The Diderot Effect
en.wikipedia.org
en.wikipedia.org
I've certainly felt the sudden gravitational pull that comes from having one nice new toy enter your life. It manifests as a sense that "wow, this little overpriced thing is so enjoyable... why am I sitting on a pile of savings and denying myself things that would make my life so much nicer?" Slowly, I started spending $20 for a bag of coffee beans I really like instead of $12 for something that's just okay. But it has to stop somewhere.
I realize I only buy the big ticket items when I either am seriously depressed or feel like I'm going to die soon, or both. The rest of the time, money in the bank is more interesting to me than nicer stuff. This is probably a phobia of spending money that I'll go to my grave with.
So, as always, it's a matter of balance. You can't judge spending as good or bad, what matters is how much relative to your means.
I try to think of recurring expenses in terms of how much capital it would take to fund them in perpetuity (because I may well live another 50 years!), at 3% interest.
That $10/month subscription? $120/yr, or $4,000.
That’s not at all guaranteed to support the expense forever, but I find it’s a useful way to think about little recurring expenses before they add up out of control.
I'm joking about all that, if you can't tell. But... Fuck people who say that counting pennies makes you cheap. Those are the people who'll never be rich.
(but then of course the same opportunity cost also applies to your monthly payments)
(And for inflation of the subscription, I assume theae are after-inflatiom rates)
Needs, not means. (And some comfort/relaxation is a need). Being richer than most isn't a reason to splurge more, it's a signal that something may be wrong with society.
I have to disagree hard with this. The rich _should_ splurge, as that makes the money flow back to the economy. And in some cases go to artisans that have no mass market appeal.
IRL the vast majority of these consumer spending things don't play a massively damaging role in the average consumers life / upward mobility... at least relative to history or other regions. But a few things do. When you start getting serious about personal finance people tend to obsess about the small less important things we're wasteful about. Mostly because it's more obvious locally and easy to feel guilty about (consumer electronics, clothes, restaurants, etc).
But in practice for healthy well employed workers 80-90% of the time self-imposed poverty comes down to two things: cars and renting housing.
Cars ranks #1 easily in terms of actionable things, if you asked 90% of middle class households making >$100k you'll find car loans/costs are easily the biggest burden on disposable income. People buy cars they can't afford and getting $30k+ loans plus the associated costs of nice cars (damaging them, insurance, etc) it becomes very apparently the biggest thing stopping someone from having extra money that could be invested in 10x+ more value like paying off high interest credit card loans (rather than adding another +interest car loan) or simply investing in better things like real estate, small businesses, personal development, stocks, etc etc.
The other elephant in the room that far, far outweighs spending on vanity consumerism is housing. This one involves plenty of personal responsibility but of all the things in Americans/western life this is the least to blame individuals.
Stopping Americans from buying stupid expensive cars is a very hard mostly social problem, but housing is something that could be solved much more simply through stuff like ending zoning and anti-NIMBY laws.
We could gain plenty from working on the smaller tier consumer stuff at the same time (every dollar really does matter and you don't know until you track it) but education about cars and gov action on increasing housing supply would be the most productive work in the short term.
And since enough of them have $40k+ SUVs and “crossovers”, those become the norm for middle class families who really would have been just fine with small station wagons (if those were actually available in the US market)
The best way to escape this cycle is to only buy the car you can pay for up front (even if you then take a loan because the interest rate appears to be in your favor). Do this enough times, and you’ll be ok with plonking down the cash for a $15-20k carefully-researched, moderately-used vehicle with a warranty, but be horrified by the very thought of that $600+ 5-7 year loan so many of your colleagues accept as normal.
It's the same with homes. But as you say, at least real estate tends to hold it's value somewhat.
Expensive land usually does appreciate (in some areas, only until interest rates go up?), but the house on the land is a money pit.
I'm not here to pass moral judgments on this method of creating wealth, although to me unnecessary mineral extraction for energy is largely fraught with moral hazard. But to say that real estate isn't an investment is to consider the past two centuries of American economic growth to be a temporary aberration, and I don't think you can do that in light of the degree of economic reliance that has grown up around it.
You can just show up and buy the thing and use your skills to improve the thing, which improves everything else around it.
There is enormous financial leverage if you can do that, because most people aren't willing to put in the work.
If you mostly use your car for a ten minute drive to work, but twice a year need to drive several thousand kilometers, it may be tempting to optimize for the latter (in terms of size, comfort, velocity), whilst it may be cheaper overall to optimize for the former and hire a vehicle for the latter.
Of course not everyone takes long holidays (several months) touring so their constraints would be different and satisfiable with different solutions.
Yet... I know a lot of people who are otherwise uneducated (high school, if that) who understand this implicitly. I don't think it's exceptionally American or even related to education level. It's learned by going through actual deprivation and remembering how hard it is to earn every dollar you make.
[edit] what I'm referring to here as 'it' is: Never take a loan unless you are sure the value of the money over time in interest or investment favors you. A loan is just a bet that you can do better with that money than the interest rate you have to pay for it. Why don't they explain this to children anymore? [/edit]
I'm a 3rd generation American. I've had a view, for my whole life, that America is a machine that turns ambitious producers into lazy consumers over the course of a couple generations. Being ambitious, and producing, is at least as much about making wise decisions with your savings as it is about earning.
Personal observation: The immigrant tendency to save their money used to be racially judged and regarded as a type of "cheap" "hoarding" - always, of course, by the 3+ gen stock of old money. But the phrase "a fool and his money are soon separated" is as true today as it ever was: the tendency of the children of the rich to be idiots and blow it all is the greatest bulwark against generational wealth we possess in a free market democracy. Far more effective than any tax.
