The Economics of Status (2006) | Hacker News Reader

The Economics of Status (2006)

daviddfriedman.blogspot.com

53 pointspr337h4m58 comments

I'd like to offer the viewpoint that seeking status is a way to unfortunately waste one's life and brain cycles. Not sure how economists model for the certain amount of people that "don't play the game" simply because there's more interesting things to do than compare themselves to others? There's a tradition amongst some Christians (and probably other religions too), that "we're all equal in the sight of God". Therefore, everyone is a somebody, and simultaneously, a nobody. People that contribute a lot, sure, in some sense they're more "valuable" to the rest of us. They've got a status worth having, but ironically, that's not what those people are seeking, usually its those who seek to help others and are fairly ego-less, that have the best status in other's eyes. I think what everyone should be doing is forget about status, feel happy in yourself, and try to do good for others. ;). Just my 2p.

There's also tons of next-level thinking, i.e. seeking status via appearing to be good, or even by genuinely doing some helping. Charities, concerned celebrities visiting malnourished children in Africa etc.

I think there's a paradox, that only when you do things for others with genuinely no expectation of anything for yourself, do you actually get the most reward out of it (e:g in terms of feeling good about yourself or respected by others etc). As soon as you seek anything.. whoosh it's gone. As human beings we're all too often resistant to doing things for other people, or going without things, for no reward. We somehow get the idea of just looking after number one. In fact , the selfish thing to do is be unselfish, that's the paradox. Personally, (caveat - this is with religious convictions that others may not share) I believe God is both exasperated and amused by our behaviour. He says, "look, if you'd just all be nice to each other and stop being selfish, you know what you'd actually all be much happier.". But its like no-one wants to be the first person to be generous....

I suspect it's almost impossible to escape the status game.

People who play the game of escaping ego often sadly get trapped in a different kind of status game. Think of monks chasing ever great asceticism. Humanists chasing moral purity. Fashion evaders seeking indie brands, thrift stores or other enterprises with the lowest marketing spend.

I’d have to agree. Almost by definition, social organisms can’t escape obsessing over hierarchy. Whether on the African savanna or the corporate cube farm, the most we can hope for are flatter org charts.

As stated elsewhere, flat org charts lead to informal hierarchies which adversely affects already marginalized groups.

Not sure if that's the answer.

do you have some references for that?

But to the authors point, if we allow everyone to subvert status enough and create their own subgroups, then eventually each person will either be at the top of their chosen status hierarchy, or they will be above average in enough subgroups that they’ll be content.

It reminds me of the mathematician’s saying:

“When in doubt invert, always invert”

Some people are visibly working harder for less reward in this game.

I think it is quite possible, but you have to be committed to it and you have to have a bit of contempt for other people's opinions about things that don't matter.

Probably the easiest way to do it is to try and live on as little money as possible, spending money on only things that can be logically justified. Of course you have to be honest with yourself, since self delusion in strong in humans.

I buy very simple clothes, no jewelry, the cheapest food, try not to own more than I need to and try to be rational about housing and a car.

It has the great benefit of not needing much money to live and the freedom that it brings. The rat race is a very real thing.

It doesn't really work if you have a family, or a certain kind of social life, but otherwise it's actually quite fun.

That all sounds like a good way to live :) And a very good idea for nature and the planet to have any chance of surviving humankind's consumption. You can make this work with a family, I feel. At least, we've managed this a bit so far. Although, its quite funny. Charity shops sell lots of excellent nearly new kids clothes. Our kids are fine with those, especially as they see it goes to a good cause and is a form of recycling. Last year my wife found a nice top for our daughter which turned out to be a posh brand. On a non-uniform day a schoolmate said "wow you've got that, you're so lucky" to which our daughter cheerfully replied it was like £1 in a charity shop. Which flummoxed her friend. It's like, that's somehow "not the thing to do" to buy this barely used item at a charity shop. I guess that's all about status? Somehow its low status to buy something at a charity shop even though its pragmatic? But then, increasingly in some countries, second-hand clothes are actually now becoming the fashionable thing to do. I offer this as an illustration of how utterly fickle it is as well. What's high status one month is low another, and vice versa. People are moving the goalposts all the time. Rationally, makes sense to avoid this game altogether.

