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The Economics of Status (2006) (daviddfriedman.blogspot.com)
72 points by csense on March 5, 2017 | hide | past | favorite | 55 comments


The conclusion that there is no truly hierarchical measure of status, because there are fractally distributed groups for which you could have status within, is wrong on it's face.

As an example, nearly everyone on the planet knows who the US President and Pope are and recognize them as the highest status (even if you don't like them - don't ask me why this is). If one of those people walked into any of those smaller groups, they would inherit the highest status immediately, without having to do any of the in-group activities.


Talented Actors and salespeople are often able to capture what they call "local star power" : situational periods of top status based on charisma or relevant skill. But local status is usually fleeting compared to global status, which is generally determined by some combination of power and attractiveness to potential mates. It doesn't matter if you crown yourself King of the Middle Kingdom if you have no desirable courtiers orbiting your throne. So there are many different nested and intertwined status hierarchies (athletic, scientific, creative, etc), but not nearly enough to accommodate most status-seekers. Intentional communities - often religious - are one of the few examples that subvert external status criteria successfully over significant periods.


Well put. The author of the piece seems to errantly assume that because there are local maxima, it eliminates the idea of a global maximum.

Unfortunately this concept holds neither in mathematics, nor within the psyche.


But there are lots of ways that relative status really matters in a not-just-subjective way.

If a number of people are competing with you, your relative status within the group is an important factor for determining winning conditions.

If ten people are competing for one job, none of them have any reason to care about an effect which, say, increase the education-level of all of them. But each might be willing to take a class if it increased their chance of getting the relative to the other.


Relative status is what matters. The author, being an extreme libertarian, is uncomfortable with that idea, because he doesn't want to admit that relative wealth and wealth inequality, matter.


Going though the comments, it seems like few agree with the the article, yet it has been up-voted to the front page. I guess the people who are voting are different from those who are commenting. People who like the article are less inclined to comment, but rather vote.


One might upvote for different reasons rather than agreement. I've upvoted submissions because I disagreed but still found an interesting argument, or because it generated a good discussion in the comments.


Status seeking, being inherently zero-sum, is a pursuit that will only leave you unfulfilled in the end. In fact, I think the very fabric of human existence is predicated on this inequality that status emphasizes.

As for myself, I try to fight against it by refusing to share information that's not contextually relevant. It kind of sucks sometimes, but I think it's the "status-free" way to do something. Living in MA, I always manage to be amazed as some Ivy-League graduates slip the fact that they attended an Ivy League school into a conversation that has nothing to do with their education or pedigree.


Did you read the article? The whole point was that status is NOT inherently zero sum, since everyone uses different criteria to determine their own status.


Yup. I disagree with it, obviously. I don't think the author gives sufficient evidence to prove that it's not zero sum. Can everyone be of high status? The answer is obviously no. Like I mentioned before, the very idea of status to begin with is relative. If status is not zero sum, that means that everyone can be of "high status". I believe such a thing is nonsensical, and so, impossible.


The argument he makes, that you have apparently missed, is that which values constitute status are different for different people.

I think you're low status because you can't crush 300kg deadlifts like me, you think I'm low status because I don't appreciate classic music like you.

Everybody can be high status if they care to define status in terms of the things they're good at.


The problem with that argument is that status isn't determined by the person seeking it, it's determined by those deciding whether to mate with the status seeker. That's where our hardwired impulses toward status seeking derive from...our need to perpetuate the species.

That doesn't mean that it's necessarily zero sum, but it means we're not completely in control of framing it the way that you and the article are suggesting. But you are right that there are different dimensions of status because different people value different characteristics. Some people are attracted to strong men that can lift 300 pounds and others prefer the refinement of a knowledge of classical music. But if you choose to define your status to far from the societal norms, you won't find others that agree with that framing and you'll be isolated out of the gene pool.

