer behavior in the spectrum defined between minimalism and luxury, we can almost figure out the economic behavior of the entire society.
Again, let’s use the average American as an example. If the moderate are living in the balanced lifestyle with a balanced income and spending, then the minimalism lifestyle will produce savors while the luxury lifestyle will produce interest-payers.
The capitalistic society depends almost entirely on the increasing number of interest-paying consumers. In the past few years, people are defaulting on their mortgage loans and other consumer loans. This has produced huge problems for banks and other financial institutions because banks and insurance companies are the main tools for capitalists to exploit the interest-paying consumers.
Let’s use residential housing as an example. The average price of a residential home is about $200,000. Let’s assume the mortgage interest rate is 6.3% for a 30-year loan. The annual mortgage payment is $15,000. The property tax rate, using Texas as an example, is usually around 2.5%. That is about $5,000 per year. The total payment between mortgage and property taxes is $20,000. For the entire working 30-years, the total payments would amount to about $600, 0000. That is exactly three times of the original home purchase price. So basically the banks (which collect mortgage payments) and the local government (which collects the property taxes) have made a handsome $400,000 out from the average Texan.
CHRISRAO/饶旭东
posted by Unknown at 7:11 AM
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