Second Class Needs

Keynes observed that the needs of human beings "fall into two classes--those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative only in that their satisfaction lifts us above, makes us feel superior to, our fellows."
--John Kenneth Galbraith, The Affluent Society

Readers of Casual Kitchen already know all about status competition and costly trait signaling. Longer term readers will also recall the concept of desire triggering: by buying something, you can even extinguish a desire you never even knew you had until some company gave you that desire to quench in the first place.

There's an obvious insight that follows: If you want to avoid getting rudely separated from your money, simply avoid all purchases in this genre of "needs" Keynes discusses above. They aren't needs at all, they just feeeeeeeeeel like needs.

Which takes us to Galbraith and Keynes once again:

Keynes noted that needs of "the second class," i.e., those needs that are the result of efforts to keep abreast or ahead of one's fellow being, "may indeed be insatiable; for the higher the general level, the higher still are they.”

Empowered consumers must know to separate needs of this "second class" from true needs. Further, they must also know the game: that these "needs" exist at every socioeconomic level--and no matter what your level of wealth, your attempts to satisfy them will take all the money you have, and then more.

Understanding this dynamic is a gigantic step towards playing the money game on the easy setting, and an even bigger step towards living a much more fulfilling life. Not to mention a far less expensive one.


READ NEXT: Epistemic Arrogance
And: Epistemic Humility