At the American Express Luxury Summit in California recently, I got a scolding from a Russian billionaire. Roustam Tariko, the fun-loving, vodka-insurance-credit-card-and-banking magnate, told me that I was being too dour about luxury demand. Far from entering a period of quieter consumption, he said, status spending was poised for a boom. “People are still spending,” he said. “They want the biggest and the best.” He added: “Mr. Frank is wrong.”
Perhaps. But the difference is probably more one of geography than economics. While the American rich are getting nervous, the party is just getting started for the Russian rich — especially for its billionaires. Among Mr. Tariko’s Bugatti-driving, yacht-buying cohorts, conspicuous consumption is still alive and well, a stark contrast to the increasingly cautious American rich.This cultural disconnect also helps to explain the otherwise baffling launch of a Russian magazine called Snob.Russian billionaire Mikhail Prokhorov, the metals magnate with an estimated net worth of more than $20 billion, plans to pour $150 million into Snob, which will comprise a magazine, website and TV station.Andrei Shmarov, who will run Snob, told Reuters, “It’s for people who are successful and those who want to be successful.”Granted, American snobs would never buy a magazine called Snob — they’re too good for that. Even aspirational snobs would never be seen with a copy of Snob, since that would be admitting that they hope to become snobs. But in Russia, snob is a compliment.“Snob, to us, means a person who is a ’self-made man’ — a person who has gained a right to snobbishness,” Mr. Schmarov said.So hats off to the Russian snobs. May some of their snob spending trickle down to the rest of the world.