This is somewhat of an oversimplification and we use status for more than just mate selection, but our dimensions for status seeking are still based on how we want to attract sexual partners.


    > The problem with that argument
You haven't actually outlined any problems with that argument, you've simply stated that status in the eye of the beholder isn't perfectly aligned with that of the status holder.


You said:

> Everybody can be high status if they care to define status in terms of the things they're good at.

I'm arguing that you don't get to define status for yourself, so there are limits to how you can distinguish yourself and still claim status. You have to be graded on a recognized dimension of status. That makes it virtually impossible for everyone to be high status.

Also, certain dimensions of status are far more universal than others. I don't care how much you can bench press, you're going to be almost universally seen as lower status than a handsome, movie-star actor. Those dimensions of status are so widespread that you really can't define your way past them.

And it works in reverse too...certain dimensions are almost universally unrecognized. For example, I can hold my breath for just over 8 minutes. That puts me in elite company and people are almost always impressed by it. A couple of decades ago, going that long without breathing would have met the medical definition of death despite my never having lost consciousness. But I can assure you that it confers basically zero status, no matter how much I'd like it to.


> But I can assure you that it confers basically zero status, no matter how much I'd like it to.

You could learn to free dive in a couple of weeks and use your capacity for breath holding to get yourself on most countries' national team (doubt that would cut it for the US team, but you could win some regional meets). Being a national athlete confers decent status, more so if you pick up a medal.

From a quick Google for an example, the current NZ and 4th global women's record for women is 7 minutes 45 in static apnea [1], and she easily beat the men's champion, so 8 minutes would presumably be very good. I'm basing the mapping from "apnea capability" to "free diving capability" off what a free diving friend told me.

(I don't disagree with the rest of your point.)

[1] http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&obje...


Heh...freediving is the context in which one learns to hold his breath for that long :) Unfortunately, my static times don't translate as well into dynamic times. I'm basically limited to 2-3 minutes underwater when I'm moving. My PB for depth is around 50m, which is nowhere near elite.

I basically came to freediving too late in life to ever be world class in any of the disciplines. The funny thing is that, when it comes to status, what little my freediving training has gained me has come from the associated weight loss.



The argument is weak. Basically : just choose the status you're happy with and you'll be king. Except that you don't choose your status, you earn it. Except that society won't reward your own personal little status. Etc.


I didn't miss that argument. I just believe it is irrelevant. Status is still zero sum. Creating arbitrary criteria for status does not mean said criteria are not zero sum.

As for the hypothetical situation you mentioned -- no, everyone would not be high status. Say you had three people who liked running, football and computer science respectively. It may be true that they do not "compete" with each other for status, but assuming they're in a system in which there is at least one other player in their respective fields: running, football and computer science, status would still be zero sum.

In the situation in which they are the only player, that would mean the status that they are deriving is not coming solely from what they are doing, because if it was, there simply would be no status to begin with.

---

Of course this premise that you can get your status solely from a single thing with no residual effects from the "greater life" or context itself is pretty ridiculous. So in the case with the running and football, they're both athletes, so even though they're different sports, they still share the status pool. Similarly, computer science and athletics are both school extracurriculars. Expand out until you get to humanity. Zero sum persists.


No, I think you're missing the beauty of the system, which is that although there might be a global average status that is truly zero-sum (you can't increase your global rank without pushing someone else down a position), if status is indeed multidimensional, then every person can search for some community or group that will give them status within that community.

In in practice that is the case. Most people in the world won't care to have this particular discussion with me, but here in HN I can find like-minded people and hopefully get sweet posting karma.

That allows people to focus less on the global zero-sum status game, and more on finding a community or group that they can usefully contribute to.


What use is a high status in a (hypothetical) group with effectively zero influence? One's status is only as useful/important as the people who ascribe it to them.


People care about status in groups that they either care about or benefit them, and that is sometimes independent of that group's 'global' influence.

