The Luxury Paradox
The Luxury Paradox
How Watches Became Both More and Less Exclusive
Let’s talk about luxury.
Estimated reading time: 25 minutes
In this recent post, the definition of luxury came up in the comments section - which is the reason for today’s post. In many ways, the evolution of the luxury industry mirrors broader societal shifts - from literature to music, and other creative pursuits - where tradition grapples with innovation and exclusivity balances with accessibility. For watch enthusiasts, this is a redefinition of luxury which is especially significant.
It signals a shift from luxury as purely a symbol of wealth and exclusivity, to a more nuanced concept that includes craftsmanship, innovation, personal expression, and cultural relevance. This redefinition is driven by emerging “new luxury” trends and the growing influence of Asian markets, which are jointly reshaping our perceptions of what is truly precious.
The value of a watch is no longer determined solely by its price tag or brand name; instead, factors like artistic merit, technological innovation, cultural significance, and even the story behind its creation are increasingly important in defining a the luxury status of a watch.
In this essay, we will explore the evolution of luxury and its implications for watch collectors, where tradition, craftsmanship, and cultural influences converge.
Historical Context and Definitions of Luxury
The concept of luxury has a rich and complex history.
Historically, luxury was defined in opposition to necessity. As Werner Sombart put it:
“Luxury is any expenditure that goes beyond the necessary.”1
This definition, seems straightforward, but it actually opens a Pandora’s box of philosophical questions. After all, how does one decide what is necessary?
Bernard Mandeville, in “The Fable of the Bees,” grappled with this very question. He proposed luxury is:
“everything … that is not immediately necessary to make Man subsist.”2
The problem with such a strict interpretation is obvious: this would make almost everything a luxury!
This relativity of luxury is something we’re all too familiar with in the watch world. A Seiko 5 might be a luxury to a student, while a seasoned billionaire collector might consider nothing less than a Patek Philippe Grandmaster Chime as true luxury. It stands to reason, therefore, luxury is not an absolute concept, but one that shifts based on perspective.
Christopher Berry, in his investigation of luxury, introduces another layer of complexity. He argues luxury goods are:
“defined negatively by their not being goods that are deemed socially necessary; nor utilitarian instruments, necessary means to an end; nor objects of fervent desire; nor cherished possessions.”3
In other words, luxury occupies a unique space - desirable, but not essential; cherished, but not utilitarian.
Luxury isn’t just about the object itself. It’s also about the experience, the craftsmanship, and the story. As watch collectors, we understand this intimately. We don’t just buy a watch for its ability to tell time (yes, smartphones can do that). We buy it for the heritage, the artistry, or the emotion it evokes when we glance at our wrist, or indeed for the status it grants us within society.
This ‘multifaceted nature’ of luxury is captured well by Arjun Appadurai, who proposes that luxury goods should be understood as “incarnated signs” whose predominant use is rhetorical and social4. He lists five characteristics of luxury:
Restriction to elites by law or price
Complexity of acquisition
Semiotic virtuosity5
Specialised knowledge for “appropriate” consumption
High degree of linkage to body, person, and personality
Sound familiar? These characteristics could easily describe many of the watches we covet. The limited editions that are near impossible to purchase without the right connections, the intricate complications or ‘nuanced pieces’ which require a more than a passing interest to truly appreciate, the way a particular watch becomes an extension of its wearer’s personality (Sly Stallone as a ‘Panerai guy’ somehow comes to mind!) - these are all part of what makes luxury watches so captivating.
The concept of luxury hasn’t remained static. Over time, it has been moulded by shifting social, economic, and cultural factors. In the 18th century, we see what Berry calls the “demoralisation of luxury.” It marks a pivotal shift in societal attitudes towards luxury consumption. Historically, luxury was often viewed through a moral lens, with excessive indulgence considered a vice or a sign of moral decay. This perspective was deeply rooted in religious and philosophical traditions that emphasised asceticism and frugality. Then, during the 18th century, particularly in Western societies, this moral stigma began to erode. Philosophers and economists like Bernard Mandeville and Adam Smith started to argue luxury consumption could have positive economic effects, stimulating trade and industry.
This ideological shift allowed for a more neutral, even positive, view of luxury. It paved the way for luxury to be seen as a reward for hard work, a driver of economic growth, and a source of aesthetic and sensory pleasure; rather than a moral failing. Essentially, demoralisation was crucial in setting the stage for the modern luxury market, where conspicuous consumption is largely celebrated rather than condemned.
In short, luxury transformed from a moral concern to an economic opportunity. Luxury went from being “for the aristocracy” to being an “aspirational symbol of success” for a rising middle class.
Defining Luxury
If we consider all these definitions from the past - from Sombart’s “expenditure beyond the necessary” to Berry’s nuanced exploration of “needs and desires” - the concept of luxury seems to represent different things depending on the angle from which we view it.
So, how do we define luxury in a way that encapsulates all these perspectives while remaining relevant to our contemporary context? I propose the following definition…
*takes deep breath*
Luxury is a dynamic and contextual concept that refers to goods, services, or experiences which exceed ordinary necessity and functionality, offering superior quality, rarity, and emotional resonance. These items or experiences are imbued with a high degree of craftsmanship, heritage, or innovation, and convey social meaning beyond their practical utility. Luxury is relative to societal norms and individual perceptions, often associated with exclusivity and prestige, but increasingly linked to personal values, authenticity, and meaningful experiences.
Let’s deconstruct that:
Dynamic and contextual: This acknowledges the relativity of luxury across time, cultures, and individual circumstances.
Exceeding basic necessity and functionality: This retains the core idea that luxury goes beyond the merely necessary or functional.
Superior quality, rarity, and emotional resonance: These capture the tangible and intangible aspects of luxury, and they cover Appadurai’s 5 characteristics and the emphasis on desire over need.
Craftsmanship, heritage, or innovation: These recognise both traditional and contemporary sources of luxury value, accommodating both old-world craftsmanship and modern innovation.
Social meaning: This incorporates the communicative aspect of luxury, its role in signalling status or identity.
Relative to societal norms and individual perceptions: This reiterates the subjective nature of luxury, acknowledging what constitutes luxury can vary between societies and individuals.
Exclusivity and prestige: These are just traditional hallmarks of luxury which reflect the historical association of luxury with elites and scarcity.
Personal values, authenticity, and meaningful experiences: This element modernises the definition, recognising the shift towards experiential luxury and the increasing importance of authenticity or alignment with personal values.
This definition bridges the gap between traditional definitions of luxury and more contemporary perspectives. It recognises luxury as both 1) a category of goods and 2) a quality of experience. This allows for the inclusion of tangible products (like watches) and intangible experiences or services.
For watch enthusiasts, this definition helps explain why we find such deep satisfaction in our hobby. A fine watch isn’t just a tool for telling time; it’s a nexus of superior quality, craftsmanship, heritage, and emotional resonance6. It carries social meaning, can convey exclusivity, and for many of us, aligns deeply with our personal values and sense of authenticity.
Moreover, this definition allows for the evolution of luxury over time. It doesn’t tie luxury to any specific price or level of rarity, recognising these aspects will evolve with societies and markets. Instead, it focuses on the qualitative aspects that elevate an item or experience from being ordinary to being … luxurious!