THE LUXURY PYRAMID SCHEME: WHY THE SYSTEM IS ON THE BRINK OF COLLAPSE

The phenomenon of luxury brands, which originated in Europe during the era of royal courts and artisan guilds, has evolved into a global industry whose economic and social consequences demand a fundamental reassessment. Contemporary research reveals a paradox: the growth of the luxury market is outpacing the increase in the wealthy population. This is explained by brands' active engagement of the middle class through strategies of "accessible luxury," creating an illusion of belonging to the elite. This phenomenon, firstly, exacerbates economic inequality and, secondly, creates a "financial trap" for the middle class. This article analyses the historical prerequisites for Europe's dominance in the luxury segment and its adaptation to globalization; the competition between traditional and emerging brands; and the impact of the industry on social stratification, particularly through the exploitation of the middle class's aspirational consumption. The findings of the study indicate that, contrary to their rhetoric of exclusivity, luxury brands are dependent on mass demand. Their implemented business model, based on artificial scarcity and the psychology of status, exacerbates household debt burdens and undermines the stability of consumer economies. This calls into question the ethicality of the industry's marketing strategies and underscores the urgent need to reassess the role of luxury within the structure of contemporary capitalism.