Topic: Political Philosophy

The Great Chain of Status?

Last week Henry Farrell over at Crooked Timber objected to the key point of my recent article in Policy (related Cato podcast here), which is that status-seeking need not be a zero-sum game, because there are indefinite dimensions of status competition. (And therefore, the government need do nothing to mitigate the alleged harm of status competition.) It is true that there can only be one winner of every race, but there is no cap on the number or kind of races. The greater the number and variety of races, the more likely it is that everybody will be able to find one in which they can win, place, or at least show. Henry replies:

Wilkinson’s claim implies, unless I misunderstand him badly, that it doesn’t matter very much to me if I’m a despised cubicle rat who can’t afford a nice car and gets sneered at by pretty girls, because when I go home and turn on my PC, I suddenly become a level 75 Night Elf Rogue who Kicks Serious Ass! Now this example is loaded – but it’s loaded to demonstrate a serious sociological point that Wilkinson doesn’t even begin to address. These indefinitely proliferating dimensions of status competition are connected to each other in their own implicit meta-ranking, which is quite well understood by all involved. Being a world-class scrabble-player isn’t likely to win you much respect among people who aren’t themselves competitive scrabble-players; the best you can expect is that someone will write a book that pokes fun at your gastro-intestinal problems . It’s a very different matter if you’re a world class soccer player; you’re liable to be invited to all sorts of fun parties, hit upon by beautiful people, stalked by the paparazzi and the whole shebang. Being a world class blogger is somewhere between the two, albeit certainly much closer to the scrabble-player than the soccer star. Even if you’re king of your own mountain, you’re likely to be quite well aware of the other mountains around you that make yours look in comparison like a low-grade class of a gently sloping foothill, or perhaps even a slightly upraised knob in the middle of a steep declination. You’re similarly aware of those less well-advantaged foothills or knoblets whose owners you can look down upon…. In short, people are highly aware of the relative rankings of their obsessions.

I am unmoved.

I anticipated this objection in a very long blog post back in January. Henry’s argument turns on the claim that “These indefinitely proliferating dimensions of status competition are connected to each other in their own implicit meta-ranking, which is quite well understood by all involved.” I think Henry is wrong that there is shared understanding of the meta-ranking and one’s place in it, and I think he is confusing status, in the sense I was writing about, with fame.

I was talking about status as it is experienced. Higher status correlates with higher concentrations of serotonin, for example, not necessarily because of some objective feature of the world, but because of the subject’s perception (correct or not) of her place in a status hierarchy. Our perception of our place in a status hierarchy is generally constructed from all sort of signals–deference, praise, attention, inattention, mocking–we receive from people in the relevant social group. Henry’s story doesn’t strike me as having anything to do with meta-rankings, but just to do with the fact that at any time there are a number of different status dimensions we care about. If you are, as Henry says, “despised” and “sneered at,” then that may hurt, if you care your status within your office, or with certain pretty girls. But part of my point was that people can and do often arrange their lives to avoid that sort of thing. If they are able to manage it, then the fact that they would be despised and sneered at in other circumstances makes no difference to their status as they experience it.

Here is an example of how I think Henry confuses experienced status and fame. If I am the quarterback of the champion high-school football team in a football-crazy Texas town, my subjective status-meter is likely pegged to the top of the scale. That Peyton Manning is more famous than me, is a better quarterback, makes millions more dollars, and is more likely to impress a random person at a bar, is simply irrelevant. It’s no skin off my back. If I was ever in a room with Peyton Manning, my subjective assessment of my relative standing would no doubt go down. But I’m never in a room with Peyton Manning. In my small pond, I’m a big fish – and I feel like it.

The seminal paper on positional externalities is Robert Frank’s “The Frame of Reference as a Public Good.” I suspect Henry wants to maintain the idea there is a single culture-wide frame of reference against which to evaluate not only our relative position on some dimension of status, but also against which to evaluate the relative position of status dimensions. I think this is exceedingly implausible.

