“After the electric light goes into general use, none but the extravagant will burn tallow candles.”
This prophetic proclamation by American inventor and businessman Thomas Edison, printed by the New York Herald on January 4, 1880, aptly characterizes the modern market for mechanical and automatic watches, which serve today as extravagant showcases of wealth, or pretense thereof.
Just as with the tallow candles of old, the mechanical watch returns its wearer to a treasured past, full of sacred ideals and aspirational grandeur.
A great many, however, confuse the end retail price for an expression of quality, rather than one reflective of the voracious demand for recapturing the former.
This is the very subject of this writing, to disentangle fact from fiction, and to expose the real causes of the costs incurred.
Despite the illogical rumblings of the luxury watch community, the retail price is dictated not by intrinsic or utility value, nor exclusively by the cost of production, but by factors of exclusivity and collectibility; these markets do not necessarily follow quality.
What's more, quartz clocks (electronic oscillators) are vastly more accurate and more reliable than mechanical movements.
The latter survives only for its collectibility and appeal to tradition.
While one can certainly appreciate the value of detailed craftsmanship and quality control, these are two incontrovertible characteristics of a $300 Seiko and a time-tested, timelessly-appropriate Casio F91W-1, which is currently priced under $12 per unit.
How, then, can anyone possibly justify the purchase of an $8,000 Rolex Submariner? The answer, of course, is found in the brand's cachet, its prestige and recognizability, and the sordid sense of superiority engendered in its wearers.
While elegance and luxury can beautify the experience of life, one must satisfy due diligence to ascertain the value of any good, to better understand the value-add and attending costs.
Upon the completion of this investigation, one will invariably arrive at the conclusion that their value stems not from their quality, functionality or reliability relative to today's superior counterparts, but rather from their (often-induced) rarity and collectibility, a function of assigned sentimental value derived from one's aspired connection with memories and ideals attached to a bygone era.
The only measure against which the mechanical (or automatic) movement surpasses the quartz counterpart is through the refined and intricate processes required to craft and maintain the former.
However, just as with a vintage BMW or high-end luxury car, they are not naturally rendered any more valuable because of this liability; indeed, this is precisely the cause for such precipitous depreciation in the used luxury auto market.
What's more, value stems not from the quantity or quality of labor required to produce the end products, but rather from the subjective valuations of competing consumers who effectively demand them.
This is known in economics as the subjective theory of value, the school of thought which replaced the labor theory of value which underlies the comments of typical brand loyalists.
Take the 1913 Ford Model T, for example, each of which took two and a half hours to assemble, and compare it to the modern Ford factory that can assemble more than 1,000 cars per day.
The Model T is an inferior automobile in nearly every capacity, except for its collectibility in a narrow subsegment of the market.
The same can be stated for boutique automakers today, such as Pagani and Koenigsegg, whose low-volume (and largely in-house) production lines induce scarcity and unique styling cues to fetch millions of dollars (USD) for vehicles whose prices are justified by their exclusivity or their heritage, not by their functionality or reliability.
Indeed, these vehicles are notoriously expensive to maintain and repair, and their performance specifications match those of supercar competitors whose models are priced millions of dollars lower.
Consider a 1968 Oldsmobile 442 priced today at $37,000. The modern entry-level Camaro is quicker 0-60 MPH, faster in the quarter-mile, far more fuel efficient, corners better, handles better on snow and ice, comes with a manufacturer's warranty, and offers a myriad resplendent features and interior comforts, for a price of $25,000, 32 percent less than the vintage 442. Oddly, the 442 originally sold at $3,000, meaning today's asking price exceeds the original (inflation-adjusted) MSRP by more than 60 percent. The same factors influence the luxury watch market, and the majority of all luxury markets for that matter.
So long as one understands the constitution of the price, one can make a reasoned decision, hopefully to fulfill a personal desire irrespective of the impulse to impress others.
Remember, these items are highly unlikely to make your life any better or easier, to make you any better as a person.