The most simple hypothetical example:

There are only two people in the world, Adam and Jane, and they form two 'groups', A and B, with 2 members each.

If Adam values group A more than group B, and Jane conversely, then we can see that the most efficient 'status allocation' is for each to work for higher status in their respective groups.

This avoids the zero sum situation where both Adam and Jane care equally about their status in the same group.

You can see this in practice playing out -- every person is nominally a member of many different groups (their PTA, their HOA, country, city, family, company, work team, etc.), but they're ok with being low or average status in most of them and put their energy in status in groups that really benefit them in some direct way.


I'm not sure I get your example.

If groups A and B have 2 members each, but one of the members cares about the group status, while the other one doesn't, don't they effectively have only 1 member?

I.e. group of "me and someone who doesn't care" would just be a group of "me". Then that group isn't useful to be high status in, since it doesn't offer any extra benefits (a group of "me" can't do more than just me).

If the weights weren't 1 and 0 for A and B respectively, but something like 1 and 0.5, then the group's value would just be (status within the group) * sum(participants sans self * their weight * their influence). (assuming influence can be quantified somehow)

Then if I gain status in a group, and other members of the group lose a bit of their status, I can evaluate the gains and losses and the sum will be 0.

To get the global status I just sum the results for all the groups I'm part of, and compare to other people.

So a person A can be highly regarded in a paper airplane folding club, but unless there's a surprising number of top politicians/lobbyists/whatever who care about the club a lot, person B who plays golf with Donald Trump will probably have higher global status.

-----

Looking at it now, I guess you could say that the global status is technically non-zero sum, since it will inflate with creation of new groups.

Maybe the weights representing how much people care should need to sum to 1 for every person, that would solve the inflation? Then it only inflates when new people appear.

Anyway, the global status is just a ranking showing who can "move the most pieces", as it were.


Status is in the eye of the beholder, not the mind of the beheld.


Even if you replace one definition of status with many (seven billion?), each one of these new definitions is itself zero sum.


I used to know that guy when he was King of the Middle Kingdom in the Society for Creative Anachronism. He was an extreme libertarian long before it was fashionable. He wrote "The Machinery of Freedom" in 1971. It's an extreme expression of "markets can do anything".


Status is closely related to authority and power. I'm not going to pretend I'm the top of a ladder and have power. Power is a real objective thing and it is a zero sum game. We must not let people get so powerful, no matter how "nice" they are. That's the real argument for equality, but more importantly equity.


Ah, but the problem with discussions of status is that "not chasing status" is a status in and of itself. It's status all the way down!!

You will never get rid of it.


"You cannot not communicate" -- Paul Watzlawick[1]

Incidentally, most of his writing is pretty amazing. "How Real is Real?", for example.

One of my favorite example is the experiment where two people are (ostensibly, as in all psychology experiments) asked to figure out how to spot disease patterns in certainly images of blood cells.

The experimental setup is that subjects A and B each have a screen a button to indicate whether the picture shows a diseased or healthy cell and a light showing them whether they were right.

The nasty bit is that whereas A's light is hooked up to his answers, B's light is not. It is also hooked up to A's and they aren't shown the same pictures. So A gets proper feedback whereas B gets essentially random feedback.

Since the task is not that hard, the As quickly figure out the simple rule, whereas the Bs concoct ever more elaborate theories.

The really nasty bit is that they then bring A and B together to discuss and present their findings. And it turns out that the Bs almost without fail convince the As that they are wrong, because how could such a ridiculously simple answer be correct, whereas the As are convinced by the sophisticated answers the Bs have come up with.

Explains so much.

[1] https://en.wikipedia.org/wiki/Paul_Watzlawick


Interestingly, the reason 'not chasing status' is a status signal itself is because it shows that you are confident enough not to worry too much about status, kind of like stotting [1].

[1] https://en.wikipedia.org/wiki/Stotting


I don't know... I don't think some guy who runs off and lives in the woods on their own is involved in the status game (it takes at least one other person for status to be a thing).

