In The Theory of the Leisure Class (1899), Thorsten Veblen coined the phrase "conspicuous consumption" to designate the act of purchasing and using certain goods and services, not in order to survive, but rather to identify oneself to others as having superior wealth and social standing. These possessions and services are extras that are to some extent wasteful. They symbolize one's ability to waste whatever one wants.
In society, one establishes an identity, not only by what one does or says, but also by purchasing and being seen to possess certain types of car, house, or clothes, or by being seen to live in a certain neighborhood or suburb, shopping in certain stores, going to certain theaters, decorating one's apartment in a certain way, taking certain vacations etc. All of these are social symbols to which society has attached certain connotations of a superior, different, or normal identity.
Before the twentieth century, conspicuous consumption served most often to distinguish members of the aristocratic class (with inherited status) from members of the upper class bourgeoisie (wealthy, land-holding merchants, professionals, etc), and the latter from members of the lower, working classes. Members of each class bought and used objects that symbolized their social superiority to members of the next lower class. The wealthy thus bought lavish houses and vehicles, had a high number of servants, spent extraordinary sums on elegant entertainment, etc. The bourgeoisie tried to do the same, including being seen in aristocratic circles.
In relatively wealthy, twentieth-century America, conspicuous consumption is a tool of a large percentage of the population. It can still imply superior wealth and social standing (as do the Kennedy's family house on Martha's Vineyard or a jaguar), but it may only signify that one belongs to a particular group.
Conspicuous consumption is a major aspect of modern capitalist societies like America. Conspicuous consumption and advertisements that publicize conspicuous consumption make individual's desire to compete for the money necessary to buy the symbolic advantages that society, business, and the media associate with a particular group, particularly a successful one. It makes us desire to belong to a group, whether this group be seen as superior, different, or just normal. Conspicuous consumption is thus crucial to the capitalist struggle for wealth and power that America now dominates.
Conspicuous consumption has its downsides. It is spurred on by envy and resentment of those who belong to a group from which one is excluded and who have what one does not have. In a country with enormous and ever-increasing inequalities like America, it can make being poor seem to be humiliating, even if one has a much better lifestyle than the vast majority of people who live in underdeveloped countries. Poor clothes may not be seen as shameful or suspect in a poor country, but in a very rich country they often are.