If Henry really thinks there is a widely understood meta-ranking, then he ought to be able to say who is higher-status: Peyton Manning or Chief Justice John Roberts? I happen to think that’s a nonsense question, since there is in fact no common frame of reference against which to compare the status of superstar NFL quarterbacks with superstar judges. Henry is a social democrat political science professor blogger. I’m a libertarian policy wonk blogger. Whose status dimension is higher in the meta-ranking? Obviously, it depends on who you ask. If Henry hangs out with people who confer high status on Henry, and I hang out with people who confer high status on me, then we both experience a sense of high status, and Henry’s doesn’t detract from mine, and vice versa. But suppose, for the sake of argument, that Henry’s dimension is slightly higher in the mysterious zeitgest meta-ranking than mine, but that I rank closer to the top of my dimension. Who’s higher status then? Is the worst player in the NFL higher status than the world’s best Scrabble player? Again: the question is nonsense. There is no common frame of reference.

I’m fully on board with Julian Sanchez’s observation:

I think everyday experience confirms that it’s also emphatically not the case that there is any Great Chain of Being among subcultures. My high school, for instance, was fairly sharply divided into pretty clear cliques with porous but recognizable boundaries. But, contra the 1950s teen movie stereotype, there wasn’t any single ordering of cliques that all of them recognized. Probably the jocks and their hangers on thought it was still 1953, and that they were at the top of the pecking order—the cool kids. But the hippies, the skaters, the computer nerds, the drama kids—they all thought the same thing, ultimately. Just as every faith is the One True Faith to its adherents, every clique is coolest to its members.

The idea that competition for relative position is a zero-sum game that necessarily creates a loser for every winner is the last redoubt of statist egalitarians. The cultural pliability of status, and the fact of our freedom (and responsibility) to opt in and out of status games and to reinterpret the frame of reference against which we judge our lives truly guts the argument. People too often get sucked unwittingly into shiny, culturally salient status races in which we end up suffering, and we too seldom recognize we have the freedom to reevaluate our priorities, and to opt into competing conceptions of a good life better suited to our satisfaction. This is not easy. Once inside a frame of reference for evaluating status, it can be extremely difficult to switch. But it is possible, and it’s much easier if you believe it.

Racing toward Socialism

When Washington Post racing columnist Andrew Beyer says “democracy,” he means “communist country”:

At a time when the populations of Arab countries are seething with resentment against their own leaders, the rulers of Dubai don’t hesitate to engage in self-indulgence on a gargantuan scale. They are unembarrassed that this money is derived from the natural resources of their country – resources that, in a democracy, would belong to the nation.

He’s writing about the use of oil wealth to build a powerful and expensive stable of racehorses. He’s right that in a free society, all that oil wealth wouldn’t belong to a small group of hereditary rulers. But countries that declare that their natural resources “belong to the nation” end up poor countries.

Carrying Liberalization Further

I’m in Tbilisi for our conference on “Freedom, Commerce, and Peace: A Regional Agenda.”  It starts tomorrow evening, but many of the participants are arriving tonight (Tbilisi is a great place, but not the easiest to reach, especially after the Russian government banned all travel between the Russian Federation and Georgia).  What was originally planned for 100 participants has grown to at least 180 (and maybe more).  It’s great to talk to libertarians from so many countries (28 in all) and to feel the excitement for the advancement of freedom.

The keynote speaker tomorrow night will be Nobel Laureate Vernon Smith, who will speak on a topic that has gained greater significance since the Russian blockade on trade and travel with Georgia: “Globalization and Liberty.”  The speakers were chosen for their ability to inspire, as well as for their practical knowledge.  The other banquet speakers will be Georgian Prime Minister Zurab Nogaideli and former Estonian Prime Minister Mart Laar (winner of the Cato Institute’s 2006 Milton Friedman Prize for Advancing Liberty).  I’ll be posting occasionally from the conference.

Christian Toleration

I’ve just seen an interesting new book, The Choice Principle: The Biblical Case for Legal Toleration, by Andy G. Olree, who is a graduate of the University of Chicago Law School, where he studied under Richard Epstein and Michael McConnell, and now teaches law at Faulkner University’s Jones School of Law. The book presents an evangelical Christian argument for a legal framework that tolerates most “sinful” choices by individuals.

