Posts from Robin Hanson and William Easterly got me thinking about rankings, zero-sum status games, and critiques of markets. Too often, criticism proceeds as if there is an obvious, easy to obtain, and unambiguously superior alternative out there just waiting for us to see it. Consider one of the standard critiques of commercial society: it makes us acquisitive, mean, and self-absorbed. Further, it encourages us to engage in a lot of wasteful status-seeking as we try to stay ahead of the Joneses.
Economist Robert Frank has offered this as a justification for higher marginal taxes at higher incomes, and social theorist Barry Schwartz has pointed to “the paradox of choice” as an example of how markets make us worse off. Criticisms of this new paternalism abound, from Steven Landsburg’s review of Robert Frank’s Luxury Fever to Glen Whitman’s critique of the new paternalism to a wide variety of things in between.
In a trio of papers about how Walmart affects communities, Charles Courtemanche, Jeremy Meiners, and I show that increased Walmart penetration doesn’t appear to affect various non-financial measures of the quality of life. But what is the alternative? Non-market signals are stubbornly opaque, and I think there’s a good argument to be made that reorganizing commercial society along the lines of non-commercial society would make these problems worse. Even if we lay aside for a second the fact that the absence of private property, exchange, prices, profits, and losses would leave us with no reliable guides to action, I think there’s a case to be made that the problems of wasteful status-seeking would get worse, not better. Imagine what would happen if the entire world were organized like academia. Status is the coin of the realm in the ivory tower, and it’s measured (crudely) by the length of the scholar’s curriculum vita. My sense is that academics spend an inordinate amount of time grousing about what others have that they want (here’s Arnold Kling with more).
