Friday, April 26, 2013

Status vs. Status Goods

Relative status is a fixed-pie, zero-sum game. If there are ten people in my toy society, there will be no more than ten rank-order positions to fill. You can't create more relative status than exist agents.

Status goods have no such restriction. Like any other kind of goods, production and trade are positive-sum. Moreover, relative status using positional goods is multi-dimensional. I can be the flashiest trout fisherman on the lake in my decked-out gig bob with the flames and the lightning bolts airbrushed onto the gunwales, but the second I pilot that demonbane sucker up to the yacht club, I'm about as posh as grey dishwater. Diverse status goods allow folks to participate in more and varied status contests.

Or to refrain from participating whatsoever.

That's one of the great things about a thick economy. We're free to select the subculture in which we are most comfortable participating. Tyler Cowen notes in Create Your Own Economy that it's easier than ever to fashion the tapestry of your consumption. Some of that will be purely utilitarian, some will be for signaling, and some will be experimentation. Some will be an admixture of all three.

The alternative, the BATNA if you will, is rank ordering based on something else. You can't simply wish away the desire to obtain relative status. If not on personal possessions, then on what shall rank-ordering be based? My research on PNG cultures suggests violence as a likely candidate.

No thanks. I think it's more euvoluntary to have many leather-bound books and my apartment smells of rich mahogany.

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Do you have suggestions on where we could find more examples of this phenomenon?