I don’t think preferences are infinitely malleable. But I do think they change, and I think part of the change is in response to what you’re good at. There was a study cited in a recent Scientific American that in Europe, children born shortly after the cutoff date for entrance to a soccer league are more likely to become professional soccer players as adults—they start soccer older relative to their competition, so do better and care more about soccer, leading to improvement. I know that I can’t quite get invested in activities that I’ve decided I’m just not going to be good at; that’s why, say, I keep studying piano, but it doesn’t bother me that lots of my friends are way better than I’ll ever be. On the other hand, as you eliminate dimensions of competition the few that remain become more important, and it’s less likely that I’ll find my niche that I care about and that makes me happy.

Now, I do think income is special. It’s special for two reasons. First, the fact that you need it to do lots of stuff. But this isn’t subject to the status effects so much. If you’re just worried about having the resources to pursue your goals, it doesn’t matter if other people have more or less.

But income is also important because so many people buy into it as an important status competition. I think this is partly cultural and partly a result of the absolute effects of income; but I would guess that the people really caught up in that game are a specific subset of the upper-middle and above classes, who have everything material they want and so have nothing else to fight over. I mean, if you have no material needs and no particular interests or hobbies, you gotta have something to go for; and a lot of people choose income as a default. But that is a choice, and often the result of exteremly shallow interests. As evidence that even much of the upper-middle class doesn’t buy into this game I offer college professors: most of them could have earned much more by going into law or industry, but choose academia because they don’t want to fight out the status race. I bet there are lots of other, similar choices that are just harder to point to.

Finally, I agree with you that more income is pretty much always better than less. But the side-effects you mention of wealth seem more a product of absolute wealth than relative wealth—if everyone had enough money that kids didn’t need to work and could devote themselves to whatever they wanted, the poorer kid can accomplish pretty much all of what the rich kid can. The problem is the lack of resources that some families have, forcing the children to spend more time working; the solution for this, as for child labor abroad, is raising everyone’s standard of living so kids aren’t caught in that trap.

I don’t think preferences are infinitely malleable. But I do think they change, and I think part of the change is in response to what you’re good at. There was a study cited in a recent Scientific American that in Europe, children born shortly after the cutoff date for entrance to a soccer league are more likely to become professional soccer players as adults—they start soccer older relative to their competition, so do better and care more about soccer, leading to improvement. I know that I can’t quite get invested in activities that I’ve decided I’m just not going to be good at; that’s why, say, I keep studying piano, but it doesn’t bother me that lots of my friends are way better than I’ll ever be. On the other hand, as you eliminate dimensions of competition the few that remain become more important, and it’s less likely that I’ll find my niche that I care about and that makes me happy.

Now, I do think income is special. It’s special for two reasons. First, the fact that you need it to do lots of stuff. But this isn’t subject to the status effects so much. If you’re just worried about having the resources to pursue your goals, it doesn’t matter if other people have more or less.

But income is also important because so many people buy into it as an important status competition. I think this is partly cultural and partly a result of the absolute effects of income; but I would guess that the people really caught up in that game are a specific subset of the upper-middle and above classes, who have everything material they want and so have nothing else to fight over. I mean, if you have no material needs and no particular interests or hobbies, you gotta have something to go for; and a lot of people choose income as a default. But that is a choice, and often the result of exteremly shallow interests. As evidence that even much of the upper-middle class doesn’t buy into this game I offer college professors: most of them could have earned much more by going into law or industry, but choose academia because they don’t want to fight out the status race. I bet there are lots of other, similar choices that are just harder to point to.

Finally, I agree with you that more income is pretty much always better than less. But the side-effects you mention of wealth seem more a product of absolute wealth than relative wealth—if everyone had enough money that kids didn’t need to work and could devote themselves to whatever they wanted, the poorer kid can accomplish pretty much all of what the rich kid can. The problem is the lack of resources that some families have, forcing the children to spend more time working; the solution for this, as for child labor abroad, is raising everyone’s standard of living so kids aren’t caught in that trap.

Admittedly, I find a lot of the arguments in the above posts fairly interesting and persuasive, but the result — that inequality is utterly irrelevant in itself — is hard for me to swallow. Worse, it’s hard for me to believe that it’s not something of a “feel good” smokescreen for (some) privileged people to hide behind. Let me see if I can explain and you all can tell me where I go wrong or what I’m missing:

So long as the subsistence needs (however defined) of all societal groups are met and all people are generally getting better off, it doesn’t matter that there is inequality. It doesn’t matter that circumstance will push certain people (and, almost inevitably, their kids and grandkids) towards status competitions like the race for Harvard Law Review or captain of the debate team, while others will have to content themselves with being the best crack salesman on the block, the funniest in their family, or one of the top three employees at the local McDOnald’s — there’s a place for everyone! We’re all winners on some dimensions and losers on others, and we shouldn’t concern ourselves with which competition(s) we end up pursuing. An “egalitarian triumph” indeed.

