South Africa holds the uncomfortable distinction of being one of the most unequal societies on earth. With a Gini coefficient that hovers near 0.63, we are a country where wealth and poverty exist in radical contrast. This inequality has metastasised how we spend money.
We spend a lot of money trying to look wealthy. We buy expensive cars, designer clothes, the house in the right suburb and the holiday that looks good on Instagram. Who are we trying to impress? The short answer is that we’re trying to impress everyone around us.
Our inequality doesn’t mean some people have slightly more money than others. It means people occupy radically different economic worlds, while living alongside one another. The visibility of wealth has become unavoidable. A luxury car driving through a township, a designer handbag in a shopping centre or a mansion behind a security gate shouts: “This is where I sit in the hierarchy.”
Status consumption isn’t a consequence of insecurity, it is a natural response of people navigating a society that seeks to place you in a social hierarchy, to show where you stand between the haves and have-nots. This is the game everyone is forced to play.
And the more unequal a society is, the more important this social hierarchy becomes and people look for ways to signal to others where they stand. Conversely, we also look for these signals in others: the car someone drives, where they live and what they wear.
This is not a new observation. Thorstein Veblen defined conspicuous consumption in The Theory of the Leisure Class (1899) as the practice of buying luxury goods and services to publicly display wealth, economic power or social prestige rather than for practical utility or necessity. However, it was Amotz Zahavi, an Israeli evolutionary biologist, who explained the evolution of characteristics, behaviours or structures that appear contrary to the principles of Darwinian evolution in that they appear to reduce fitness and endanger individual organisms.
This is what is known as signal theory. An honest signal tells the receiver about an otherwise unobservable fact. In other words, it’s hard to fake. A peacock’s tail is a classic example because a weak peacock cannot produce or maintain it. Yet an opulent peacock’s tail is great if he’s looking for a mate, but a major hindrance if he wants to avoid predators.
In humans, signals work in a similar way. Low body weight and muscles take effort to develop and maintain, which is why body shape remains so attractive to both sexes. Similarly, wealthy people have always exhibited things that are difficult to acquire, such as property, art or fine wines.
But something has gone badly wrong in South Africa. We have made it remarkably easy to look wealthy without actually being wealthy. Credit cards, vehicle finance, personal loans, home loans and early wage access allow people to consume today against income they have not even earned yet.
We have built an economy of fake signals. Easy credit has democratised the appearance of affluence at significant cost to our actual financial wellbeing. The problem is that we’re confusing the appearance of wealth with wealth itself.
And if everyone around you appears to be richer, you recalibrate what “normal” looks like. The car that once seemed extravagant becomes the minimum acceptable vehicle. The modest home feels inadequate. The holiday becomes something that needs to be documented and displayed.
This pressure is arguably driving an uglier behaviour: corruption. When a government official can loot a procurement budget and emerge wearing a Rolex at a funeral, or a tenderpreneur can build a compound in a gated estate without a day of legitimate enterprise, the signal is catastrophically corrupted and ceases to be a reliable signal of competence, productivity or intelligence.
Opulence that isn’t earned doesn’t just mislead, it actively punishes the people who play by the rules. It tells the watching public that the path to visible success is through connection and capture, not through discipline and hard work. The result is a status economy built on sand.
Nobody can read anyone else’s signals with any accuracy. The man in the Fortuner might be a self-made entrepreneur or the beneficiary of a corrupt procurement contract. The woman in the designer outfit might be a careful investor or drowning in store card debt. We have lost the ability to distinguish real wealth from performed wealth, and in losing that ability we have unleashed a financial arms race, one that benefits nobody and hurts those who cannot afford it.
In a healthy society, status signals should tell us something useful about the qualities that society values. If someone has accumulated wealth by building a successful business, developing valuable skills, creating jobs or solving difficult problems, their wealth contains information. But if wealth signals can be accumulated through debt, corruption or inheritance, the signal becomes noisy.
The consequences of our conspicuous consumption go beyond personal finance. There is a psychological toll here that rarely gets discussed. When the signals around you suggest that everyone else is thriving and you are struggling, the natural conclusion is personal failure rather than systemic distortion.
The comparison is not between you and reality, it is between you and a carefully curated performance that is amplified by social media. That gap breeds shame, then recklessness, then desperation. The decision to stretch further than you should, gamble or take on debt to maintain your social status becomes almost inevitable. It is not stupidity. It is a rational response to a deeply irrational information environment.
This is why simply telling people to “live within their means” misses the point. We shouldn’t underestimate the psychological forces involved. People are responding to the social environment in which they live. And the more unequal the society, the more people strive to signal to others where they stand.
The question worth asking, therefore, is what it would take to change the signals themselves. If the problem is that visible wealth is too easy to fake, what signals are genuinely hard to counterfeit?
Well, a business that has survived for 20 years. A qualification earned through years of difficult study. Raising children well. Building something useful. Being trusted by the people around you. This kind of social capital comes from actually building things that really matter.
So perhaps the more interesting question is how we surface these signals. How do we build a culture and institutions where the flex is not what you own today but what you’ve built over time? Where patience is legible and discipline visible, and the long game is the one worth playing.
It wouldn’t just change how we spend. It would change who we admire. And in a country as unequal as ours, that might matter more than we think.
