The Revaluing of Material Goods, Part 2

In Part 1, I laid out the likely-obvious premise that in times of hardship, items of practical value may buck the traditional cost structure and actually become more valuable than traditionally expensive luxury items, based on their utility; E.g. your Louis Vitton bag or your Rolex is nice and all, but at what point does it stop becoming worth what you shelled out for it?

To determine the circumstances in which an item is or isn't "worth it" in this framework, one must take several factors into account:
1) The price you are paying for the item.
2) What else you could purchase instead for the same price.
3) The relative compared utility/necessity of the item you are purchasing versus that of other available options.

This is a simple mental algorithm that most people blow through without so much as a conscious thought many times a day. House blend or fancy frappe? Eat out or make something simple at home? Fancy beer or tolerable swill? (I know my usual choice on that particular issue). Most of the time these unconscious decisions even factor in a fair bit of reflexive future planning. If you're flush and feeling it, you don't have to think too hard about shelling out a bit extra for something you want... if you're a bit strapped, not doing so is an easy decision.

But for the discussion at hand, we need to alter factor 3) a bit, to pertain not so much to the circumstances at hand, or to the immediate and predictable future, but to the time beyond that... to the circumstances of a situation that may arise at some point in the future.

It is here that we digress from simple unconscious decision making, and into a process that requires more deliberate thought, whose results and responses vary widely from individual to individual, based on a myriad of factors. There are members of my family that have the first dime they ever earned, and friends who spend their entire paycheck within a few days of getting it. And while Benjamin Franklin would probably waggle his finger at the indiscriminate spenders, there's a pretty good chance that both ends of the spectrum are usually in at least some form of stable financial orbit, as long as the relative gravity of the larger financial situation remains unchanged.

So everyone is making their consumer choices based on their particular world view and place within it. As you might guess from our title, we tend towards a view that infers large scale change for a majority of America in terms of the consumer landscape. I do prefer to stick to news/facts and shy from sweeping predictions, so I'll simply say that I'm not calling apocalypse, but I am putting forth the assertions that, in the future-to-be:

1) Some goods that are widely available now may be very hard to obtain later (based on various problems pertaining to raw materials, the manufacturing process, importation/transport, and the supply/distribution chain).
2) The worth of goods will be determined almost exclusively by their practical value.
3) Bartering will gain prominence as a means of local and small-scale commerce.

I believe that a vast majority of Americans will suffer a tremendous cognitive dissonance as a result of the above. The relationship between material goods and status is a deeply ingrained aspect of society, culture, and personal identity, especially here in America. Many will have trouble letting go of the feelings of privilege and security that their luxury possessions afford them. Many will go out of their way to hold onto them, to continue acquiring them, or to take them from others, either out of habit or the idea that situation at hand is temporary, and that the items will return to their original value later. A prime example: during hurricane Katrina, looters were seen stealing large televisions and dragging them back to flooded and ruined living spaces, inside of which they would be completely and utterly useless until the situation improved drastically.

If we do find ourselves in a significantly reduced living situation at some point in the future, it would be silly to say that having the right stuff would guarantee your survivial/comfort/happiness. But not having any of the right stuff would undoubtedly hamper your chances.

So what is the "right stuff?" We'll cover this in part three.