But yes, if you are involved in society, then you can't avoid status entirely.


See "Impro: Improvisation and the Theatre" by Keith Johnstone for an excellent discussion on status.


Genuine question: I've never understood the non zero sum game idea in the context of economic inequality. If I win more than you lose, overall it's a non zero sum game, as in, our combined gaines are greater than before (the pie is larger), but you still lose(you get a smaller piece). Would someone be interested in highlighting some counter arguments to this?


The idea of non-zero-sum games is that a regulator interested in public welfare would still let the two people you described play that "game," and then would be able to tax and redistribute in such a way that both "players" are still better off for having played.

With zero-sum games the habitual loser would eventually wise up and wish to stop playing


Not sure I understand your point, in a zero-sum game the third party could still do some redistribution to keep the habitual loser "in the game"

Update: scratch the above, you're right. But in my experience the ones arguing that we're in a non zero-sum game also argue against redistribution.


Even better, de-emphasize status. Status concerns are practically embedded in the "elite" professions (finance, law, consulting), but in technology people spend a lot less time worrying about that. And that's healthy.


Keith Johnstone (pioneered improv theater) makes a pretty convincing argument in his book Impro that status is the most important thing to humans (and that much of our interactions involve status). It's the invisible fabric of our life in society that we aren't supposed to talk about.

Also, plenty of psychological research has shown that status is usually valued more than money in one's job, where status encompasses things like "my boss tells me I'm doing a good job" (which means more coming from your boss or the VP than the intern) or "my team appreciates the work I do".


    > but in technology people spend
    > a lot less time worrying about
    > that
Ways in which people in technology chase after status:

- Big-name employer (Google, Facebook, etc)

- Inflated job titles (CxO or VP at a 2 person firm)

- Going into management when they don't enjoy it

- "Meritocracy"

- Arguing in architecture or planning meetings

- Using the latest and coolest technology

- Speaking at every opportunity at events

It's possible to do all and any of those -- and to any degree -- without status seeking. But many people do those for the status.

EDIT: Personally I spent a fair amount of time and money on a mid-career Ivy League MSc I didn't need, almost entirely for the signalling effect.


Technology is considered an "elite" job in this market, and not just because it pays well. It's also kind of ridiculous to claim that technology professionals are are less status seeking than the other professions you've listed. Satire like Silicon Valley exists because that behavior is rampant in our industry.


Rampant, but (hopefully) not normal. There are at least some tech companies where that kind of behavior isn't rampant.


> but in technology people spend a lot less time worrying about that

That has not been my experience. I'd say people in technology are just as political and status obsessed as anyone else. I think people in general don't want equality as much as they want dominance. They want to have it better than the other guy and high status helps achieve that.


Technology is an "elite profession", if you want to look at it that way. It's the nouveau riche to finance and law's old money.

You're not wrong that many in tech don't worry about status or power or politics, whatever you choose to call the great messy interplay of self-interested humans nominally assembled toward a common goal. Those who don't are vulnerable to exploitation by those who do, and frequently find themselves hosed in extremely consequential ways as a result. Is that healthy?


I'm sorry to call you out on this, but when I click on the link for your username, I see lots of info you've listed to communicate your status as a successful and accomplished member of the tech community. Presumably that info is there because you think it is relevant and of interest to the technology people here on HN.

Oh, and yes, if you or someone else clicks on both our links you'll see that you have far more karma here than I do, suggesting that perhaps your opinion on these matters should be valued over mine, and/or that you can both dish out and weather down-votes more than I can, both because of your higher status here.

[edit: slight grammar tweak for clarity]


That crosses into personal attack and is not allowed. Your account doesn't seem to have a history of doing this on HN, so I'm going to put it down to the weird sort of pothole in the road that occasionally leads to a near-collision. But please don't do it again. paulsutter has been a great HN contributor for years and did not deserve this.