Small "ancient" tribes are generally egalitarian. It's possible to escape status.

Is there any evidence for that?

As problem complexity grows, there is a need to assemble larger and larger groups to get anything done.

But the fundamental problem of group formation is - people are different. There is a lot of variety within the chimp troupe in terms of traits, needs, interests, values, upbringing, knowledge, skill etc etc so how do groups grow in size without breaking apart?

One way is status signalling. But ofcourse quite often the perks of status make the status signaller forget that entirely.

Veblens Theory of the Leisure Class was written hundred years ago. He felt science and tech would reduce the need for all the economic waste status signalling produced. But keeping groups together is harder than ever.

I don't think about status at all.

dkjaudyeqooe (4445)

If you have ublock installed you can zap these html elements and stop being tempted to look at your social status report card every pageload.

  ! 2021-02-02 https://news.ycombinator.com
  ! news.ycombinator.com###me
  news.ycombinator.com##td:nth-of-type(3) > .pagetop
  news.ycombinator.com##.comhead > .score

I actually really like my social status score.

I used to be very insecure about my communication skills, intelligence, ability to make an impact on the world, etc. Seeing my score go far higher than I ever imagined it would go provides a nice moment of validation that maybe my voice is helpful or at least interesting to some people out there. It also acts as a reminder to continue to carry out the values that apparently got me the high score in the first place, and as a caution against saying things that I might regret.

It's also a hell of a dopamine kick to see it jump more than a few points at once.

The irony is that graduating from the status game is one of the most rational things a person can do to fully realize their humanity, but the tyranny of the status game is argued to be inevitable by "rationalists" who'd then turn around and complain that people don't act rationally often enough in other situations. Your need for status is just another way that you're vulnerable to being manipulated by others, albeit highly indirectly. It is true: you need a certain amount of status to do things, but the amount is different for everyone.

Staying trapped in the "everything is status" mindset is just projection, ultimately.

I think what everyone should be doing is forget about status, feel happy in yourself, and try to do good for others. is essentially the Christian message.

I welcome a day when people who attempt to do good have more status than people who are famous for sex tapes, viral videos, or some other fad.

> There's a tradition amongst some Christians

A minority maybe, many religions like Catholicism have built in status hierarchies that are foundational to their core principles. You may be all equal under the sight of God, but some are more equal than others.

This could go wildly off-topic... but.. when you talk of Catholicism having status hierarchies, as someone from the Catholic tradition myself it seems to me that most (at least here in UK) do believe precisely in "everyone is equal in the sight of God". That is rooted in Catholic teaching actually. Maybe you're referring to women being treated as 2cnd class citizens? Which is indeed a massive problem. From experience discussing such things, most Catholics at least here in the UK seem to see absolutely no reason why women couldn't be priests, the powers-that-be just keep it the same because "it's always been that way", or they fear splitting the church over the issue. Which is not right, needs fixing, gets ever more embarrassing every day. You may also be referring to homophobia, which does exist among people in the church - although I dunno if its worse amongst believers than no-believers, just looks worse , more hypocritical / strident when done by someone who claims to believe in being nice to people. My view on homophobia is it stems from people being either being (a) secretly "scared" they're gay themselves, and not comfortable with that or, (b) actively using it as a shield to hide their own crimes (e:g Cardinal Pell delivered ultra conservative homophobic rants probably as a way to distract others from what he was up to behind closed doors leading to abuse conviction). Otherwise, why on earth would any straight person have any reason to be mean to someone that's gay or fear them. I know its all different in USA , there's a big strand of ultra conservative Catholics who probably do believe in hierarchy . Not sure they're actually following the Catholic faith though, or doing anything worthy of the title. Just like people in the Middle East killing each other are not following their religions, all of which officially preach peace.