Is this really what you’re saying? Is the multiplicity of status dimensions alone enough to render marked income inequality completely unworthy of concern? How about the “side effects” of being in certain status competitions, such as the relationship between having money and one’s state of health (a variable that links highly with happiness)? There seems to be a lot of these side effects associated with income…

Personally, I feel lucky to have been a part of certain status competitions (law school, grad school) and I know that the financial situation of my parents played heavily into that possibility, both directly and indirectly. Further, I’m fairly certain that I’d have a hard time switching to something else like being the best ballroom dancer in my circle of friends — anecdotal evidence that we can’t just switch preferences willy nilly. Glen mentioned that he cares more about debate than he does about sports, which is convenient because he appears to be a good debater…but what if he went to a school without a debate team or had to work after school? Is it possible that certain circumstances might have limited his opportunity to exploit his skill to the fullest (and thus leave him less happy)? Or are your preferences infinitely malleable?

DED

Admittedly, I find a lot of the arguments in the above posts fairly interesting and persuasive, but the result — that inequality is utterly irrelevant in itself — is hard for me to swallow. Worse, it’s hard for me to believe that it’s not something of a “feel good” smokescreen for (some) privileged people to hide behind. Let me see if I can explain and you all can tell me where I go wrong or what I’m missing:

So long as the subsistence needs (however defined) of all societal groups are met and all people are generally getting better off, it doesn’t matter that there is inequality. It doesn’t matter that circumstance will push certain people (and, almost inevitably, their kids and grandkids) towards status competitions like the race for Harvard Law Review or captain of the debate team, while others will have to content themselves with being the best crack salesman on the block, the funniest in their family, or one of the top three employees at the local McDOnald’s — there’s a place for everyone! We’re all winners on some dimensions and losers on others, and we shouldn’t concern ourselves with which competition(s) we end up pursuing. An “egalitarian triumph” indeed.

Is this really what you’re saying? Is the multiplicity of status dimensions alone enough to render marked income inequality completely unworthy of concern? How about the “side effects” of being in certain status competitions, such as the relationship between having money and one’s state of health (a variable that links highly with happiness)? There seems to be a lot of these side effects associated with income…

Personally, I feel lucky to have been a part of certain status competitions (law school, grad school) and I know that the financial situation of my parents played heavily into that possibility, both directly and indirectly. Further, I’m fairly certain that I’d have a hard time switching to something else like being the best ballroom dancer in my circle of friends — anecdotal evidence that we can’t just switch preferences willy nilly. Glen mentioned that he cares more about debate than he does about sports, which is convenient because he appears to be a good debater…but what if he went to a school without a debate team or had to work after school? Is it possible that certain circumstances might have limited his opportunity to exploit his skill to the fullest (and thus leave him less happy)? Or are your preferences infinitely malleable?

DED

Second, even if you rule out individual control entirely, and say our preferences are fully culturally determined, Will’s point still stands: Western-style capitalist societies tend to generate a wider range of status competitions into which people will be sorted. That reduces the winner-take-all nature of the social process, because there can be many different ways to be a winner.

Third, you’re right that winning in the soccer status race isn’t as fungible as winning in the income status race. And none of us can do without income; even if you’re totally soccer-focused, you need money to buy food, send your kids to college, etc. But remember the context of the discussion: Liberals have been trying to argue that income inequality is undesirable. Will and many others have argued in response is that we shouldn’t care about inequality *per se* as long as people are generally getting better off, even at the bottom of the ladder — which is assuredly true. The liberals have responded by saying inequality is bad *as such*, because it makes the people at the bottom feel bad by comparison (the status competition argument). That’s where Will’s argument in the current post refutes that defense.

In short, there are only two reasons to care about inequality. The first is absolute deprivation — but that’s not problem in America, because absolute welfare has increased for just about everyone. The second is relative deprivation — but that position relies on the status model, which Will smacks down here.

Second, even if you rule out individual control entirely, and say our preferences are fully culturally determined, Will’s point still stands: Western-style capitalist societies tend to generate a wider range of status competitions into which people will be sorted. That reduces the winner-take-all nature of the social process, because there can be many different ways to be a winner.

Third, you’re right that winning in the soccer status race isn’t as fungible as winning in the income status race. And none of us can do without income; even if you’re totally soccer-focused, you need money to buy food, send your kids to college, etc. But remember the context of the discussion: Liberals have been trying to argue that income inequality is undesirable. Will and many others have argued in response is that we shouldn’t care about inequality *per se* as long as people are generally getting better off, even at the bottom of the ladder — which is assuredly true. The liberals have responded by saying inequality is bad *as such*, because it makes the people at the bottom feel bad by comparison (the status competition argument). That’s where Will’s argument in the current post refutes that defense.