Olree writes, “The Choice Principle posits that Christians are called to influence law and government in ways that maximize opportunities for human freedom of choice–that is, for individual autonomy.” And he applies that principle in ways that might surprise critics of the religious right, to issues ranging from prostitution and homosexuality to Social Security.

He criticizes Roy Moore, Jerry Falwell, Pat Robertson, and James Dobson as “fearmongers” who “simplistically reduce complex societal problems to…the age-old struggle of good versus evil.” But he also takes on more academically serious defenses of enforced morality, devoting an entire chapter to a critique of Princeton professor Robert George’s book Making Men Moral.

Christians and libertarians could learn a lot about each other from reading this book. Or to be more careful with my language: Christian libertarians will find this book an effective presentation of a principle they likely agree with. Non-Christian libertarians and non-libertarian evangelical Christians will find it a provocative challenge.

Dueling Censorships

ANKARA: The Turkish court system acquitted a Turkish author (who lives and teaches in America) of the crime of  “denigrating Turkish national identity,” a charge supported by some remarks about mass murder of Armenians.  The remarks were made by a fictional character in one of her novels.  The acquittal was hailed in Europe as a victory for free speech.

PARIS: The French parliament has passed a bill imposing criminal penalties of up to one year in jail and 45,000 euros on anyone who denies that genocide against the Armenians took place.

The most intelligent thing anyone had to say was uttered by Turkey’s chief negotiator in EU membership talks, Ali Babacan, who suggested, “Leave history to historians.”

In one country it is a crime to affirm a statement.  In another it is a crime to deny it.  In both it is a crime to discuss it, because to discuss it one has to entertain the possibility that either the affirmation or the denial might be true.

Legislators need regularly to be reminded of John Milton’s dictum from his defense of a free press, Areopagitica; a Speech for the liberty of unlicensed Printing, to the Parliament of England, published in 1664:

[H]ere the great art lies, to discern in what the law is to bid restraint and punishment, and in what things persuasion only is to work.

The Fog Is Getting Thicker…

Over at Cato Unbound, Harold Meyerson argues that as employer-provided health benefits erode,

[c]ompanies that persist in offering such benefits are placed at a disadvantage when their competitors don’t. And consumers clearly can’t afford those benefits, either. As some recent surveys have made clear, precious few Americans can afford to buy medical insurance on their own or to utilize the Health Savings Accounts that the president is peddling.

Taking Meyerson’s points in reverse order:

  1. His comment that HSAs are unaffordable makes no sense.  Does he mean premiums?  HSAs are required to be coupled with high-deductible insurance, which has lower premiums than other types of insurance.  So the insurance component of HSAs is more affordable than … well, anything else.  Does he mean out-of-pocket expenses?  Sherry Glied and Dahlia Remler report that “the group responsible for half of all medical spending would see no change or a decline in cost sharing at the margin and on average” with HSAs.  That is, the people who need the most medical care would have less financial exposure with HSAs.  Soooo, Meyerson should like HSAs, right?
  2. Meyerson plays blame-the-victim with the individual health insurance market.  Meyerson writes that “precious few Americans can afford to buy medical insurance on their own,” as opposed to having their employer purchase coverage for them.  Let’s set aside that workers pay for the cost of those benefits through reduced wages.  The feds and state officials have wrecked the individual market by (A) diverting consumers to employer-sponsored insurance and Medicaid, and (B) driving customers out with costly regulations.  If Meyerson and I set up fruit stands on opposite sides of the street, and the government whacks people with a 2x4 whenever they tried to cross to Meyerson’s side, would he attribute his lack of business to, say, market failure?
  3. Meyerson fails to consider that the market may be sending him a message.  He complains that consumers cannot afford to purchase for themselves the benefits that employers had been purchasing for them.  Again setting aside that workers were paying for those benefits all along, might that mean that traditional employer-provided health benefits were unsustainable?  Perhaps that they were contributing to rising health care prices & premiums?

Nobel Winner Phelps on Dynamism, Enterpreneurship, and Justice

This year’s newly minted Nobel Prize winner in economics, Columbia University’s Edmund Phelps, has a wonderful essay on the difference between the American economic model and the various forms of European social democracy in today’s Wall Street Journal.

