Five years ago, Gurgaon-based Deepak Bansal (name changed), 45, decided to shift base. The serial entrepreneur had cofounded two successful digital companies and had even exited one of them. “I was looking for a place that offered me a better lifestyle, where life was less stressful, was not polluted and people less aggressive,” he says.
During a holiday to Penang Island, Malaysia, he figured it would be a perfect place to build a second home. “It was not as laid back as Goa but not as fast paced as Singapore,” he says.
He shifted base soon after. Wellconnected by flights, Penang offers the comforts of the First World and the joys of a small beach town. His bungalow is part of a marina complex and facilities such as grocery shops, pubs and cafes are within walking distance. His children are the happiest. Apart from good schools, they also enjoy safe atmosphere outdoors, where they can cycle around without a chaperone.
Malaysia’s MN1H2 visa programme, which allows retirees to come and live in the country, made the logistics of shifting easy. “That’s what money can do for you today,” he says.
At least three of Bansal’s close entrepreneur friends have shifted base to Asia or Europe. “In the past, too, people had money. But they had a geographical anchoring.” Most old-economy businesses were either in trading or manufacturing, and this limited the ability of a person to shift, bag and baggage. “Today most of us have made money in the digital businesses and mostly operate in the virtual world. Shifting base is a lot easier. Even our wealth is a lot global and can be accessed from anywhere,” he says.
Welcome to the world of a new breed of rich in 21st century India. The way they make money is different, and the way they spend is also different. Capital heavy investments and machinery are not required to make it big anymore. Companies are built on ideas in the digital era, and algorithms. For the lucky ones, a meteoric rise within a short span is an eminent possibility. Flipkart cofounders Sachin and Binny Bansal became billionaires within a decade.
The material wealth and bling that money can buy are typically used to mark the social standing of a person. But for the new breed of rich, the markers of their status have changed.
Take the case of a Mumbai-based firstgeneration entrepreneur who is passionate about fitness. He frequently takes a chartered flight to Goa with a bunch of friends to swim. “The joy of swimming in the clean, open sea is incomparable,” he says.
Another first-generation entrepreneur- turned -philanthropist says he doesn’t mind travelling economy class, sleeping in a $10 tent in Thailand or going on a Rs 2,000 trekking tour in Himachal Pradesh. The resident of the tony Lutyen’s area in Delhi says: “It is very easy to get disconnected when you are rich. You have to make an extra effort to stay grounded.” He, however, has no qualms in spending when required. The entrepreneur has hired a top-notch luxury travel operator to plan and curate his upcoming family vacation to South America. He also goes to the Swiss Alps regularly on skiing holidays.
The change in the markers of the new rich in the 21st century can be seen across the world.
Marked by intangibles, the technology-led era is shaping a new kind of capitalism. It is also creating a new code of conduct for the rich club. This club once stood out for its conspicuous consumption, revelled in its exclusive status, prided in its wealth and flaunted its pedigree. Traditionally, in society, consumption was seen as a social positioning system. Companies invented extravagant products to satiate this club’s aspirational urges and reinforce their exalted status. But a nuanced shift is now taking place and the rules of the membership are changing.
Because consumerism has been democr a t i sed, conspicuous consumption is no longer an aspirational marker. “Material spending today must have a qualitative spin to it,” says Santosh Desai, CEO, Future Brands.
Conspicuous consumption — the use of goods like flashy cars and bling to mark wealth in society — has been losing its charm for some time now. Multiple factors — including modern capitalism, mass production and rising incomes — have made such consumption more mainstream. Luxury product makers such as Armani’s Armani Exchange, Ralph Lauren’s Polo and Marc by Marc Jacobs have helped in the massification of luxury. The rise of sharing economy and the pay-per-use model has lowered the access threshold of luxury products and services. Access to private jets and yachts are not just limited to the uber-rich. Almost anyone can buy niche products and imported brands online.
Discreet consumption is in vogue now. Philanthrocapitalism, or investing in social programmes, is the new buzzword. Have no doubts, earning money still occupies the minds of the rich. But it is giving money that brings them status. Not surprisingly, The Giving Pledge is a new badge of honour that people like the Nilekanis and Azim Premji want to have. Capitalists with a socialist streak have become a common phenomenon. An evolved worldview on raging issues is the new bling.
