Starbucks is opening some exclusive “Reserve Roasteries and Tasting Rooms,” which will offer high-end coffee experiences at around $12 per cup. George Will discusses the phenomena, drawing on an economist who distinguishes between the “material” and the “positional” economy.
First we have to meet our basic “material” needs (food, shelter, clothing). After that, what once were luxuries (automobiles, air conditioning, computers) are turned into necessities. After that, we spend money on high-status goods that enhance our social “position.”
Read this analysis and my questions about it after the jump.
Would you buy a $12 cup of coffee? If you like coffee enough, I suspect you would, if only once, even if no one saw you do it. [Read more…]