Motives, consequences and taxation of conspicuous consumption: Classics, Veblen, and Keynes

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The present study aims to contribute to the theoretical discourse on the consequences and taxation of conspicuous consumption in economics by analyzing the perspectives of prominent economists from the late 1970s to the mid-20th century. Specifically, it examines the works of renowned classical economists (Adam Smith, David Ricardo, John Rae, and John Stuart Mill), as well as of Thorstein B. Veblen and John Maynard Keynes. The analysis reveals a broad consensus among these scholars regarding the detrimental implications of this particular economic behavior. These include the impairment of subsistence and savings, devaluation of productive forms of competition between individuals, pursuit of inequality, scarcity of capital, and obstruction of full employment. The article concludes that classical liberals and Keynes agree that progressive taxation of luxury goods can be considered a less harmful and, to some extent, more desirable alternative to taxation.