In short, there are only two reasons to care about inequality. The first is absolute deprivation — but that’s not problem in America, because absolute welfare has increased for just about everyone. The second is relative deprivation — but that position relies on the status model, which Will smacks down here.

Wouldn’t that itself be an argument for conspicuous consumption by the rich? If people most resent their own peers, the rich are drawn to particularly expensive sorts of status-seeking, and those with less money can find equally attractive but cheaper status competitions to compete in, then conspicuous consumption reduces the intergenerational differences in wealth and would be a good thing.

Wouldn’t that itself be an argument for conspicuous consumption by the rich? If people most resent their own peers, the rich are drawn to particularly expensive sorts of status-seeking, and those with less money can find equally attractive but cheaper status competitions to compete in, then conspicuous consumption reduces the intergenerational differences in wealth and would be a good thing.

One of the chief concerns of people like Kahneman, who calls the positional quest for more income a “focusing illusion,” is obviously that people are spinning their wheels trying to win a game that is, in the aggregate, zero-sum. Sort of a collective action problem: as long as there are status rewards to working more people will want to climb up the ladder, but if we limit the marginal benefit associated with more work then we will erode the (individual) tendency to indulge this “focusing illusion.”

If I read you all correctly, this is not really a concern because people can just stop working so hard anytime they want, in favor of other (non-income generating) status competitions. Is there any concern, though, that certain politically important segments of society — certain races, socioeconomic groups, etc. — will tend to cluster around certain status competitions (to caricature: minorities who find themselves unable to compete academically find status in athletics)? In itself, the clustering of certain groups around particular status races shouldn’t bother people who believe, as I think you all do, that people will ultimately find their niche(s) and achieve positional superiority somewhere….But what about the intergenerational/distributional consequences of this clustering?

Income seems different, and more important, than many other status competitions. Prestige — such as that garnered from six-pack abs, a killer, award-winning pie or a “kickass blog” — is not fungible in the same way money is. While being a good soccer player might enhance, in many ways, the likelihood of your daughter being a good soccer player, you can’t pay for the college education of your offspring with the non-pecuniary rewards associated with that particular status race. Thus, the ability of people to compete in the “income race” is very important because it has implications for the opportunities of future generations. In other words, the range of possible status competitions that future generations can engage in is limited by the income distribution of the present generation.

Interested to hear any comments…

DED

One of the chief concerns of people like Kahneman, who calls the positional quest for more income a “focusing illusion,” is obviously that people are spinning their wheels trying to win a game that is, in the aggregate, zero-sum. Sort of a collective action problem: as long as there are status rewards to working more people will want to climb up the ladder, but if we limit the marginal benefit associated with more work then we will erode the (individual) tendency to indulge this “focusing illusion.”

If I read you all correctly, this is not really a concern because people can just stop working so hard anytime they want, in favor of other (non-income generating) status competitions. Is there any concern, though, that certain politically important segments of society — certain races, socioeconomic groups, etc. — will tend to cluster around certain status competitions (to caricature: minorities who find themselves unable to compete academically find status in athletics)? In itself, the clustering of certain groups around particular status races shouldn’t bother people who believe, as I think you all do, that people will ultimately find their niche(s) and achieve positional superiority somewhere….But what about the intergenerational/distributional consequences of this clustering?

Income seems different, and more important, than many other status competitions. Prestige — such as that garnered from six-pack abs, a killer, award-winning pie or a “kickass blog” — is not fungible in the same way money is. While being a good soccer player might enhance, in many ways, the likelihood of your daughter being a good soccer player, you can’t pay for the college education of your offspring with the non-pecuniary rewards associated with that particular status race. Thus, the ability of people to compete in the “income race” is very important because it has implications for the opportunities of future generations. In other words, the range of possible status competitions that future generations can engage in is limited by the income distribution of the present generation.

Interested to hear any comments…

DED

With regard to culture determining status, I think it does only partially. Among other things, we care about others’ opinions of us, but only some others. There are a lot of people whom I think are idiots, and I don’t care if they respect me or not. Further, they can respect me for different things. I don’t get status points from people for being buff or an amazing pianist, because I’m not. But I tend to get status points in the status games I care most about, so the others don’t bother me. My athlete/semi-bodybuilder friends can be much buffer, and my amazing pianist friends better at that, without being threatened by my superior math ability.

As a side note, none of the three things I placed at the top of my list are things that our culture really puts at a premium for status, though I suppose econ comes closest. So ballroom dance is near the top of my status pile, even though lots of people think it’s stupid.