Balearic Islands as a 'positional asset'

The Austrian economist Fred Hirsch, a key figure and fundamental precursor of ecological economics, in his best-known work, The social limits to growth (1976), coined the concept of positional goods –positional goods, or status goods– as opposed to material goods: while the latter are those that allow us to satisfy our needs, positional goods are those that, due to their scarcity and high price, are consumed exclusively by the richest individuals, who buy them to signify themselves and position themselves socially.

The term gained traction and was adopted by many authors who have explored the implications of this concept. One of them is the American political scientist William E. Connolly, who distinguishes between two types of positional goods: those whose access is limited to those who can afford them, and those that, despite their scarcity and being reserved for the upper classes, generate consequences that we all must bear. The former are socially innocuous or have a low impact, but the latter increase inequality.

Connolly gives two examples. Orthodontics would be a positional good of the first type. When it first appeared on the market, it was extremely expensive, accessible only to those who could afford the fortune it cost. Going to school with a mouth full of braces was a status symbol, even if it caused pain or sores. Those who couldn't afford it might suffer from envy, but there were no other collateral damages.

Connolly's second example is something else entirely: SUVs, the all-terrain vehicles for the city. The automotive industry introduced them to circumvent emissions and safety regulations. Before their affordability and proliferation, SUVs were a typical case of a positional good laden with externalities: their introduction into cities and on highways necessitated widening lanes, increased CO2 emissions, and made accidents more severe. Not for those driving a showy tank, of course, but for everyone else driving a more practical vehicle. Infrastructure and traffic departments swelled their budgets to address the implications of the increased presence of heavy vehicles in urban and interurban traffic. For Connolly, this type of positional good increases spending for everyone without any social benefit being shared.

Reading the recent economic history of the Balearic Islands from this perspective illuminates certain phenomena, because the tourism industry has a remarkable capacity for multiplying positional goods, especially the second type proposed by Connolly. We thought we could transform mass tourism into quality tourism, but ultimately the tourist population continues to grow, and the increase in luxury tourism has led to a proliferation of positional goods that only they enjoy, but which we all pay for.

A prime example is the rise of private aviation. The exponential increase in private jet flights at our airports is surely the ultimate expression of extreme positional advantage. And while government agencies run campaigns to raise awareness about the need to recycle and reduce our carbon footprint, a minority consumes more CO2 in twenty minutes of flight than the average citizen does in an entire year. And Aena (the Spanish airport authority) keeps warning us that the increase in air traffic will necessitate airport expansions, which will be paid for not by jet users, but by us.

Another thing: the average citizen of the Balearic Islands has long since stopped being able to aspire to own a boat – modest length, discreet motor – or a small vegetable garden to enjoy a meal with friends, because the sea and the countryside have become a privilege that drives residents away.

And housing, of course. Treated by public authorities as a commodity, it is the latest material asset to become a status symbol, and increasingly exclusive. Scarcity, prestige, and the exclusivity of certain areas drive up the price of all homes. And the touristification of towns and cities, whose radius is constantly expanding from their historic centers, creates an irreversible theme park effect, with the loss of neighborhood commercial life and its replacement by businesses that cater to visitors, not locals.

The final destination of this journey is the transformation of the entire Balearic Islands into a vast, unrestrained, and obscenely expensive resort. Finally, we can fulfill our dream of being a top-tier destination: a destination of such high quality that the price of admission includes our own expulsion. We can't complain: we spend a fortune on infrastructure and services for our visitors, and when we have to leave our homes because we can't afford the rent, we can proudly say that we spent some time in the finest private residence in the Mediterranean.