UK: SO THAT'S - INCOME AND EXPENDITURE.

UK: SO THAT'S - INCOME AND EXPENDITURE. - Conspicuous consumption was once the preserve of the aristocrat. Now, as personal incomes have soared, everyone is spending an increasing amount on non-essentials.

by Rhymer Rigby.
Last Updated: 31 Aug 2010

Conspicuous consumption was once the preserve of the aristocrat. Now, as personal incomes have soared, everyone is spending an increasing amount on non-essentials.

Thomas de Berkeley, a 14th century nobleman, was rare among his peers in recording his expenditure. According to his ledger, in 1345-46 he spent £1,308; a sum that, for the time, could be termed both astronomic and gastronomic - for nearly 60% went on food. By contrast, the net worth of his peasant contemporary Robert Oldman of Cuxham was around 28 shillings. The gulf between the two clearly illustrates the problem of gauging historic expenditure with any certainty. The survival of individual pieces of information is a guarantee of only that; to determine the whole from surviving scraps is impossible.

What does emerge is that the level of personal spending encountered today was then almost entirely the preserve of the aristocracy. The plebeian mass owned little other than the clothes on their backs, and the bulk of their outgoings went on food and rent. At the other end of the social spectrum, vast amounts were lavished on extravagant lifestyles: banqueting did not come cheap.

This polarised spending pattern endured for hundreds of years. And while the lot of the man in the field slowly improved, little in the way of real change occurred until the Renaissance. Even then, the new mercantile middle class was relatively small compared to its current counterpart. Indeed, at the beginning of this century, consumption could still be divided neatly along lines of wealth.

In 1900, food was still by far the biggest single item of expenditure, accounting for nearly 50% of the average person's outgoings. Clothing, housing and alcohol (what economists refer to as 'inferior goods', those consumed disproportionately by low earners) each represented around 10%. In a society where ownership of cars was a rarity, and the poor either rode a horse, cycled or walked, spending on transport was unsurprisingly insignificant.

To understand the changes that have taken place since, one only need look at the vast increase in personal incomes. Naturally, as people have become richer, they have had more left over after taking care of the essentials. Food has declined massively as a proportion of total expenditure. Housing, meanwhile, has risen. This reflects both the correlation between income and house prices, and the improvements in the quality of the average house.

Expenditure on the two vices, alcohol and tobacco, has declined over the past few decades as health awareness has risen, though increases in excise duties have partly mitigated the fall. A rise in both categories during wartime perhaps reflects a tendency to turn to basic comforts in times of trouble. Transport has been the most remarkable climber: if personal mobility today is compared with that a century ago, it is easy to see why.

As incomes continue to rise, the largest growth is likely to be in the category of 'other goods and services'; that which includes recreation and non-essentials. Turn to Thorstein Veblen's Theory of the Leisure Class, published in 1899, and the extent of the shift is clear. Here he noted that conspicuous consumption of valuables was 'a means of reputability to the gentleman of leisure'. A century on it has become a way of life for all.

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