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Ideally you'd channel the status competition down routes useful to society  - which is the real value of philanthropy of course - rather than into damaging behaviours.

But you're right that the current rules reward sociopathic behaviour rather than punishing it.

by Colman (colman at eurotrib.com) on Tue Dec 4th, 2007 at 06:54:44 AM EST
[ Parent ]
Here's the ironic thing about this.  Capitalism is supposed to make mean more peaceful by taming the passions (i.e. I'm going to get glory by killing those heathen mother fuckers over there) that depend on the relative position of oneself to others, by the interests (i.e. I'm going to make a million dollars, and I don't care how much the rest of you make.)

So spoke Albert Hirschman in The Passions and the Interests in which he traces this idea from the 17th century on, showing that before capitalism was justified on the basis of efficiency it was justified on the basis that it was a more peaceful way than the blood and iron of the earlier period in which the passions were central.  

I can't locate the diary now, but Martin Wolf made this exact same argument recently in the FT, making the point that it's much better to live in a world in which people seek status through wealth than by war.  Schumpeter made much the same point earlier, and would seem to be the source that Wolf drew from.

Now, the interesting thing is that it just may be (and probably is) that as economic inequality increases you have the rise of these other ways in which to pursue status for those disenfranchised by the market.  One way, socialism, seeks equality, the other way, fascism, creates an explicit in group (Aryans, etc.) that is equal and an out group that is supposed to be exploited and/or exterminated for the benefit of the in group.  Capitalism gives us fascism, because it isn't concerned with economic distribution, only total economic output.

Status seeking is part of most human existence, but this points to the need for a recognition that you need social rules and social order that is both collectivistic and egalitarian, you need social democracy.  Liberalism is a failed ideology, the choice is between social democracy and fascism.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Dec 4th, 2007 at 10:15:19 AM EST
[ Parent ]
I believe in a growing economy it is possible for people to lose status but still increase their standard of living in real terms, and so growth can lead to more social mobility. On the other hand, when growth stops the only way to retain one's standard of living is to concurrently compete for higher status and, as growth is captured by those at the top, social mobility ceases.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2007 at 10:34:43 AM EST
[ Parent ]
Unfortunately, you're missing the point.

Economic growth is fundamentally anbigous, because it doesn't distinquish between economic output that is material (i.e. bread) and economic output that is positional and must come at someone elses expense.  All goods have components of both, but some are more pure cases.  Education is largely a positional good.  Most people get a university degree not for the love of knowledge, but in order to improve your position relative to others.

The higher the level of economic inequality, the higher the percentage of economic output dedicated to things like Lexuses (Lexi?) instead of Olive trees.  It's about stroking people's egos, and the ostentatious display of wealth in order to convey status instead of making sure people have enough food to eat.

In a world where only absolute gains matter, economic growth is great, because it makes everyone better off.

But in a world where relative goods are what is driving economic growth, economic growth is a zero sum game.  In order for one person to be better off, another must lose.

Social mobility is relational.  It's about the social distance between persons.  Where you have a large middle class, this distance is small, and you don't have the idea that this person has extreme wealth and should be respected, and this person is poor and can be treated like shit.  Capitalism becomes a threat to democracy where it creates economic inequality, and makes some animals more equal than others.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Dec 4th, 2007 at 10:51:07 AM EST
[ Parent ]
Education is not positional in the same way as a Lexus. For one thing, as someone said, if we exchange ideas we each end up with two ideas, whereas if we exchange cars we still have one car each. In fact, now that so many people go to college, a university degree is not even a positional good. It's an entry requirement.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2007 at 11:21:18 AM EST
[ Parent ]


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