21.1. Status inflation and deflation: Prestige, the essence of status, permits broad alliances

Is status a positional good?

As the concept of social status itself attains higher status (through employment in evolutionary psychology), class struggles over the material conditions of life are recognized as impregnated with status aspirations. The conclusion may be drawn or implied that these conflicts are inherently wasteful: we’d be better off if people accepted their lot, because status is a positional good—a zero-sum game—what is won by some is lost by others. (See, for example, Robin Hanson’s Inequality talk is about grabbing.) But it also seems that a society beset with severe status inequality will suffer status deflation.

One approach to the question of whether status is a positional good is whether status is (implicitly) measured using an ordinal scale of measurement or a higher scale, interval or ratio, where ordinal scales express only rank, whereas interval and ratio scales express degrees of difference. An example of an ordinal scale expressing social status is military rank. The status of the rank of major depends on the mass of soldiers a major outranks and the number who outrank the major, so, if half of the captains are promoted to major, the major’s status declines.

Social status can seem similar to military rank, but (I contend) this is a confusion: the social status of an entire population can rise or fall (inflate or deflate), because the main component of social status is prestige, which has ratio properties. The confusion results from conflating prestige with dominance, more primitive and prototypical, but prestige is a ratio scale, not an ordinal scale like dominance, because it results from summing over weighted dominance relations. Consider our major in contrast to a lieutenant under his command. The lieutenant may have received higher grades in the military academy, he may come from a wealthier family, and he may be the president of a nonmilitary club in which the major participates as an ordinary member. Which has more prestige? The point is that the question makes sense; we combine information about position in various separate dominance hierarchies with other information about their potential power to determine their prestige, the information’s additivity implying that prestige is at least an interval scale (probably a ratio scale), not a mere ordinal scale like dominance. Concern with prestige (as distinct from dominance) is a human-specific trait, with few roots other than dominance in our primate psychology.

Why prestige?

Evolutionary psychologists propose that prestige (usually referred to simply as status, a convention I will abide) reflects a person’s value as an ally: a high-status person is a powerful ally. (The person with the highest prestige is God, the most powerful ally.) Other primates appear to have only dominance, which suffices for simian calculations because apes, living in a single hierarchy, don’t need to sum over different hierarchies. Humans live embedded in multiple social hierarchies—at root, dominance relations—which must be weighted and added to appraise an individual’s value in alliances.

If primordial alliances were exclusively alliances pitted against other allied humans, prestige could still be a zero-sum game despite its ratio scaling. But the alliances formed primordially weren’t exclusively competitive alliances: alliances were presumably formed for foraging and child care. Ratio-scaled prestige, a currency spanning dominance hierarchies, allows more and broader alliances.

Two distinct explanatory tasks regarding prestige concern its evolutionary function and its individual motivation. Evolutionary psychologists hypothesize that status derives from the differential value of persons as allies. The quest for prestige aligns the individual’s efforts with adaptation: by pursuing prestige, one becomes a more powerful ally, deriving the corresponding social (and reproductive) advantages. But the mechanism is more complex and itself provides additional clues about function. Prestige is a reaction formation against envy. This agrees with the observation that we accord prestige to those we would otherwise envy. (See Theodor Reik, Love and Lust: On the Psychoanalysis of Romantic and Sexual Emotion regarding the idealization process—rooted in unconscious envy—in romantic love. “Reaction formation” is a psychodynamic mechanism involving experiencing the opposite of certain thoughts, to deny them conscious access.)

Since status is commonly perceived value as ally, status deflation means decreased willingness to rely on—to ally with—others. In 11.3, I discussed opinionation as a pathology of belief-opinion confusion: we are opinionated when we fail to rely sufficiently on the opinions of experts. Status deflation causes irrational opinionation (as well as other adverse societal effects, including some relating to macroeconomics). The modern expression of the tendency toward excessively narrow alliances is lack of regard for the opinions of most others, including experts. At the same time, (one's own) status deflation increases the experienced envy. In societies where status is most deflated (typically, traditional agrarian societies), this two-pronged attack on the sublimation of envy results in the bullheadedness of the peasant.

Countering status deflation and generating inflation.

