Packy McCormick identifies a counterintuitive economic shift: as technology and production create unprecedented abundance, the true value of wealth is migrating toward assets that cannot be replicated, printed, or mass-produced. This isn't just a market observation; it is a historical echo of the Gilded Age, where new money desperately sought old status, now playing out on a global scale with sports franchises, hypercars, and masterpieces. For the busy investor or observer, the piece offers a crucial lens on why traditional valuation metrics are failing and why the price of a baseball team or a single painting can detach entirely from utility.
The Historical Precedent
McCormick anchors his argument in the dynamic between American industrial wealth and European scarcity during the late 19th and early 20th centuries. He cites the playwright S.N. Behrman's observation on the art dealer Joseph Duveen, noting that "Duveen ... noticed that Europe had plenty of art and America had plenty of money." This imbalance drove a massive transfer of cultural capital, where the newly rich purchased Old Masters not merely for aesthetics, but for the social legitimacy they conferred. The author highlights how Duveen's clients, such as Henry Clay Frick and Andrew Mellon, spent hundreds of millions in today's dollars to secure these assets, effectively building the foundations of the Frick Collection and the National Gallery of Art.
The commentary here is sharp: McCormick suggests that the motivation wasn't just ownership, but the psychological need to convert liquid cash into something "priceless to someone who could afford anything with a price tag." He illustrates this with the story of Alva Vanderbilt, who threw a $250,000 costume ball in 1883—equivalent to $6 million today—to force her way into New York's exclusive "Four Hundred" society. The lesson is that when a class of people has infinite purchasing power, they will pay a premium for the one thing money usually cannot buy: heritage and exclusivity.
"For the newly rich of the Gilded Age, as for the wealthy of any era, that was status via scarcity, and the thing that was high-status and scarce for American millionaires back then was connection to the heritage of the old country."
Critics might argue that this historical parallel overlooks the fact that modern scarcity is often artificially manufactured or protected by legal monopolies, whereas Gilded Age scarcity was often a result of genuine historical accident or the decline of European agriculture. McCormick acknowledges this nuance, noting that European aristocrats only sold heirlooms because "cheap food from the United States and elsewhere had wrecked the profits of European agriculture," creating a forced scarcity that American abundance ironically fueled.
The Macro Shift
The piece pivots to the modern era, arguing that we are entering a "supercycle" where global wealth concentration is colliding with a flat supply of iconic assets. McCormick points to recent acquisitions, such as Thrive buying the San Francisco Giants and HOF Capital acquiring stakes in Bugatti, as evidence that investors are fleeing replicable tech for "Iconic franchises and cultural institutions rooted in tradition, identity, and shared experience." The core data point is staggering: while global GDP has doubled, the number of Major League Baseball teams has remained static, and the wealth of the top 100 individuals has grown tenfold.
McCormick writes, "Since the turn of the millennium, global GDP has more than doubled... while the number of San Francisco MLB teams and Bugatti-makers has stayed flat." He argues that this isn't just about total wealth, but the concentration of it. The top 100 richest people today hold four times the inflation-adjusted wealth they did a quarter-century ago, with their wealth growing twice as fast as the global economy. This creates a scenario where a "much higher and more concentrated numerator (more cash) chasing a ~flat denominator (Scarce Assets)."
The author further notes that these assets are disappearing from the market entirely, shrinking the available pool. Just as Frick's art and Mellon's collection were locked away in museums, modern billionaires are removing assets like Indian Creek Island real estate from circulation. McCormick observes that Mark Zuckerberg's $170 million purchase of a home in "Billionaires' Bunker" is not a real estate investment in the traditional sense, but a move to secure a finite resource. He quips, "$170 million is like one AI researcher. It is less than 0.1% of Zuck's wealth," emphasizing that for the ultra-wealthy, the price tag is irrelevant compared to the exclusivity.
"There is only one Indian Creek Island, and it has only so many lots, especially when you consider how many Jeff Bezos has taken off the market ( three ). Take the money from The Everything Store (abundance). Roll it into Indian Creek real estate (scarcity)."
This framing is compelling because it reframes luxury spending not as consumption, but as a defensive strategy against inflation and dilution of value. However, a counterargument worth considering is that this dynamic could lead to a complete decoupling of asset prices from any underlying economic reality, creating a speculative bubble where value is determined solely by the number of billionaires willing to bid. McCormick hints at this, calling these items "hyperVeblen Goods" where the high price is the entire point of the purchase.
The Global Arena
The scope of this scarcity race extends beyond the United States, with McCormick highlighting the role of Gulf states in the art market. He notes the record-breaking $236.4 million sale of Gustav Klimt's Portrait of Elisabeth Lederer, suggesting that buyers like Saudi Crown Prince Mohammed bin Salman or Abu Dhabi are using art to anchor cultural institutions like the Guggenheim Abu Dhabi. The author argues that just as American millionaires once bought European titles, today's Gulf elites are buying European art to legitimize their cultural standing.
McCormick writes, "Once used to launder class from Europe to nouveau-riche America, it is now playing the same role in the Gulf." He points out that the specific work purchased may not even be the artist's best, but the act of buying a Klimt at auction is the signal. The piece suggests that if the world is moving toward a "Singularity" of abundance, the only rational move for the wealthy is to hoard the few things that cannot be generated by algorithms or 3D printers.
"Klimts don't go up for auction every day, and exchanging abundant dollars for scarce Klimts is a trade you do every day and twice on Sunday. These things are like some hyperVeblen Goods - not only are they more desirable the higher the price, the high price is the entire point."
The author's tone here is almost playful, acknowledging the absurdity of the valuations while insisting on their logic within the current economic framework. He notes that asking if a painting is "worth" the price misses the point entirely; the value lies in the fact that it is the only one of its kind.
Bottom Line
McCormick's strongest argument is the identification of a structural shift where the definition of value is moving from utility to exclusivity, driven by the widening gap between the wealthy and the rest of the economy. The piece's vulnerability lies in its assumption that this trend will continue indefinitely without regulatory intervention or a market correction that re-anchors prices to fundamentals. For the reader, the takeaway is clear: in an age of infinite digital abundance, the most valuable assets are the ones that cannot be copied, and the competition for them is just beginning.