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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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