Economic inequality is a manifestation of status deflation as well as one of its causes (as I maintained in 21.0.) In modern capitalist societies, the main ways of reducing inequality have been restricted immigration (to reduce the supply of labor and increase its price) and progressive taxation. But these policies have been applied sporadically and are only practiced weakly in most advanced countries. Within Europe, the Common Market has opened borders, and in the United States, wealth inequality is so high it rivals some third-world countries. The reason stringent immigration control and progressive taxation are only sporadically applied is that these methods don’t correspond to any humanly valued relational model—which as Alan P. Fiske (Structures of Social Life (1991)) shows, enable the moralization of social practices and, as John Bolender elaborates (The Self-Organizing Social Mind (2010)), correspond to the four scales of measurement. (Communal/Sharing is nominal, Authority/Ranking is ordinal, Equality/Matching is interval, and Market/Pricing is ratio.) A flat tax employs a ratio scale, a fact that helps account for its ideological popularity despite its practical infirmity. To human intuition, progressive tax rates are arbitrary. As to immigration control, absolute restriction would correspond to Communal/Sharing, but like the flat tax rate, mere reduction of immigration rates doesn’t form an intuitively compelling public policy. (This is not to disparage the instrumental use of either immigration control or progressive taxation.)

State socialism, on the other hand, can be grounded in intuitive metrics: equality matching (interval scale) embedded in communal sharing (nominal scale). It has proven not only to provide a greater degree of status equality (thus status inflation) but also to be more durable.

21.0. The dismal employment picture: A social-status-theory explanation

Most economists agree automation costs jobs, but the reason it does is unclear. Economists had theorized that automation would create more jobs than it eliminates. This essay sketches a novel theory explaining why, today, automation costs jobs, whereas introducing machinery into production once created jobs and continues to create them in some economically backward countries, particularly China. I’m not an expert on the subject, and I confine myself to basing my theory on a few facts and principles of economics that are widely accepted, to which I apply the nascent social-status theories from evolutionary psychology. (Economist Robin Hanson’s blog, Overcoming Bias, which has influenced my thinking regarding social status, contains numerous novel applications of social-status theory.) This explanation is independent of my previous theorizing that the tendency of rate of profit to decline is a source of economic decline. The point of this essay is to propose that social-status theory is relevant to macroeconomics.

Aggregate demand and the industrial revolution

The concept taken from economics is aggregate demand. Rising aggregate demand allows the economy to grow in the long-term, furnishing the reason economists had believed automation would create jobs. By creating wealth more efficiently, automation permits the employment of more workers, whose increased buying power supports their employment.

This logic can collapse if workers doing the new jobs are paid less than the workers replaced in the labor force. Profits will then rise, and while profits contribute to aggregate demand, they do so less than wages because the profit-takers are wealthier than workers and spend less of the increase than workers would spend. Investments in machinery increase aggregate demand, but the profitability of these investments depends on unreliable technological opportunities. Every modern society that has been economically expansive long-term has raised the standard of living of the masses of people.

The fundamental reason the industrial revolution allowed vast expansion of the economy is that expansion of the labor force occurred primarily by turning peasants and farm workers into manufacturing workers. Workers were paid low wages and worked as much as 14 hours a day before they organized into unions, but still, at least in long historical perspective, their income was better than that of the peasants they had replaced. Even today, agricultural workers throughout the world get much lower wages than do manufacturing or personal-service-sector workers. The creation of an urban working class meant an expanding economy with expanding employment. The process is observed today in fast-motion in China, where an expanding economy is powered by converting very poor peasants into better-off workers, creating rising aggregate demand. This isn’t the only tendency in the early and middle industrial revolution. In a countervailing tendency, much emphasized in the popular imagination, skilled workers are replaced by unskilled workers. The first tendency is stronger.

During the past hundred years, another trend came to dominate: the growth of the personal-service sector. “Personal-service sector” (from which I exclude the “producer services,” which aren’t “personal”) is an amorphous term  including well-paid occupations, such as physicians, but most advanced-country workers not employed in manufacturing goods are employed in distributing goods (wholesale and retail sales), restaurants and hotels, and the nonprofessional health-care sector, and these workers are everywhere paid more poorly than those employed in manufacturing. Hence the worry about the “disappearing manufacturing jobs.” Replacing manufacturing jobs with service-sector jobs entails slower growth in aggregate demand.

