My watch is a wondrous thing. It tells the time and the date and the day of the week. It has a stop-watch, also an alarm to wake me in the morning and it sounds the hour with a beep-beep. It cost something like $19.95, but then it does lose 5 seconds a year.

I bought my watch about three months ago. Up to then I had not paid much attention to watches--digital or otherwise -- and I assumed, because this is the way it is with most things in life, that in general the more you paid for a watch, the better the watch you got. This is no longer the case.

The plain fact is that a watch that costs $20 will keep time as good as -- or better than -- a watch that costs $1,500. For this reason, it makes no sense to buy the Piaget Polo at $11,900 or the Longines Conquest at $595 or the Girard Perregaux Sea Hawk III at $2,750 for him or $2,450 for her -- all watches advertised recently in the newspaper.

Obviously, these are very expensive watches and the people who wear them are trying to tell you that. But even more moderately priced watches also have become statements about affluence since they, too, will not keep time any better (or even as good as) my $19.95 cheapie. In fact, wristwatches have now become articles of conspicuous consumption. More than almost any other item you can think of, except for plain old jewelry, the watch has become a way to show off wealth.

It will be interesting to see what will happen to the watch industry once it is generally understood that paying more for a watch gets you nothing more than a bigger bill. Will it mean that the manufacturers of expensive watches will go out of business? Will it mean that everyone will take to wearing cheapies on the wrists -- or, just for variety, the somewhat more expensive models with built-in calculators.TT he answer, probably, is no. T Americans, not to mention Europeans, have already shown a terrific talent to rise above technological innovations that have made things both cheaper and better. As Alison Lurie points out in her book, The Language of Clothes, conspicuous consumers faced a real crisis a while back when synthetic materials and new technology made it possible to manufacture cheap replicas of expensive clothes. It became hard to tell who was wearing what -- what was wool and what was not and what was expensive and what was cheap.

This predicament, Lurie writes, was solved when the label was moved from the inside of the garment where it could not be seen, to the outside, where it could. It was not enough to have an expensive Gucci handbag if no one knew it was a Gucci and, ergo, expensive. So the Gucci monogram was put on the bag. Similarly, manufacturers put their monograms or little animals (alligators, polo ponies, hedgehogs) on their goods, alerting everyone to the probable cost of the item.

This insanity has even changed the concept of a bargain. Where once a bargain was getting something for less than it was worth, now it is getting something cheaply that should have been cheap in the first place. People in New York, for instance, go down to the Lower East Side to buy clothes with designer labels for less --sometimes much less -- than they would pay uptown. They could, of course, have the same item or even a better item for less if they were willing to do without the label. You think Gloria Vanderbilt makes better jeans than Sears?NN ow, probably, the same thing is N going to happen to watches. What's the good of having a Rolex when a Rolex is not going to keep time any better than a $19 cheapie? The apparent answer is that the name Rolex means it cost a lot. A Rolex may well be a wonderful watch, better than most, but it is not better at telling time than the $19 cheapie that also goes beep-beep in the night.

The upshot is that the watch has become a way to make a statement. An expensive watch used to mean that you had money -- maybe a lot of money, maybe not, but at least enough to buy a good timepiece. What it means now, though, is only that you are willing to spend a lot of money to make people think you have a lot of money. For this, though, there is nothing like a really cheap watch. People know you can afford better, but not how much more. These watches are more subtle.

Also they tell time better.