I think, with low confidence, that the framing here is a little turned around. I suspect that people mostly don’t underinvest in things of genuine value because they’re overinvesting in a conspicuous consumption arms race. Instead, they overinvest in conspicuous consumption because they’re having trouble finding things of genuine value to invest in.

The “extravagant houses” example is instructive here. When wages go up, people often find that housing prices near work or preferred schools go up in tandem, so they can’t afford to invest more in this real good. It becomes a positional good. But house construction and renovation don’t become correspondingly more expensive because we haven’t regulated it as much, so to the extent that more of anything is bought, it has to be in the latter category, of only-mostly-positional goods.

Of course if you tax conspicuous consumption you can restore the balance – but it seems to me that the more natural solution is to relax constraints that make real resources artificially scarce.

Similarly, people on Facebook overinvest in wit and cleverness, because Facebook is an ephemeral medium that doesn’t reward writing things that will be of lasting use as references. The solution here is not to regret that wit is appealing, but to regret that creating lasting value is not – and try and fix the latter problem rather than the former.

Your 4th suggestion seems basically consonant with this.