Another parallel change has been afoot. Knowledge is today’s dominant currency and intellectual pursuits have a flaunt value. NR Narayan Murty’s son Rohan Murty setting up the Murty Classical Library of India is an example. “The elites display their wealth through cultural capital which is expensive but not ostensibly material. They use knowledge to attain higher social, environmental and cultural capital,” says Elizabeth Currid-Halkett, whose book, The Sum of Small Things – A Theory of the Aspirational Class, looks at how the 21st century rich behave and spend differently.
The rich now want to take position that need not be visible expensive but must necessarily be more informed. This makes being wealthy a tad difficult and also multifaceted. The books you read, what you tweet, the social media influence you have and the eclectic passions you pursue are all important signals. Look at the rich setting up art museums (Kiran Nadar and Piramal setting up museums of art) and theatre festivals (Mahindras and Munjals) in this light.
Increasing wealth has also led to a rise in inequality. Wealth concentration today is as high as in 1905, around when the term robber barons was coined. A Credit Suisse global wealth report says the world’s richest 1% owns half the earth’s wealth. It is far worse in India, where the top 1% has 73% of the wealth, according to an Oxfam report. The CEO society, once vaunted celebrities, face scorn. Several are dodging taxes. While the methods they use may be legal, these people are losing the moral battle. “The rich are anxiety-ridden. They grapple with self-doubt and moral conflict about their position in a highly unequal world,” says Rachel Sherman, the author of Uneasy Street: The Anxieties of Affluence.
Philanthropy today has surged with inequality. The rise of philanthrocapitalism and altruism’s flaunt value in today’s world must be seen in this light.
Rich spend on cultural capital, which is not material: Author Elizabeth Currid-Halkett
In the technology-led digital era, capitalism thrives without much capital. It thrives on the power of ideas, algorithm, data and design. This knowledge-led era has given birth to a new kind of elite class who live, spend and consume differently. Conspicuous consumption is over and it is all about intangibles now. Los Angeles-based Elizabeth Currid-Halkett, author of The Sum of Small Things – A Theory of the Aspirational Class, throws some light on the elite in the 21st century. Edited excerpts:
On the 21st century aspirational class
This elite is not simply defined by material goods and overt wealth. They display their wealth through cultural capital, which, to be fair, is expensive but is not ostensibly material. Music lessons, particular news sources and radio programmes and education are much clearer signs of elite position than simply a new car or a watch. Instead of material goods and conspicuous consumption, this group engages in inconspicuous consumption that improves the quality of their lives, buys back time and gives them positive experiences rather than simply stuff.
On the difference between the 20th and 21st century rich
Overt materialism is generally a less clear marker of status today as this trend is omnipresent. In America, many people can lease a new car, own fancy electronic goods and acquire nice clothing. The rich are more inclined towards subtle show of wealth. For example, they buy more artisanal goods — whether organic vegetables and free-range chicken or direct trade coffee and made-in-Brooklyn T-shirts and Barbour coats. These consumers strive for a story behind their purchases and one that upholds their values and cultural capital.
On the linkage between social and economic stratification
This is particularly troublesome in the current climate. Today’s elite consumer choices reproduce privilege in a way that previous elite did not. On the one hand, it’s more laudable to devote financial resources to organic food, breastfeeding and elite college education, rather than luxury goods. But these very choices reaffirm their elite position. These signals of class are far more complicated and have greater economic implications for future generations than, say, the luxury handbag of the previous generations. A handbag may have immediate social implications. But an elite college degree has far longer term and greater implications, both socially and economically. These signals of class are far more complicated and have greater economic implications for future generations than the luxury handbag or flat-screen TV that might have signalled wealth in previous generations.
On the implications of all this on consumer behaviour
The super- rich will undoubtedly still buy fancy consumer goods. But the consumption they engage in must uphold certain values. Taking care of the environment, ethic a l treatment of animals and social consciousness are important factors for these consumers.
THE BOOKS: The 21st century digital era is giving rise to a new kind of elite, distinct from the previous century. A slew of books have looked at their rise and how they are reshaping the world:
“Capitalism without Capital: The Rise of the Intangible Economy” – coauthored by Jonathan Haskell and Stian Westlake Capitalism in the tech-led era is different. The intangibleflavoured economy is shaped by a clutch of technology giants like Alphabet and Facebook with no physical assets. As a result, inequality and social polarisation is rising sharply.
