The Death of Gucci Capitalism

For at least the past 30 years the U.S. economy has been one built upon the act of consumption: seek, get, and buy more stuff. 

Now is this a problem? Well that will more than likely all depend on who you talk to. One thing that can't be denied is that we are in the midst of one of the most challenging economic times since the great depression, and the "value" in consumption is changing as we know it.

Just a couple of weeks back I went to visit my mom and dad in Las Vegas, (we moved there in the late 70's and for the last 25+ years personally witnessed it becoming a beacon of financial success) and had the opportunity to have in depth discussions with my dad (an entrepreneur and business man there since the mid 80's) about how the recession has both affected Vegas and his business.  Serious stuff. The Las Vegas unemployent rate is 13.1% and Nevada has the second highest state unemployment in the country. I also visited L.A where California's unemployment rate is 12.1% about 3% points higher than the national average. I had the chance to hang out with a few good friends of mine who had either lost their jobs or were working with organizations that were being TIGHTLY squeezed by the state's budget crunch.  It was cool hanging with my friends, but sobering seeing the predicaments that they were in. 

Now these two cities are famed for their glitz and glamour and as I was on the plane back to DC (where I live) an article I read, almost a year and half ago by Noreena Hertz called The Death of Gucci Capitalism, came to mind. Probably one reason is that nowhere is Gucci, Prada, and Louis Vuitton more popular than in these two cities that were the backdrop to my growing up.

Now Noreena is an academic (and ivory tower types I have mixed feelings about) and I tend to lean more in the direction of the school of Hard Knox (in the trenches is where the real learning goes on) but I respect what they do.

Even though I have some issues with a number of her assertions, I do agree with her premise that she opens up with in her article:

"We are witnessing the death of a paradigm. As is usual at moments of mourning, the new reality is being met by denial, resistance and anger from the initiators and defenders of the old faith."

She then wraps up her diatribe by stating that "The next phase of capitalism will combine policies of localisation with an understanding that there are problems we share - such as carbon-dioxide emissions - that cannot be tackled alone. And it will actively seek to redefine what is valuable, so children growing up today do not make the mistakes of this generation in confusing success with the ability to purchase another pair of Nikes or a Gucci bag."

I definitely agree with her.  Today, right now, we have to begin thinking in radically different ways about how capitalism in this country needs to re-define and re-interpret itself and be sustainable in the 21st century.