I talked in my last post a little about how we spend huge amounts of our money competing with one another. Certainly this is most evident in the city where the competition for space is tremendous and people end up spending literally 50% of their take home pay on mortgages that are made up of 80% location, 20% building. It is considered normal around here to throw 40% of your money at competition for housing location and nothing else. Of course the money spent to compete with others doesn't stop there at all as people in the city spend more for food, parking and other goods and services simply because there isn't enough space for everyone and this is the system that forces poorer people to live far away.
Another place we flagrantly spend our resources just to get ahead of each other is clothing. How much of our clothing budget is actually spent on practical necessities and how much is spent on getting more, brighter, newer or more trendy clothes to outdo our rivals? I know I personally wear jeans and tshirts that are usually 5 years old or so but I am not the norm - most people have huge amounts of clothing that is expensive or impractical or both just because they feel they need to keep up with everyone else's expenditures. Cars, jewellery, technology and furniture are the same in that the lion's share of the money is only there because someone else needs to be impressed or placated with the expense. We aren't trying to impress people with our possessions directly of course as they are simply a way to show how powerful we are by displaying how much money we can afford to blow on things we simply don't need.
People clearly base their ideas of what they will buy on what they see around them and not some internal sense of the proper value of an item. It is well established in every kind of sales that in order to sell an item to the average person you must convince them that the item is much better than what some other people buy and simultaneously much cheaper than what yet another segment of the population buys. If you show people 2 items priced at $40 and $100 you will sell a lot of $40 items. If you present them with a $40 item, and $100 item and a slightly better $200 item they will buy the $100 item almost exclusively because the price suddenly looks like a bargain compared to the $200 item and they don't want to appear cheap by going for the lowest price. That money is being spent on competition; pushing ourselves to buy what everyone else does rather than simply noticing that the $40 item is sufficient for our needs and getting that instead. If you want to sell something that is pretty expensive compared to the prices people are used to you always plant an even more outrageous item right beside it to give the impression that the price you want to sell at is normal.
The question I find myself asking is "How much of our money is actually spent on the raw resources and services we want and how much is thrown away simply to outcompete each other?" Obviously answering that question is incredibly complex because even defining the terms properly is challenging and the data required to do a thorough analysis would be immense. I expect that for people living where I do the answer is going to be something like 85% or higher of expenses are purely competitive. The price to actually create and ship all the goods we need is shockingly low compared to the cost of all the things we tend to acquire.