A luxury economy

The third lecture, "An economy of luxury", looked at the prices charged for luxury goods. This sphere of the economy functioned according to the same principles of supply, demand and monopoly as those that governed the prices of ordinary commodities. Our main source was the diary kept by a wealthy art collector named Li Rihua, of which the part covering the years 1609-1616 has survived. It shows not so much what Li paid for the luxury items he acquired, as how he managed his participation in this type of economy. Li knew full well that the city of Suzhou was a production center for both "legitimate" and fake luxury goods, and part of the fun was making sure that only "authentic" works of art entered his collection. We conclude by proposing the hypothesis that fakes played an important role in confirming the authority of certain styles and maintaining the canons of good taste.