Deprivation is key not just to the hunger to create, but the hunger to conserve. It has to be experienced or taught.
In my case, personally, this is a product of my upbringing. My parents were the first generation of our family to have a little extra income (grandparents were poor farmers).
I have a good salary by all accounts, but still count the beans, since this was what my father taught me. I am extremely weary of spending large sums of money in anything.
COUNT THE BEANS. Teach your children to count the beans. The moment you stop counting the beans, you become a degenerate consumer zombie.
That means: Make money AND save money.
EDIT: Although, according to Wikipedia, the term "Diderot Effect" was coined by a paper published in 1988. I don't remember when I saw the children's book, but must have been published before, or very soon after, that paper was published.
“I don’t like to buy things for my things”.
For example, if you buy a car or a house, it’s basically guaranteed that you will soon need car things and house things. Many of those things will in turn require their own things, and so on.
It’s interesting to consider the longest thing chains you have in your life, so you can avoid making them longer or avoid starting new ones.
The price of a thing (like the e-bike I've been looking at to reduce my dependence on my car to get places) becomes considerably inflated when you consider those factors.
It does have a side effect of considerable levels of tool acquisition, and basically mandates having a workshop and power washer.
I have a family friend who coined a saying I repeat often: “I never met a house that wasn’t a thief.”
...then eventually, you need a bigger house to keep all those things in.
etc
I started doing photography over the pandemic, I started with a 2009 dslr, because that’s what I had lying around.
Because I did not even know how to expose a photo, it was great, and it felt like it did everything I wanted. I was very used to the layout, the functions, and although it was only 12MP, it took some of my favourite photos. All with lenses worth <300$.
Later I received a new mirrorless, 4K shooting, 24MP camera. I changed brands, So some of it is on me, but I had to buy new lenses as well. Getting new $150 lenses was not possible, and it felt wrong to put $150 lens on a $2000 camera.
So I got a few lenses to match. Not only that, but my 2012 MacBook Air was not able to run the latest Lightroom, and the older Lightroom version I had was not able to decode the new raw image format.
So I had to get a new computer as well.
All in all, a gift, that although is very much appreciated, cost me a lot more than the gift itself.
I have no regrets now, the newer sensors, the better tracking, the better lenses, all allow me to take much better photos. But if I would have stayed with my old camera, I would have never known what I was missing.
There are so few pieces of gear that will significantly improve your work compared to using the stuff you already have and know how to use. But people still spend a fortune on all kinds of hardware and software in the fear of missing out on some magical device that will give them a shortcut to great results. It's mental.
I just met someone with a new full frame mirrorless, a very expensive camera. The shooting experience use worlds apart: huge luxurious viewfinder, fast autofocus with face tracking, it's a monster.
But at the end of the day, if I put in the work with my 2012 camera paired with a cheap but great manual focus Samyang 85mm f/1.4 I'll get almost the same results.
But I am curious where this is going …
The Diderot Effect is real.
The lettuce spinner is where it's at. The top of the new model comes apart completely whereas the older one couldn't be cleaned.
I'm too cheap and lazy to replace what works, although I have:
- a brand unknown manual edgeless can opener
- a "Rabbit" wine corker
- a brand unknown manual cheese grater for parm
- automatic, USB-rechargeable pepper mill
- mortar and pestle for grinding damiana
- aeropress with reusable filters
- sunbeam t-35
- instant pot duo crisp
Trying to make everything match is an expensive and unnecessary obsession. There's a bohemian charm in mismatched socks and things that don't fit a sterile, boring Architectural Digest environment.
https://www.westmark.de/de-de/hebeldosen%C3%B6ffner-original...
It's fun to ask people to try to figure out how to use it. Once you see how it works, you can see that it's ingenious. It's quicker and easier to use than other kinds and it has only a single moving part and no edges to dull. It can easily last generations.
Also came across this blog[1] after reading the wiki page.
I remember a podcast of Tim Ferris where he was boasting that people often complimented him on his Vans black shoes because "they could pass as dress shoes". No one past the age of 15 would be so tasteless as to share such a compliment, and that's what's beautiful about SF.
SF also happens to be the place where I heard a deceptively powerful method to get rid of stuff
1. Put all your stuff in boxes 2. Pick items out when you need them 3. After a year, throw everything you don't use
That method is normally known as "moving", plenty of people practice it once in a while but it's more popular for people that rent a home.
A full frame camera needs more expensive bigger lenses which needs a higher quality tripod, larger and faster memory cards, more powerful computer for the editing, etc...
Improving one thing requires improving everything since the final output is limited by a "bottleneck"
The Diderot Effect seems to point out a similar "identity" bottleneck where a higher quality(status) identity is bottlenecked by the lowest quality frustration.
Had a broken mouse, bought an expensive mouse to replace it. Mouse looked better than my keyboard. Ditched my membrane keyboard with a Mechanical keyboard. Read that different switches make different sound. Bought a new pack of switches. Someone recommended that those switches work best with XDA profile keycaps. Went ahead and bought that. This effect is real.
But there's this one shirt I bought back in 1999 that still now, today, looks about the same as it did then (I have photographs). I don't wear it any less than any of the other shirts. Just somehow... year after year... it remains decent.
I wish I could go custom-make 20 shirts out of the same material and with the same techniques as this shirt. I'd never need another shirt again in my life!
Once you have heard well-tuned, low distortion audio, it is difficult to enjoy a badly-tuned, distorted system. The curse of knowledge.
Compared to all the other stuff you mentioned, vintage lenses will likely hold value and can be sold anytime in the future.
> The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes "Boots" theory of socioeconomic unfairness
Unfortunately this is not explained properly, so people think it's just a shortcut to instant gratification.
Comes Boot