Ultimately, it's far more important to preserve wealth than to project it.
This prophetic proclamation by American inventor and businessman Thomas Edison, printed by the New York Herald on January 4, 1880, aptly characterizes the modern market for mechanical and automatic watches, which serve today as extravagant showcases of wealth, or pretense thereof.
Just as with the tallow candles of old, the mechanical watch returns its wearer to a treasured past, full of sacred ideals and aspirational grandeur.
A great many, however, confuse the end retail price for an expression of quality, rather than one reflective of the voracious demand for recapturing the former.
This is the very subject of this writing, to disentangle fact from fiction, and to expose the real causes of the costs incurred.
Despite the illogical rumblings of the luxury watch community, the retail price is dictated not by intrinsic or utility value, nor exclusively by the cost of production, but by factors of exclusivity and collectibility; these markets do not necessarily follow quality.
What's more, quartz clocks (electronic oscillators) are vastly more accurate and more reliable than mechanical movements.
The latter survives only for its collectibility and appeal to tradition.
While one can certainly appreciate the value of detailed craftsmanship and quality control, these are two incontrovertible characteristics of a $300 Seiko and a time-tested, timelessly-appropriate Casio F91W-1, which is currently priced under $12 per unit.
How, then, can anyone possibly justify the purchase of an $8,000 Rolex Submariner? The answer, of course, is found in the brand's cachet, its prestige and recognizability, and the sordid sense of superiority engendered in its wearers.
While elegance and luxury can beautify the experience of life, one must satisfy due diligence to ascertain the value of any good, to better understand the value-add and attending costs.
Upon the completion of this investigation, one will invariably arrive at the conclusion that their value stems not from their quality, functionality or reliability relative to today's superior counterparts, but rather from their (often-induced) rarity and collectibility, a function of assigned sentimental value derived from one's aspired connection with memories and ideals attached to a bygone era.
The only measure against which the mechanical (or automatic) movement surpasses the quartz counterpart is through the refined and intricate processes required to craft and maintain the former.
However, just as with a vintage BMW or high-end luxury car, they are not naturally rendered any more valuable because of this liability; indeed, this is precisely the cause for such precipitous depreciation in the used luxury auto market.
What's more, value stems not from the quantity or quality of labor required to produce the end products, but rather from the subjective valuations of competing consumers who effectively demand them.
This is known in economics as the subjective theory of value, the school of thought which replaced the labor theory of value which underlies the comments of typical brand loyalists.
Take the 1913 Ford Model T, for example, each of which took two and a half hours to assemble, and compare it to the modern Ford factory that can assemble more than 1,000 cars per day.
The Model T is an inferior automobile in nearly every capacity, except for its collectibility in a narrow subsegment of the market.
The same can be stated for boutique automakers today, such as Pagani and Koenigsegg, whose low-volume (and largely in-house) production lines induce scarcity and unique styling cues to fetch millions of dollars (USD) for vehicles whose prices are justified by their exclusivity or their heritage, not by their functionality or reliability.
Indeed, these vehicles are notoriously expensive to maintain and repair, and their performance specifications match those of supercar competitors whose models are priced millions of dollars lower.
Consider a 1968 Oldsmobile 442 priced today at $37,000. The modern entry-level Camaro is quicker 0-60 MPH, faster in the quarter-mile, far more fuel efficient, corners better, handles better on snow and ice, comes with a manufacturer's warranty, and offers a myriad resplendent features and interior comforts, for a price of $25,000, 32 percent less than the vintage 442. Oddly, the 442 originally sold at $3,000, meaning today's asking price exceeds the original (inflation-adjusted) MSRP by more than 60 percent. The same factors influence the luxury watch market, and the majority of all luxury markets for that matter.
So long as one understands the constitution of the price, one can make a reasoned decision, hopefully to fulfill a personal desire irrespective of the impulse to impress others.
Remember, these items are highly unlikely to make your life any better or easier, to make you any better as a person.
Ultimately, it's far more important to preserve wealth than to project it.
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