8 ms·

The Economics of Status (2006)

72 points by csense 10y ago

Animats 10y ago
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".
paulsutter 10y ago
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.
- clouddrover 10y ago
  > 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.
- peteretep 10y ago
  > 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.
- dsacco 10y ago
  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.
  - bittercynic 10y ago
    Rampant, but (hopefully) not normal. There are at least some tech companies where that kind of behavior isn't rampant.
- chillacy 10y ago
  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".
  - deleted 10y ago
    [deleted]
  - deleted 10y ago
    [deleted]
- throwanem 10y ago
  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?
yodon 10y ago
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]
- MegaButts 10y ago
  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.
  - icebraining 10y ago
    That's the point: it's incorrect to dismiss status seeking as something only aspiring elites do. There's status in every group.
    - MegaButts 10y ago
      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.
- paulsutter 10y ago
  Ok then, I just deleted my bio, if that helps. As for HN points, that just indicates procrastination (spending too much time on HN).
deleted 10y ago
[deleted]
rland 10y ago
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.
- cortesoft 10y ago
  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.
- smallnamespace 10y ago
  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 https://en.wikipedia.org/wiki/Stotting
- mpweiher 10y ago
  "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 https://en.wikipedia.org/wiki/Paul_Watzlawick
tabeth 10y ago
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.
- cortesoft 10y ago
  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.
  - zeteo 10y ago
    Even if you replace one definition of status with many (seven billion?), each one of these new definitions is itself zero sum.
  - tabeth 10y ago
    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.
    - peteretep 10y ago
      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.
mempko 10y ago
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.
abvdasker 10y ago
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.
- barry-cotter 10y ago
  > Turns out he's Trump's ambassador to Israel. Author of the linked blog. https://en.wikipedia.org/wiki/David_D._Friedman 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 https://en.wikipedia.org/wiki/David_M._Friedman David Melech Friedman is an American bankruptcy lawyer.
joe_the_user 10y ago
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.
- lumberjack 10y ago
  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.
  - paulpauper 10y ago
    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.
    - icebraining 10y ago
      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.
popra 10y ago
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?
- omalleyt 10y ago
  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
  - popra 10y ago
    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.
AndrewKemendo 10y ago
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.
- marchenko 10y ago
  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.
  - AndrewKemendo 10y ago
    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.

72 points by csense 10y ago

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".

paulsutter 10y ago

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.

clouddrover 10y ago
> 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.
peteretep 10y ago
> 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.
dsacco 10y ago
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.
- bittercynic 10y ago
  Rampant, but (hopefully) not normal. There are at least some tech companies where that kind of behavior isn't rampant.
chillacy 10y ago
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".
- deleted 10y ago
  [deleted]
- deleted 10y ago
  [deleted]
throwanem 10y ago
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?

yodon 10y ago

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]

MegaButts 10y ago
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.
- icebraining 10y ago
  That's the point: it's incorrect to dismiss status seeking as something only aspiring elites do. There's status in every group.
  - MegaButts 10y ago
    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.
paulsutter 10y ago
Ok then, I just deleted my bio, if that helps. As for HN points, that just indicates procrastination (spending too much time on HN).

deleted 10y ago

[deleted]

rland 10y ago

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.

cortesoft 10y ago
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.
smallnamespace 10y ago
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 https://en.wikipedia.org/wiki/Stotting
mpweiher 10y ago
"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 https://en.wikipedia.org/wiki/Paul_Watzlawick

tabeth 10y ago

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.

cortesoft 10y ago
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.
- zeteo 10y ago
  Even if you replace one definition of status with many (seven billion?), each one of these new definitions is itself zero sum.
- tabeth 10y ago
  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.
  - peteretep 10y ago
    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.

mempko 10y ago

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.

abvdasker 10y ago

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.

barry-cotter 10y ago
> Turns out he's Trump's ambassador to Israel. Author of the linked blog. https://en.wikipedia.org/wiki/David_D._Friedman 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 https://en.wikipedia.org/wiki/David_M._Friedman David Melech Friedman is an American bankruptcy lawyer.

joe_the_user 10y ago

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.

lumberjack 10y ago
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.
- paulpauper 10y ago
  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.
  - icebraining 10y ago
    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.

popra 10y ago

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?

omalleyt 10y ago
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
- popra 10y ago
  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.

AndrewKemendo 10y ago

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.

marchenko 10y ago
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.
- AndrewKemendo 10y ago
  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.