“The Sum of Small Things - A Theory of the Aspirational Class” – Elizabeth Currid-Halkett The rich in the 21st century behave and spend differently. Conspicuous consumption is out. Discreet inconspicuous consumption
“Uneasy Street: The Anxieties of Affluence” – Rachel Sherman
Focusing on the lives of the rich, the books looks at the anxiety-ridden life of the liberal elites who believe in diversity and meritocracy, but grapple with self-doubt and moral conflict about their position in a highly unequal society.
"The Broken Ladder: How Inequality Affects the Way we Think, Live and Die” – Keith B Payne Inequality is not the same as poverty. Inequality makes people feel poor and act poor even when they are not. This has a significant impact, including psychological.
What does it mean to be rich in the 21st century?
Being rich in the 21st century isn’t easy. Rachel Sherman is an assistant professor of sociology at the New School and the author of ‘Uneasy Street: The Anxieties of Affluence’. Based on in-depth interviews with the rich club, the book focuses on anxiety-ridden lives of the liberal elites who believe in diversity and meritocracy but grapple with self-doubt and more conflict about their position in a highly unequal society. In an interview with Malini Goyal, she talks about her book and the lives of rich in the 21st century. Edited excerpts:
What is unique about the lives and world of rich in today's era?
First, I would say there is no such thing as "the rich" as a coherent entity. There are many different cultures of rich people. I interviewed 50 wealthy parents (most in the top 1%, some in the .1%) in and around New York City and so I can only speak about that. But the main thing I found that I think is distinctive from earlier eras in the US is that these people are often uncomfortable with being wealthy. There are a lot of stigmatized images of rich people, especially women, as greedy, lazy, self-indulgent and so on. The people I interviewed did not want to identify as "wealthy" or "rich." It is more acceptable to be wealthy if you can interpret yourself as working hard and consuming prudently. In this way they can be both "good rich" people and seem "middle class."
How have the markers of being rich changed between the 20th and the 21st century?
The people I interviewed--relatively liberal, highly educated New Yorkers--are not eager to flaunt their wealth. They tend to downplay their income and their spending, and they talk about not wanting to be ostentatious. So they prefer that their wealth not be loudly "marked" in the world. Among wealthy people themselves they probably use fairly similar markers to recognize and differentiate themselves; their homes, their taste, their clothes, how they spend their leisure time, and their philanthropy are some markers.
How has the relationship between rich and their wealth, consumption, materialistic possessions changed?
I think at one time in the US we had a more aristocratic upper class which did not mind being identified as such, and did not mind being visible as wealthy. I think at least some of these people thought that they were "better"than those in lower classes just by virtue of belonging to this class. Now it is less common to see this kind of discourse--people talk more about meritocracy (mostly through working hard) and diversity, and it is frowned upon to see yourself as better than others. This is something the people I interviewed are very concerned about for their children--that they don't think that they are "entitled" to more just because of their class advantages. They need to work for it, not be materialistic, give back to the community in some way, and be polite to others no matter what their class.
I also think that in the past it was more taken for granted that wealthy women would stay home with children and not work for money. Now, many of these women are very highly educated, with advanced degrees in law and business and other fields. The women I interviewed who did not work for money were conflicted about it, sometimes not feeling worthy of their lifestyles because they did not earn money, and sometimes conflicting with their husbands over spending and other issues.
Your book talks about how rich see themselves as middle class. Is this more about managing perception - within one's own self and to the outside world?
I think these people are working to think of themselves in particular ways in order to deal with not feeling guilty about having so much. One way they do this is by imagining that they are middle class, which some of them do by focusing on those who have as much or more as they do, even though of course there are many more people who have less. This makes it easier to feel not rich. Not everyone does this--some people are more open about the fact that they are wealthy--but everyone I talked with implicitly alludes to middle class values such as hard work and disciplined consumption, as well as trying to raise children who are not "entitled."
Can you throw some light on how the rich see the unequal world, the have-nots and manage their conscience to live a good life?
I think many of the people I interviewed are troubled by inequality. In part, they try not to think about it, and they imagine there is nothing they can do about it. They also avoid talking about it. This is one reason we have a taboo on talking about money and class in the US--it makes it easier for the wealthy not to recognize their advantages explicitly. They also try to justify their privilege by thinking of themselves as "good rich"--again, hard workers, prudent consumers, and nice people who give back, who raise children who are also "good people." The people I interviewed, with a couple of exceptions, don't typically blame the poor for their poverty, but of course many wealthy people do this also. Again it is not possible to say how "the rich" see anything; there are lots of variations within even the small group I studied, let alone within the US or around the world.