Money and Status: It Really Is Up to You

Ezra likes to caricature my claim about the multidimensional, opt-in/opt-out nature of status races as “the idea that otherwise pathetic people can be really respected in Everquest.” This is, of course, true. And it is also true that you can choose your career, choose where you will live, choose whether to marry, choose whether to have children, choose what causes to join, what stores to shop at, choose what to buy in them, etc., etc. with straightforward implications on your experience of status. As far as I can tell, however, Ezra thinks all this is doubtful, which is completely mystifying, since I think it's pretty obvious. Ezra:

[Liberal arts degreees, obscure Russian poets and vanity bands are] also for very young people. Braxton's life is essentially defined by an absence of responsibilities, dangers, or economic ties. He's young and healthy, single (but hanging out with an awesome girl!), doesn't own a home, doesn't appear to have college debt, etc. Income doesn't define his status because, at the moment, he doesn't much need income. This will change. Quickly. And then income will define his status — and not just in an envious manner. Income will define whether his kid gets to go to a good school, and whether his family is safe from medical emergencies, and whether his clothing makes him look suitable for promotion. The ability to seek fulfillment in other realms will not vanish as he ages, but his capacity to eschew material concerns and forsake financial security will.

The imaginary Braxton, like Ezra and me (despite being so old), is in a major life stage sociologist Michael Rosenfeld calls “the age of independence,” as detailed in this interesting Kieran Healy post. Whether he is going to need a lot of income soon depends on the choices he makes. He could go on just like that for a long time, if he wants, like I have. If it is in the end “just a phase” (and what isnt?), it is by no means a trivial phase. If the denizens of wealthy liberal democracies now spend longer portions of life free to explore their interests without the necessity of earning high incomes, that seems like a kind of triumph.  
Morevover, if Braxton partners and chooses to have children, requiring extra income, it is completely open to him (and completely normal) to see that income as an instrument to raising his children, not as a signifier of status. And income has almost nothing to do with whether his kid gets to go to a good school. Where he chooses to live does. This might require some hard tradeoffs. Good public schools might not be available in the Boston neighborhoods Braxton can afford, where his friends are. But they are available in Omaha in neighborhoods he can afford. And it's probably a better music scene, too. If he decides to get a different kind of job so he can afford a place in a Boston neighborhood with good schools, we've got to keep in mind that there is no sense whatsoever in which unavoidable circumstances forced him into this. His preferences — for children, for Boston — did. We are not entitled to whatever we at the price we want wherever we want.
Millions upon millions of people in societies like ours spend their whole lives and raise families on modest artist, editor, teacher, or non-profit incomes because they prefer it over ready alternatives that provide larger incomes. Their status comes from being well-received and respected in their communities, whatever their communities may be. Being a beloved school teacher, a leader of a community theater, or the social pillar of a church are the kinds of sources of real status that most people do enjoy and emphasize in their lives. Everquest is good, too. Why demean the way people choose to live?
Ezra needs to put down the Robert Frank. Frank needs to establish that the rat race is something like an inevitability to get the conceptual machinery behind his policy proposals churning, but he can't, and so it doesn't. Narrowly materialist status pursuits just aren't an inevitability and it is so easy to show it that I really wonder what's going on psychologically and ideologically with people who keep trying to sell us on this. Give me a week and I'll find a hundred stories of people who have chosen a life in which income in not their main source (or even a source) of status. Give me a year and I'll find five thousand stories. What does it take? 
Also, Frank has never shown that his conclusions about tax policy even follow from his premises. As David Weisbach, director of the U of Chicago Law & Economics program, makes clear:

This [Frank's] simple intuition [about status] does not tell us anything about the likely effects of status on the tax rate schedule.  For example, increasing progressivity would move everyone closer together.  This might decrease status competition, because the gains from competition are smaller – it would be harder to separate yourself from the group.  On the other hand, it might increase status competition.  If you are closer to beating someone in a status race, you might try harder.  Thus, we can imagine status considerations leading to either a more progressive tax system or a less progressive tax system.

And, like Adam Smith and David Hume thought, in the right institutional and cultural context, the externalities of income-related status-seeking may be net positive, in which case a benevolent planner would subsidize it. So, the idea that people can't help but seek social status through income and consumption is pretty clearly false in the first place, is of indeterminate policy implication in the second place, and, in the third place, it's a pretty unattractively materialistic conception of human motivation for nice liberals (the leftwing homo economicus?).
I agree with Ezra that

To most people, money matters. A lot. Sometimes in absolute terms, sometimes in positional terms. Really good taste in vanity bands rarely pays the mortgage.

My point was precisely that money does matter. You need to live in a wealthy society to do the things Braxton does. Wealthy societies — societies in which uninternalized positive externalities run like milk and honey — are liberating. And in that kind of society, you can do these things without making a lot of money yourself.  The absolute amount of money you need, say, for a mortgage, depends on choices you make, mostly the choice of where to live. But the existence of a market in inexpensive secondhand electric guitars, lots of other people who play instruments, and a “scene” is not something you have to pay for yourself. And the importance of money as a positional matter depends on choices we make (especially if you consider the failure to break the hold of your accidental clique's expectations as a choice, which I do). My point was precisely that vanity bands may not pay the mortgage, but it doesn't matter, because you don't have to have a mortgage to have a vanity band, a satisfying level of social status, or happiness. It doesn't matter how old you are. Surely Ezra doesn't  really think we are all fated to pin our hopes of esteem on our paychecks. So what are we really talking about?