Gracesgran: " I think "getting the message" means clear thinking and we don't educate for that; perhaps the Scandinavian countries do.”
I have been increasingly taken by the idea of status competition as a way of looking at economics recently. I started out reading evolutionary biology, and then moved on to evolutionary psychology.
In essence people compete for status because higher status individuals obtain access to higher status, better quality mates. Now there are many ways of competing for status, but a consumer society is one in which the main method is consumption of goods. People are trying to consume more than their peers because that earns them more status, but the problem is that status is what is called a zero sum game; you only get more at the expense of someone else getting less. The Ford Sierra that satisfied when the neighbours all had Cortinas, looks a lot less appealing when everyone else has a Mondeo. The Smiths are only happy when they have more than the Jones’, but the Jones’ are only happy when they have more than the Smiths, so they’re locked into a competition to consume more and more, and wrecking the environment in the process, when no amount of wealth can ever make them both happy at the same time.
The term conspicuous consumption refers to whether the value of a good is judged in absolute terms or relative terms. Something like a central heating system for example is judged by how well it heats the house, and not whether it’s bigger than the neighbours, so that’s an example of inconspicuous consumption. A house or a car, however, are conspicuous because their value is determined by whether they’re bigger than other people’s. Since it is the conspicuous items which contribute to status, people will always tend to preferentially spend on these in favour of inconspicuous ones, even if it’s not in their objective best interests to do so.
This is why people get so irate about public spending: public spending elevates the wealth of the collective community, whereas private spending elevates your own wealth (and status) relative to that of others.
Conspicuous leisure is another canon of status competition: having enough wealth not to have to spend time on the vulgar process of earning a living is a status symbol, as is the wealth to pay others to do menial jobs for you. This then results in useful jobs and skills having low pay and status (plumber, builder, engineer etc.), whilst less useful jobs and skills assume very high status (pop star, footballer etc.).
Another method of status competition is conspicuous outrage, which derives from the psychology of conformity. In society people are under huge pressure to conform to what others do and expect, the price for not doing so can be dire. Therefore high status individuals can demonstrate their status by doing something outrageous to show that they don’t need to conform. This is what leads to fashion. A social elite will assert their status by doing something that is different, and then people beneath them will copy that behaviour in the attempt to acquire some of that status. However, the name of the game is to look like those above you and different from those below, so as fast as someone is copied, they will change their behaviour for something new. In this way fashions ripple their way down through the social strata from top to bottom, one after the other. The more wealth people have the faster fashions can change.
The problem with status differentials is that if they become too large, they lead to all sorts of social ills as Wilkinson and Pickett show in The Spirit Level. Famous research by Marmot has shown how low status leads to higher morbidity and higher mortality, quite independently of wealth. This is something that the Scandiavians appear to understand, but not us. If Wilkinson and Pickett’s work interested you, try reading some of these:
Marmot
Miller
Pinker
Veblen
Frank
Schwartz
Diamond
Kahneman