(2011-12-09) Rao Acting Dead Middle Class Scripts Trading Up

Venkatesh Rao on the strategy of Trading Up instead of Acting Dead and following the Middle Class scripts that are becoming obsolete.

He references Bruce Sterling's Acting Dead thinking from 2009-06-30-SterlingReboot.

Not acting dead involves a strategic spending pattern that marketers are starting to call trading up: buying premium in some areas of your life, while buying budget or entirely forgoing spending in other areas. This pattern of conscious, discriminating consumption defines the emerging replacement for the middle class. As the picture above illustrates, there isn’t really one “New Middle Class.” Instead, it is a fragmented social space, with each little island being defined by a specific pattern of trading-up, and an associated Lifestyle Design script.

The middle class in recent history has been defined by its ability to both earn and spend money in very predictable ways. Then of course, the risks started creeping back in, around 1980... But autopilot spending has persisted, long after the new patterns of exposure to financial risk have become clear. The reason of course is that the old financial habits were not really financial per se, they were driven by class norms rather than financial risk-management calculations... So what will happen to people operating by such obviously dangerous attitudes in difficult times? Turns out, we’ve been here before. They’ll die out... When a middle class goes into decline, you get a large segment of the population engaging in a desperate scramble to keep up appearances, while switching from collective-norm-based to individual-risk-based financial thinking... A norm-based SocialClass will persist with disastrous financial choices long after the secure financial environment, on which its scripts are based, collapses. Simply because membership of the class is the source of all social identity and access to Social Capital.

It makes sense to cash out your hard assets, rethink your financial life more directly, write off investments in the social capital of the declining class, and look for an alternative emerging class to join.

You have to evaluate various alternative trading-up scripts to figure out which ones might actually fit your situation and encode meaningful adaptations to the new environment. Not every lifestyle design script is likely to work... The transition can end in three ways: Prolonged Misery... Waiting For Godot... Quick Change Artist (Iterative/Pivot)... Quick-change artistry is of course, the card I think you should pick. It is a turbulent, experimental approach, where there are no absolute life truths, no permanent commitments to any script, no one-book formulas, and no easy no-brainer decisions.

In the comments he acknowledges that this approach isn't very viable once you're Having Kids. (So he doesn't plan on having any.)