Bagatelle, a restaurant in Manhattan’s Meatpacking District, will add this $1,000 ice-cream sundae to its menu next month. According to a press release, the sundae includes vanilla ice cream, chocolate truffles, French macarons and chocolate vodka sauce, along with a Dom Perignon Rose sorbet with gold leaves and “gilded brownies.” The price includes a ring from Mauboussin made of gold and steel worth $530, putting the price of the sundae itself around $470.
“In order to gain and hold the esteem of men, it is not sufficient merely to possess wealth or power,” as Thorstein Veblen wrote around a century ago. “The wealth or power must be put in evidence, for esteem is awarded only on evidence.”
Bagatelle’s will be the second $1,000 sundae available in Manhattan, according to Eater. Even if you estimate the price of this one at $470 rather than $1,000, it’s fair to assume it will raise the average price of a sundae in Manhattan by several percentage points. This is the kind of increase in price you’d expect if there were a shortage of opportunities for profitable investment, leading holders of capital with nothing to spend their money on except for ice cream sundaes. It’s an illustration of why even very low interest rates might be inadequate to stimulate demand in an economy with an especially unequal distribution of wealth, which is a very troubling possibility for economists such as Larry Summers. Bagatelle’s other desserts cost $10 each, but instead of selling one dessert each to 47 more customers, Bagatelle hopes, as the recovery progresses, to sell one $470 sundae to one very wealthy customer. Since producing the more expensive sundae probably does not require 47 times more work, it’s easy to see how prices might increase even as unemployment persists in a lasting economic malaise.
The image above is courtesy of Bagatelle. Click below for an essay in Vanity Fair on the new age of excess in New York.