Communistic Capitalism – The Illusion of Exclusivity

This essay is one of many that will form part of a series I would like to, half-jokingly, call “Communistic Capitalism” — a satirical commentary on the state of modern capitalism. The term first arose during a light-hearted discussion on economics with my brother-in-law, and yet, behind the humour lies a serious observation: today’s capitalism may require structural corrections if it is to remain both efficient and equitable in the decades ahead.

Black Afgano by Nasomatto has long been my personal favourite perfume; a fragrance so rich and layered that it feels like a statement rather than an accessory. The first spray is a tapestry of resinous oud, incense, and smoky depth, unfolding slowly and lingering for hours. In India, a 30 ml bottle commands between ₹12,000 and ₹15,600, yet the actual cost of producing the fragrance liquid is only a small fraction of that figure. The difference is not the result of superior functional performance but of an intangible prestige built through branding, heritage, and exclusivity. This disparity between cost and price sets the stage for a broader discussion on the economics, legality, and societal implications of luxury perfumes.

From a perspective of functional equivalence, the contrast becomes more striking when one compares Black Afgano to a well-crafted local perfume priced at around ₹700 for the same volume. To an average person encountering the scent in passing, it is virtually impossible to discern whether the aroma comes from a niche European house or a modest artisan. Longevity, projection, and composition can be matched closely enough that the main difference lies in perception — the wearer’s own awareness of wearing a high-prestige brand. Perfume, unlike a Louis Vuitton handbag or a Rolls-Royce Phantom, does not serve as a visible status symbol; it is invisible to all except those close enough to smell it, and even then, the brand identity is not evident. In essence, the public value of a luxury perfume resides almost entirely in its scent, which can be replicated at a fraction of the cost. This makes perfume a unique and pure example of a Veblen good, where the price premium is detached from externally verifiable utility.

From the viewpoint of societal cost, luxury perfumes embody a particularly high deadweight loss when evaluated against utility. If a consumer spends ₹15,600 on Black Afgano when a ₹700 dupe provides identical olfactory satisfaction to themselves and those around them, ₹14,900 of the expenditure generates no incremental functional benefit. Across the US $15 billion global luxury perfume market, even a partial consumer shift toward utility-driven purchases could free billions in capital. Such funds, redirected toward education, healthcare, clean energy, or infrastructure, could produce measurable, long-term public benefits. The inefficiency is more acute in perfumes than in other Veblen goods because their brand signal is invisible, and the sensory outcome can be closely matched by far less costly alternatives.

Turning to the legal framework, the duplication of a fragrance — commonly known as producing a “dupe” — is generally permissible under intellectual property law in most jurisdictions. Scents themselves are not protected by patents unless they incorporate genuinely novel and non-obvious chemical compounds, which is rare in perfumery. Most fragrance formulas are instead guarded as trade secrets, meaning that an independent perfumer may lawfully create a similar scent through reverse engineering, so long as they do not obtain the original formula through illicit means. However, trademark and trade dress protections remain in force: a dupe cannot be marketed under the same brand name, nor can it use identical or confusingly similar packaging, logos, or bottle designs. This legal framework effectively permits the creation and sale of scent-alike perfumes, provided they are not misrepresented as the original. In conclusion, the law protects brand identity but not the scent itself, leaving space for lawful imitation that meets consumer needs at a lower price.

On the question of innovation, luxury brands often argue that the existence of dupes will undermine the incentive to create new scents. While this position has intuitive appeal, historical experience in other sectors suggests the opposite. In industries such as technology, fashion, and consumer electronics, the introduction of affordable alternatives has often expanded overall market size, thereby generating more revenue for research and creative development. In perfumery, accessible dupes can serve as an introduction to scent appreciation for a wider consumer base, some of whom may later progress toward niche or bespoke offerings. This expansion can preserve and even enhance the creative drive for innovation, rather than suppressing it.

In synthesis, Black Afgano is both a personal indulgence and a case study in the mechanics of modern consumer capitalism. Its value is built not on functional superiority, but on the intangible aura of brand identity and narrative. Legally, the scent can be duplicated without infringement; economically, lawful imitations could mitigate waste and redirect resources to socially productive ends; culturally, expanded market access could sustain innovation rather than hinder it. If capitalism is to evolve in a direction that balances pleasure with efficiency, it will require a more deliberate separation of intrinsic value from brand illusion — and perfumes, with their invisible yet potent hold over perception, may be the perfect place to start that conversation.