That allows us posters a lot more latitude!
Sometimes it's as simple as plain ol' insecurity and/or the desire to "pull rank" on other people. Same thing (sometimes) for overpriced luxury automobiles, expensive designer clothes, etc. Status symbols.
For some, the needlessly-expensive items make insecure people feel 'special', like they're not part of the everyday rabble. In their mind, that helps them to feel better about themselves. They feel that they have "arrived" and are on some sort of special track.
I guess in a way, that could be a placebo (the old 12-step-program saying, "Fake it until you make it"), except that in the instances I've seen (music & some non-physical psychological issues), it does *not* lead to any actual improvement, and sometimes has the *opposite* effect (they get worse). It's like they're sticking their heads in the sand, proceeding to ignore the actual problems. I'm not referring to physical health issues, I believe placebos can possibly have usefulness there (whatever works, doesn't matter why, as long as it works) ... but in musical issues I'm unconvinced.
More like a blindfold than a placebo.
I believe placebo in music can be detrimental, a hindrance to the person's musical progress.
I know a guy who always bought lots of fancy expensive instruments to show off at various jams and sessions and proceeded to wow everyone - NOT - with his air of superiority, his total inability to keep a beat, argumentative personality, playing way too loudly, refusing to recognize the importance of 'listening' to what the other musicians were playing instead of just bulldozing through the tune, etc. He would have been better off to spend that instrument money on, oh I dunno, perhaps a metronome for starters, but he didn't believe he needed that, he actually believed it was the *other* people who were playing wrong. But in his mind, since he had the better instruments, that made him feel empowered and invincible. He continued on that way for several decades, but he never stayed at one jam or session for very long, he always had a rotation going. (He was kicked out of some of them, and a number of others switched from public jam or session to private invitation-only and didn't invite him - amazing, the power of one person to shut down a jam.) But, he didn't care, his instruments were far superior, other people clearly didn't know what they're talking about since they had inferior instruments, and for him that's good enough. It would be funny if it wasn't also a bit tragic.
He probably *could* have improved, musically and personality-wise, but that would have required admitting to himself that there were problems. I could never even get him to record himself playing an instrument and listen to it for use as a learning device, like most other musicians do, to see what's good and what can be improved. I'm not a shrink but I'm guessing that subconsciously he knew that the contrast between what *he* heard, vs what the cruel mic & recorder heard, would probably have shattered his notions of how great he sounded on his wondrous expensive instruments, and he wasn't prepared to deal with that, so he refused to even try it.
I think those expensive instruments held him back. If he'd been playing some cheap piece of junk (properly set up, of course), he might never have developed any fantasy illusions of how great he sounded, so he might have been more willing to recognize bad sounds and take corrective action with his technique, to make good sounds instead.
Being in denial gets a person nowhere. Having too much of an emotional dependence on a particular tool/instrument, can lead to stagnation. "My instrument is awesome, it will make me sound good, so I don't need to work very hard at improving my technique."
I think to advance musically, a person has to be honest with themselves. It can be scary! Find what needs fixed, and fix it.
Maybe some people don't want to advance musically, maybe they just like to collect stuff. That's probably harmless as long as they're honest with themselves and not trying to fool themselves into thinking "this next instrument is the one, it will make me play better". No. Takes hard work to play better. It's not achieved by just repetitively buying one after another of increasingly more-expensive instruments in some sort of frenzied OCD buying spree.
Right on!
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