Social-status theory from evolutionary psychology

The question seldom addressed is why service-sector workers, such as retail clerks, food preparers, and nursing aides, are so poorly paid. Lower skill requirements may be part of the reason, but the fact that service-sector jobs remain unskilled may itself be best explained by their inherently lower status, which is the answer I propose. Socially stratified societies allocate social status to the various occupations based on criteria rooted in instinct. The personal-service occupations are accorded lower status because these occupations carry indicia of servitude and servility.

Modern social-status theory derives from evolutionary psychology, which emphasizes our continuity with chimpanzees, whose social life is characterized by dominance hierarchies. But evolutionary psychology also recognizes that bands of hunter-gatherers were usually egalitarian: “primitive communist” societies resisting any attempts by strongmen to dominate them or establish material or other status-based inequalities. With the agricultural revolution, the accrual of social surpluses and the need for large-scale social coordination both intensified and unfettered the striving for social dominance—power, prestige, wealth—from the group control that held them in harness throughout 90% of humankind’s span of existence, producing societies divided into social classes.

Allocation of status depends on instinctual triggers, including the marks of servitude: all else being equal, one who serves has less status than the one served.

Indicia of servitude aren’t the exclusive basis for awarding status to occupations, as demonstrated by the vast range of incomes among occupations in the personal-service sector. Anything associated with power increases status. Status theory can explain the higher incomes of manufacturing workers compared to peasants and farm workers by the prestige of cities, associated with urban power. The link between status and power might also explain why economists of the early industrial revolution, such as Ricardo and Marx, underestimated the ability of manufacturing workers to sustain wages higher than the price of bare necessities: the economists could not foresee the consequences of the comparatively high social status of workers in manufacturing, or perhaps, the relative status of manufacturing workers wasn’t evident to them. Even today, farm workers have far lower incomes than either manufacturing or personal-service workers. Physicians have high status because they command medical technologies that afford power over life or death. Consequently, the large incomes of physicians are a new development: 19^th century physicians weren’t affluent and highly respected, since they didn’t command the powers of modern chemistry. Occupations that require considerable skill and demonstrate intelligence are high status. But the trend is proliferation of personal-service jobs in retail sales, hotels and restaurants, and health-care, where workers have low status based on bearing indicia of servitude.

Status inheres in making useful goods that does not inhere in providing useful services. Dwell, for a moment, on the concept “the dignity of labor.” Even unskilled work has a dignity that is absent in personal service; think of the fake smile a sales agent or nurses’ aide must present. Insincerely agreeable affect is demeaning, compared even to unskilled manual labor, which may be boring but isn’t humiliating. This is only an example—and not the most obvious example.

The whole of society may conspire to bring about the low wages of service-sector workers. Laws protecting full-time workers often don’t extend to part-time workers, who are more common in the personal-service sector. But since wages are set primarily by market pricing, the assertiveness of the workers, especially their collective assertiveness, is probably the main proximal mechanism by which status influences income. High status produces confidence and sense of entitlement, a collective refusal to accept conditions below their due, because of their station in life.

Prospects

These trends paint a bleak picture: rising inequality, growing unemployment, and social-status deflation. Not only are the macro-economic trends unfavorable, but the means to resist them politically diminishes as the assertiveness of the downtrodden declines with their loss of self-confidence and sense of class entitlement. The analysis does point to a public policy that might slow or reverse these trends. Although no great cause for optimism in the absence of any practical means of effecting change, I’ll end on that note of relative optimism: we must ask how the social status of personal-service workers might be raised. 

If the triggers for low status are inevitably the signals of servitude inherent in these occupations, upgrading their status entails adding high-status signals. Statizing personal-service industries would accomplish this. Government, being powerful, is high status, and all else being equal, workers employed by government will enjoy higher status than those working in the private sector. The evidence includes the strength of unions in the public sector despite their obliteration elsewhere. Statization of personal services, regretably, isn’t today’s trend.