Since beyond some point it is relative, not absolute, consumption that matters, top earners would not really suffer if the tax led all of them to increase the size of their mansions at a slower rate. Yet they and others would reap large benefits from the restoration of long neglected public services. Yet the progressive consumption tax is hardly a fringe idea. By suggesting that our current consumption imbalance is a result, in large measure, of consumption externalities, I do not mean that other explanations for the imbalance are wrong. Social capital has declined.
Class also matters, and there is no denying the influence of commercial advertising.
If a political solution is what we seek, however, there may be considerable strategic advantage in focusing on externalities. It is difficult to imagine Congress approving legislation aimed at transforming class consciousness or eliminating commercial advertising. But we have a long tradition of collective action to control externalities-of discouraging some people from imposing uncompensated costs on others. And as Madison Avenue hucksters have known all along, it is a lot easier to sell with the grain than against it. Copyright Boston Review , 1993-2000.