Phelps says the difference is the exceptional “dynamism” of the American free enterprise system:

[T]he free enterprise system is structured in such a way that it facilitates and stimulates dynamism while the Continental system impedes and discourages it.

Drawing on Hayek and Polanyi’s ideas about “personal knowledge” and entrepreneurship, Phelps explains how greater dynamism encourages a greater degree of innovation. Under capitalism, Phelps writes,

the financier and the entrepreneur do not need the approval of the state or of social partners. Nor are they accountable later on to such social bodies if the project goes badly, not even to the financier’s investors. So projects can be undertaken that would be too opaque and uncertain for the state or social partners to endorse.

Consequently, the U.S. has a remarkable record of innovation that much of the rest of the world, including the European social democracies, relies upon to maintain their own standards of living. This is a crucial point to hammer home when American statist liberals point to what they see as the success of the Western European institutions: the viability of European social democracy depends in part on the ability to, as Phelps puts it, “sail in the slipstream” of American innovation.

But the most fascinating part of Phelps’ essay is his attempt to justify capitalism in terms of John Rawls’ political philosophy. As one of a handful of classical liberals who think that Rawls identified something close to the correct method of political justification, I found Phelps’ appeal to Rawls darn interesting, even if he does slightly misinterpret him.

Like Rawls and Amartya Sen, Phelps denies that material resources alone are sufficient for well-being, and, again like Rawls and Sen, he leans heavily on the importance of self-realization through the exercise of our intellectual and creative capacities. Phelps notes that a higher degree of economic volatility is a pretty straightfoward consequence of a dynamic system in which enterpreneurs are free to shake things up without having to get buy-in from the state and all the veto-happy “stakeholders.” But if dynamism buys us higher productivity and higher incomes across the distribution, volatility will turn out to be a far cry from economic insecurity or precariousness. (Jacob Hacker, listen up.) And, Phelps thinks, more importantly, once we’ve passed a threshold of economic sufficiency, the concern for more profound matters such as self-realization becomes paramount. Capitalist dynamism offers greater opportunities for self-realization through challenge and the engagement of our higher capacities. And this is so not only for the enterpreneurs who are shaking things up, but for workers inside firms who are faced with the constant, stimulating challenge of creatively adjusting when things get shaken.

Instituting a high level of dynamism, so that the economy is fired by the new ideas of entrepreneurs, serves to transform the workplace–in the firms developing an innovation and also in the firms dealing with the innovations. The challenges that arise in developing a new idea and in gaining its acceptance in the marketplace provide the workforce with high levels of mental stimulation, problem-solving, employee-engagement and, thus, personal growth.

Now, Rawls’s standard for a just set of institutions is that it be the best feasible alternative in terms of the welfare of the “least advantaged.” In Rawls’s philosophy, advantage is understood in terms of “primary goods,” the necessary basic means to any meaningful and fulfilling human life. In addition to material goods, Rawls adds our moral rights, the availability of opportunites, and “the social bases of self-respect.” In justifying his theory, Rawls leans heavily on the the importance of “the Aristotelian Principle” that other things equal, we are better off if we engage our distinctively human capacities at a higher level. So it is not technically true that, as Phelps writes:

In the classic case to which Rawls devoted his attention, the lowest score is always that of workers with the lowest wage, whom he called the “least advantaged”…

The lowest score is always that of those who have the least primary goods, whatever those might be. But Phelps is right that most discussion of Rawls proceeds as if was talking about the distribution of money. So it turns out that Phelps’ self-realization-based argument for dynamically entrepreneurial capitalism is truer to Rawls than Phelps seems to think.

In an economy in which entrepreneurs are forbidden to pursue their self-realization, they have the bottom scores in self-realization–no matter if they take paying jobs instead–and that counts whether or not they were born the “least advantaged.” So even if their activities did come at the expense of the lowest-paid workers, Rawlsian justice in this extended sense requires that entrepreneurs be accorded enough opportunity to raise their self-realization score up to the level of the lowest-paid workers–and higher, of course, if workers are not damaged by support for entrepreneurship. In this case, too, then, the introduction of entrepreneurial dynamism serves to raise Rawls’s bottom scores.

If Ayn Rand and John Rawls had a love child, isn’t this what he’d say?