This is a somewhat tongue-in-cheek title, but a serious topic. I think Seth Godin is both brilliant and very good at what he does -- and he demonstrates a desire to learn.
A while back he wrote about "Understanding Luxury Goods". His writing is usually brief, bold, and right on the mark. This one rambles a bit, possibly because the nature of value is not as clear as we assume. This is my attempt to clarify the discussion. After you read "Understanding Luxury Goods" come back for a few clarifying ideas.
The value of luxury goods -- or any other goods -- is a combination of two categories of worth:
- use value: the features and functions a good confers to a person.
- generative value: the characteristics or experiences a good confers to a person.
Our brains appear to treat scarcity and value as the same thing. It's not that something is scarce because it is valuable or valuable because it is scarce: value and scarcity are identical. Perhaps we should call it svacalruece?
But what is scarcity? It's not just that something is uncommon or rare; a rare meat has no particular value to a vegetarian. For something to be scarce it must be both rare and relevant. Relevance, in turn, exists when someone has a relationship to something.
Seth correctly identifies an opportunity for non-profits: "...to use their true needs as only part of the conversation about giving. The dreaded gala, for example, is best seen as a luxury good." Where he goes astray is thinking "... the time and coordination and busywork are actually providing utility... not to the charity, but to those attending." The value propositions are generative, starting with a scarce experience for the attendees that simultaneously demonstrates their wealth and power.*** A gala is also a way to experience a rare -- or at least rarefied -- community.
Seth is definitely on to something here. A deeper understanding of generative value and the way it relates to utility should help push these ideas forward.
* It could be 'someone and someone', but not 'something and something'.
** The 'law' of supply and demand is derived from this concept, but it's not the only law of value that can be derived, or even the most important.
*** There are other generative values that are powerful and private motivators. Anonymous gifts, for example, tend to be related to a sense of purpose and self worth. This can be prideful, as in "I'm better than you because I give." It can be humble too, as in "The world is better because I give." Knowing which experience a potential benefactor desires can affect the way you interact with that person - and their desire to give.