This idea that everyone is at the top of a different status ladders appears to be the same basic thesis as the essay "Melancholy of Subculture Society" written by Gwern [1], which fleshes out the idea further and presents this as an ever-powerful force in the world driven by the Internet. I'm not sure I agree with it fully, but it's an interesting idea. I especially like the way the author wrote this paragraph:

"... Harvard had, in at least one interesting way, the perfect social system: Everyone at the top of his own ladder. The small minority of students passionately interested in drama knew perfectly well that they were the most important people at the university; everyone else was there to provide them with an audience. The small minority passionately interested in politics knew that they were the most important ones; their friends were there to be herded into meetings of the Young Republicans and Young Democrats in order to get them elected to positions in those organizations that were the stepping stones to further political success."

[1] https://gwern.net/subculture

The concept brings to mind Frederic Laloux's thesis of an ecosystemic organizing principle. Essentially, the idea is that corporations get meritocracy but have trouble valuing everyone's humanity, while collectivist orgs value everyone's humanity but have trouble distinguishing competent from incompetent or defining spheres of responsibility. If I squint, his idea of a 'next step' that can recognize the value of everyone's unique humanity while also recognizing relative competence does look like the picture your quote paints.

Everybody's trying to find status, belonging, being somebody special - something that boosts their ego, essentially. It reminds me of C. S. Lewis's essay "The Inner Ring" (at https://www.lewissociety.org/innerring/ ).

Paraphrasing anonymous' comment. The article mixes two different concepts about status:

self-esteem — how highly you regard yourself

reputation — how highly others regard you

Reputation is more of a pecking-order which implies zero-sum.

By choosing to belong to a group, then perhaps your status within the group is also more about how reputation is scored within the group. How you rank yourself can be rather different from how the group ranks you.

Reputation is not zero-sum. Say I know 10 people and consider them to be of a certain reputation. Next, I get to know 10 more people and also consider them to be of a certain reputation. Does this mean that in the process I have to halve the reputation of the first 10 people in order to not run out of available reputation? That is what the word zero-sum actually means.

No, it means that your pecking order now has 20 slots on the status ladder instead of 10. The individual placings still depend on the status metrics being applied.

This is zero sum because the pecking order is a linear ordering. If one person moves up someone else has to move down, and there's only room for one person at the top.

Real reputations don't work as nakedly and are more fluid, but the principle still applies. No individual can simultaneously be top, middle, and bottom of the same reputation order. Everyone gets one slot, and the relative reltionships are one dimensional.

Zero sum is about differentials, not about absolute rankings in some (impossible) objective sense.

That's not usually what zero sum means though. The idea of zero-sum is that in order for one person to gain, another must lose. I don't lose respect for someone when I gain respect for another person. It's the same idea when talking about the economy. You can rank everyone by the sum of their assets, but wealth isn't a zero-sum game (long term).

If it was about differentials, then there would exist no non-zero-sum anything.

Also, reputation is not just a peking order. It's entirely possible for me to know 20 people and trust none of them to not steal from me. Just because 1 of them is technically my most respected, doesn't mean they are respected enough. There is an element of absolute in terms of reputation.

I suspect you are trying to be technically correct.

The usage of the term "zero-sum" has a wider meaning in usage. It is commonly applied to games where there is one winner - because simplistically one person wins and everyone else loses. Games are often ranking systems and who gains and who loses is more obvious than many other situations in the wider world.

> Also, reputation is not just a peking order

I think it is pretty clear we know that. It is almost the point of the article!

You are trying to nitpick against everyone's nebulous non-academic usage of words. Yeah, it is hard to understand what people really mean, but HN is one of the few places where it seems the norm is to try to.

> wealth

You have chosen a nebulous word and then straw-manned it. Wealth is adjacent to this argument - most of the points about reputation could be equally argued about wealth.

Mostly when talking capitalism it is better to use the word "money" because that can be ranked (comparison between disimilar things is almost money's core feature).

If a significant part of wealth depends on reputation, and if reputation is strongly ranked then wealth has a top limit. Yeah, apples and oranges, but the concept of wealth being larger or smaller contains its own self-paradox.

The problem is that people are seeking self-esteem by means of high reputation. That makes their self-esteem a zero-sum game also. That's not a wise game to play.

