THE PARADOX OF LUXURY: HOW THE LUXURY GOODS INDUSTRY EXPLOITS THE MIDDLE CLASS

Abstract

The luxury brand phenomenon, which originated in Europe during the era of royal courts and craft guilds, has evolved into global industry whose economic and social consequences require rethinking. Modern research reveals a paradox: the growth of the luxury market outstrips the increase in the number of the rich population. This is because brands actively engage the middle class through "affordable luxury" strategies, creating the illusion of belonging to the elite, which, firstly, increases economic inequality, and secondly, provokes a "financial trap" for the middle class. This article analyzes the historical background of Europe's dominance in the luxury segment and its adaptation to globalization; competition between traditional and new brands, the impact of industry on social stratification, especially through the exploitation of aspirational consumption of the middle class. As a result of the study, it was determined that luxury brands, contrary to the rhetoric of exclusivity, depend on mass demand, and their business model based on artificial scarcity and status psychology exacerbates the debt burden of households and undermines the sustainability of consumer economies, which calls into question the ethics of the industry's marketing strategies and actualizes the need to reassess the role of luxury goods. in the structure of modern capitalism.