We detached this subthread from https://news.ycombinator.com/item?id=13799970 and marked it off-topic.


Ok then, I just deleted my bio, if that helps.

As for HN points, that just indicates procrastination (spending too much time on HN).


Well, now you are trying to increase your status as someone who doesn't care about status. The fact that you felt it worthwhile to delete your bio, just to prove to some random internet stranger that you don't care about status, clearly shows that you care.

It is ok to care about how others perceive you. We are social creatures, and we care about what others think. That isn't a bad thing.


I assure you I'm a nerd with no social standing whatsoever, and I'm almost flattered to be considered otherwise here in this thread.

And yes we're social creatures, and we all want to be understood and appreciated. But that's quite a different thing from pursuing social status.


I don't think it IS different.... being 'understood and appreciated' is exactly what social status is.


No, social status is a zero sum /ranking/ of individuals and inherently competitive.

https://en.wikipedia.org/wiki/Social_status


> Ok then, I just deleted my bio, if that helps.

Oh no! please put it back. The value to other HN users far exceeds the cost of a weird personal snipe, uncalled-for though it was.


Do you really think he's trying to sell himself as elite or just mention his past job roles? Sometimes that context can be useful, especially if you want to email him (which he includes).

I realize the point you're trying to make. I'm just not sure it's applicable here.


That's the point: it's incorrect to dismiss status seeking as something only aspiring elites do. There's status in every group.


I understand that people can seek status in every group. But that doesn't mean that talking about your career, in a status section that very few people bother to check, is the same as gloating.

If OP prefaced every comment with "by the way, I was the founder of such-and-such which was acquired" and then went on to discuss something completely different, THAT would be status seeking. Instead, it was a very short, objective summary of his career in perhaps a dozen words.

My point is simple: not everybody is status seeking all the time. Sometimes people are just trying to communicate with no ulterior motive.


Not knowing who the author was, I read this thinking it must've been written by a teenager taking his first stabs at intellectual discussion of socioeconomics. Turns out he's Trump's ambassador to Israel. I can't decide which is less credible.

We all value status.

It's easy to miss how bad this generalization is since this piece is entirely generalization. It reveals the assumption underpinning Friedman's argument — that status is important to everyone. He seems to think that those who don't value traditional signifiers of status must find other ways to scratch that itch.

I understand this is a short blog piece but you can't credibly talk about status in a societal sense without also acknowledging the ways in which each society tends to limit the rights of those at the very bottom of its status hierarchy. Status is not just self-perception, it has a very tangible, external impact on someone's well-being in a society.

The biggest problem with this piece is that it doesn't acknowledge the very real possibility that status simply matters less to some people than others. The best people I know are the ones who devote the least amount of energy to comparing themselves to everyone around them. Personally I believe that striving for a level of detachment from competitive self-evaluation is a lot more important than achieving any of the forms of status Friedman seems to care about.

Maybe instead of moving towards Friedman's capitalist utopia where everyone can be high-status we should instead strive for a place where status just matters less to everyone.


> Turns out he's Trump's ambassador to Israel.

Author of the linked blog.

https://en.wikipedia.org/wiki/David_D._Friedman

David Director Friedman (born February 12, 1945) is an American economist, physicist, legal scholar, and libertarian theorist. He is known for his textbook writings on microeconomics and the libertarian theory of anarcho-capitalism, which is the subject of his most popular book, The Machinery of Freedom.[2] Besides The Machinery of Freedom, he has authored several other books and articles, including Price Theory: An Intermediate Text (1986), Law's Order: What Economics Has to Do with Law and Why It Matters (2000), Hidden Order: The Economics of Everyday Life (1996), and Future Imperfect (2008).[3]

Trump's ambassador to Israel

https://en.wikipedia.org/wiki/David_M._Friedman

David Melech Friedman is an American bankruptcy lawyer.




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