Aesthetic Socialism is the concept of viewing politics with aesthetics as one of the basic principles. I discussed the concept at length in my essay Aristocratic Aesthetic Socialism and show with Matthew Pegas and Giovanni Dannato. Aesthetics signifies one’s class and social status and influences and manipulates peoples decisions and economic output. Extreme inequality in aesthetics shapes the core foundations and social mechanisms of a society.

In politics the debate about the distribution wealth is primarily about the distribution of monetary assets and how to make basic needs widely available. Due to mass production and future trends in automation we are now entering a Post Scarcity Economy where many goods and services can be provided to a larger segment of the population.

We have the wealth, resources, and technology to provide basic services such as food and electronics that can be mass produced. In the future healthcare could be provided cheaply due to automation but the goods that are positional will remain increasingly scarce.

Positional Goods according to Lion of the Blogosphere “are goods and services that people value because of their limited supply and they convey a high relative standing within society.” These resources are positional because they are ranked in value to other resources.

WILL KENTON explains in Investopedia that “if economic growth were to grow to the point where positional goods became affordable and widely available, the positional goods would lose their exclusivity, and likely their value. These would fail to become positional goods, and other positional goods likely would take their place.”

These goods don’t just function as ways to signify one’s status but are unique in value because of their aesthetic qualities.

Examples include architectural characteristics of communities, the culture and demographics of a neighborhood, and goods that are scarce because of  their unique aesthetic quality or high level of craftsmanship.

The objective of Aesthetic Socialism is to increase the supply of positional goods and make them less positional. It is not socialism in the sense that it would distribute positional goods evenly among the masses but rather incentivize the production and manage the usage and distribution to dis-incentivize waste.

Without the increase in supply of positional goods “the cost of desirable positional goods have been increasing faster than the rate of inflation and faster than the rate of growth of the median person’s income. This is a consequence of the top 1% (and other topmost percents) getting a larger share of the wealth, which they then use to buy up the best positional goods,” as Lion points out.

The main reason why trickle down economics fails to work is because “if everyone becomes richer, then the price of positional goods go up proportionately. Tax cuts or economic growth will never make positional goods more affordable” says Lion.

Revenue from tax cuts is usually not invested in creating positional goods but rather buying up goods such as real estate, only increasing the costs and contributing to other issues such as wasteful land usage. Extra homes sit empty much of the time and the dependence upon a large underclass to maintain them also places a burden on positional goods.

At the same time, the call to redistribute wealth does not address the problem either if it does not address the supply and distribution of positional goods.

John V.C. Nye is correct that “rising incomes and population growth will disproportionately drive up the price of such homes, frustrating those with dreams of upward mobility but ultimately causing the wealthiest to pay more for locations.”

However Nye’s point of positional goods as taxation because “the richest (or most ambitious) must work harder and pay more for virtually the same goods as yesteryear while their productive investments (necessary to stay on top of the income distribution) benefit the entire economy” does not take into account the impact that elite consumption for positional goods drives up the costs for the middle class and upper middle class.

Lion adds “that the majority of money spent by the middle-class (which I generally consider to be the class of people who have at least a college degree) and above is on positional goods.”

Management and incentivization of the production of positional goods are more important than taxation levels. Even if middle income to moderately wealthy people see their income levels rise, there is a high level of economic strain caused by competition over scarce positional goods.

Lion points out that “Economic growth” and tax cuts are of no benefit to people who can’t afford to move to “good” neighborhoods, such things just increases everyone’s nominal wealth and the cost of the “good” neighborhood goes up proportionally and remains just as unaffordable as it was before.”

In major urban areas where positional resources are either scarce or there is high competition, middle class and moderately wealthy people will either pay a premium for these resources or leave the region for a place where positional goods are more accessible.  The only way to address the strain on the middle class is to increase the supply of positional goods.

Real Estate is a scarce good in a post-scarcity economy Lion points out that “there is a fixed quantity of land. So if other people get richer, but your income stays the same, the price of land will go up and become less affordable to you.”

John V.C. Nye’s statement concurs that  a “good location is the quintessential positional good because it is important both for its relative prestige and its irreconcilability.”

Amelia Josephson writing about severely cost-burdened cities for Smart Assets points out that “20.3% of LA households spend 50% or more of their income on housing costs,”  and in New York City ” 17.7% pay between 30 and 50% of their income in housing costs. In New York, the supply of housing, particularly affordable housing, hasn’t been keeping up with the influx of new residents.”

While land is a finite resource, Lion adds that “housing shouldn’t be that scarce (as long as there are enough natural resources to build houses) because you can always build more and squish them together and build vertically. But the reality is that in many places in the United States, whether because of zoning or because of a long lag between increased demand and the creation of housing to meet that demand, houses behave more like a fixed-quantity good just like the land beneath them.”

Lion gives an example of “an 11-unit brownstone in Brooklyn Heights being converted into a single $18 million-dollar mansion.” His point is that “Eleven families of more modest means are prevented from living in a desirable neighborhood because of a single rich family,” and most likely most of those extra rooms will sit empty most of the time.

While land itself is a scarce resource in many urban areas the quality of architecture is also a position good because people pay a premium for a certain aesthetic. Historic architecture is positional because it is of limited supply and people will pay a premium for a brownstone in Brooklyn or Victorian in San Francisco.

Highrises are desirable and zoning severely limits the supply of new construction. Other aesthetic qualities include access to walkable urban communities as well as parks and open space that are limited to certain locations.

Aesthetically pleasing and innovative architecture and urban planning is a positional good. If restrictions on new development, zoning policies, and overall lack of creativity in urban planning limits the supply, then what remains will continue to be in high demand.

Besides real-estate, the demographic factor of living in a “good” neighborhood is also a positional good as Lion states that “the worst part about being poor (in modern-day America) is that you are forced to live in the same neighborhood as other poor people, and send your kids to schools full of other poor kids.”