Most of the consumption in the western world, is done to increase status in some form or another. Conspicuous consumption of clothing, hand bags, housing, cars and travel, is literally destroying our planet. Increasing the number of dimensions people can use to seek social status, is of vital importance to reduce damaging conspicuous consumption. Research in the field of social status and happiness, is just as important in order to reduce co2 emissions, as research in green tech.

When my family travels, I don't believe we do it at all with status in mind. In fact, from a safety/opsec standpoint, I try to keep my travel entirely a secret until after it's completed.

If you look at the cars we drive (a 2005 Honda CR-V and a 2015 Nissan LEAF), I doubt any significant status is accruing to us from those choices. [I am much more often asked "why do you still drive cars like this?!" than "Oooh, nice car!"]

My ideal condition would be to have assets that would be able to provide a fully secure income stream in retirement but for no stranger to be able to reasonably guess that we have that.

This entire comment is actually signalling status.

Yes, making sure to fill up the oil before loading two kids into the rusty, 19 year old, 235K mile CR-V to drive 750 miles to see their grandparents, while trying to not have someone break in and steal their stuff.

High status, conspicuous consumption, gram-worthy life, indeed.

Yeah actually. The key is the phrase "why do you still drive cars like this?" It's not because you have to, but because you are signaling that a car as a status signal is irrelevant to you. That's actually the next level status signal :)

It's probably driven much more from being an optimizing engineer (alternatively phrased: a cheapskate) and wanting to spend as little as feasible on reliable transport in order to funnel more money into retirement savings/financial independence.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

Not taking a side, but to understand the comment you are replying to, you would do well to look up the concept of countersignalling.

Does counter-signaling require intent or only action?

A. If I care what people think, but work to communicate that I don't, that's pretty obviously counter-signaling.

B. If I genuinely don't care what people think, but my actions are outwardly indistinguishable from those in A, is that counter-signaling?

This sounds equivalent to "Is signaling about the signal-giver or the signal-recipient?"

Indeed it does. If I practice haruspicy*, in so doing am I receiving signals from the gods?

* - the inspection of the entrails of sacrificed animals

It might be signalling status, but I don't think it's fair to assume that was the motive of its author.

Of course, so is your comment here :-) (and mine, too)

Yes, but. If you find yourself in a more eco-friendly community or social circle, then status is measured in the opposite way. That person who doesn't own a car, bikes to work, buys used clothing and books, gardens, lives in a small house, etc. achieves a higher status.

Making social status depend on eco friendly choices, would help reduce co2 emissions.

David Friedman runs interesting slate star codex meetups periodically, where I've met a lot of interesting people. Recommended to attend if you would like to meet well-read people with all sorts of new ideas.

> How much one employee is paid is often less important to him than how his pay compares with that of other employees.

Is this actually true of most people?

There is evidence of jealousy behaviors in our closest cousins, the chimpanzees. You can imagine how much that feeling is amplified within humans.

I don't think it's as much jealousy in this instance as it is a dislike of unfairness.

My tech lead earns more money than me. This is absolutely acceptable to me because I am aware they are better at programming and they have more responsibilities than me.

If I found out a coworker at the same level as me was earning more than me I would be upset with that situation.

Somewhat. It's not a binary. At the lower end you absolutely need a minimum level of pay just to survive. As you get higher up the earnings tree it becomes more and more about status and less and less about actual spending.

In the middle you get people on mid-six figures complaining about the cost of housing and school fees - which is an interesting mix of humble status bragging and genuine concern about limited disposable income.

By the time you get to billionaires it's a childish status pissing contest with numbers that are almost meaningless in real terms.

Isn't the Guinness Book of World Records like this? in the sense that it gives people the opportunity to find something nobody else has done and gain some kind of status that didn't really exist before.

I absolutely loved watching the show "Record Breakers" as a kid, we should try to expand opportunities in this way it seems very positive for society.

The OP has a useful framing of status being attributed in verticals but we'll still (illogically) struggle with this logic. Inwardly we'll compare the status of a doctor, lawyer, or software engineer vs. our profession like a game of Top Trumps.

Status games are fundamental evolutionary behaviours however much we want to believe otherwise.

