If you are unfamiliar with the word, premiumization, read Roger Cohen’s oped piece in today’s New York Times. Not satisfied with merely buying more and more stuff, some hyperwealthy people are looking for special, high-priced goods that satisfy some mysterious inner need I cannot begin to understand: M&M’s with your face on each piece; Renova Black, a “fashionable” toilet paper; or bottled water from the world’s cleanest place.

A differentiation frenzy spawns things like Tasmanian Rain water, which justifies its price tag (up to $25 for a 750-millileter bottle in luxury hotels) because it’s collected “just minutes from where the World Meteorological Organization records the world’s purest air.”

This appeared in the same edition whose front-page headlines announced the failure of Lehman Brothers, one of Wall Street’s oldest and most respected investment bankers. Having fueled the run-up of speculative investments, this house and others of the same ilk, like Merrill Lynch and Bear Stearns, were bit by the same hand that fed them. Alan Greenspan once spoke of irrational exuberance saying, “But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions…”
Is premiumization simply another form of irrational exuberance? It seems so to me. The quest for goods that add virtually nothing to the well-being of someone other than massaging his or her ego is irrational in my way of thinking. It is another symptom of the erosion of meaning in our world. The pity of it is that the underlying drive that seeks individualized candy bits is the same as that that leads to excesses in the financial world. When these excesses eventually produce collapse because the financial system has become unsustainable, the pain is spread to everyone, like me, who relies on the financial system for the means to buy much simpler non-premium things like food, clothing, healthcare and shelter.

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