Here are a couple of relevant pull quotes from https://www.robkhenderson.com/p/what-is-social-status:

"Research indicates that our brains spend about 50% of the time mind wandering. Researchers find that the areas of the brain that are active during mind wandering overlap with the areas of the brain that concentrate on our social lives and ourselves. Left to your own devices, with no task demanding your immediate concentration, you tend to spend a good deal of time thinking about other people—your judgments of them; their evaluations of you."

"So what did status get our human ancestors? Resources, allies, territory, mates, and, most importantly, offspring. The idea is that humans who cared a lot about status were more likely to win romantic partners and thus had children who also cared a lot about status. It’s possible that there were early humans who didn’t care much about status or reproduction. They might’ve only cared about safety, survival, and didn’t concentrate on attracting mates or having children. They didn’t reproduce. Those early humans are not our ancestors."

Interesting read. I’ve thought much of this myself. Living in a consensus / conformist culture (Sweden) one of the things I dislike the most is that it’s very much “single ladder” and zero sum oriented. But hopefully that’s changing to some extent now.

What annoys me most is how status and one's ability to earn money have become intertwined. It would be great if they were separate; then those who seek money without status wouldn't have to compete with so many reckless, cheating, psychopathic status-seekers.

I guess the silver lining is that one's ability to spend money efficiently (to maximise satisfaction per unit of currency) runs opposite to one's desire for status. There are so many ways to get great value from little money nowadays... Precisely because rich status seekers aren't interested in high quality no-name goods, services and destinations. That's where all the real value is.

Real value is essentially wherever the rich people aren't.

Everything rich people want most is overpriced by definition because they create inflation in the markets they participate in. Then they stay trapped in those markets because of social peer pressure. 'Decreasing marginal utility' is a euphemism for inflation. That's why I try hard not to participate in the same markets as rich people when buying stuff. I want to earn my money working for rich people and spend it buying stuff from poor people.

This article appears to be setting up debate over the meaning of a word without defining the word or outlining tests to tell what the word means to the author. The points being made are meaningless without more foundational definitions. Knowing whether status is a zero-sum or positive sum game requires knowing what the rules are. Unfortunately the word is so fuzzy that I don't think a HN comment can usefully outline what it means. And in some sense, useful discussions of status mechanics are taboo, people get uncomfortable and high-status people tend to dissemble on the topic because nothing good can come to them from more people understanding the game.

Friedman explicitly acknowledges the lack of definition with: "One conclusion is that the last thing we want is a system for objectively ranking people, for defining status in a way that everyone agrees on". That is the sort of thing I mean about dissembling. Society is actually quite cruel to delusional people who misjudge their own status or don't bend to the commonly accepted status tells. Status is communally held and not just in one person's head; individuals will be given hard feedback until they conform to the externally developed status hierarchies. Their beliefs do not overrule the collective belief of their status. Evolution has also made humans remarkably sensitive to status signals and hints from the people around them to try and stop misalignments.

I completely disagree that status is not a zero-sum game. It definitely is!

Think about an individual's status as positive attention given to them; total number of person-hours dedicated to thinking positively about that specific individual. The amount of attention of all people on earth, especially positive attention, from which status is derived, is a limited resource. If current online celebrities are capturing 90% of all online traffic and consumers are already glued to their phones, then if I want to capture 20% of all online traffic, it means that I MUST steal some traffic from current celebrities. Existing consumers cannot create more hours in their days and they need to work for a living. The only way to get their attention is to redirect it away from other people/things towards me. Zero-sum game.

Suggesting that status is not a zero-sum game is laughably wrong. Does anyone actually believe that every person on earth could be famous? Is your own brain capable of even memorizing the names and faces of 8 billion people? Most people can barely remember 1000 people's names. Celebrities have to compete for these limited slots.

Look at that, a mini HN with comments on a blog post.

Who defines status?

Who defines love, fear and jealousy?

I am not sure what do you mean by your question. Exact definitions of societal phenomena are rarely possible and usually unhelpful; humans are very far from pure maths, where exact definitions matter the most.

Or are you looking for people who determine what counts as high status in certain groups? That is a more interesting question. It seems to be a somewhat emergent phenomena, but a bit malleable from the outside.

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