Thursday, October 06, 2005

Limits to Economic Man

In Tech Central Station, Arnold King has an article, ‘Economic Man’ Vs. ‘Status Man’ (6 October 2004), the gist of which is that the concentration on status (among peer groups and as a differentiator of self from others not in the peer group) is detrimental in a zero-sum sense, and that a resort to increasing the influence of economic rational calculation would lead to a better society, especially as economic gains are non-zero in the benefits they bring to everybody.

He refers to minorities who waste themselves and their lives in street gangs, etc., deliberately under-achieve in education, and pull down those in their peer groups who break the ‘rules’ by trying to better themselves. The case is compelling.

Adam Smith had plenty to say about this topic in “Moral Sentiments”. He showed the positive things about human behaviour (sentiments for each other, self-appraisal of one’s conduct by consultation with the views of the ‘impartial spectator’ or conscience) and also the negative things (overly interested in the foibles, lives, tragedies and gossip of the ‘High and Mighty’, the ‘celebrities’, and the rich and powerful, as against the same events affecting their neighbours). He mentioned these habits of the ‘celebrity-struck’, without prescribing against them in the manner of Arnold King; he simply commented about these proclivities as a prelude to understanding just how deeply ingrained they were in the population, and something that should be understood by those who would try to change things.

Smith drew a distinction between being ‘praised’, or seeking ‘praise’, and of being ‘praiseworthy’. The status seeker craves praise, whether they deserve it or not. The moral person strives to become praiseworthy whether they are praised or not.

Smith saw the status seeking person’s foibles as part of the bonds that stabilised society and the parts of it. The ties that bind are often the ties that keep that portion of society that adheres to its local norms in a locally-stable status quo. Replacing street gangs without something in their place is not necessarily a step towards local harmony. Upset the balance between 'territories' and there is deterioration in public safety while the remnants ‘sort it out’.

Arnold King’s other point is that “economic motivation would represent a step up from status-seeking.” The plain fact, recognised by Adam Smith, is that such a ‘step up’ is not going to happen and it cannot be enforced.

‘If only the world was not like it is, what a wonderful world it would be’ believes every ‘man of system’, and too many of them end-up trying to enforce through violence what they cannot obtain by agreement.

Worse, using Smith’s theory of status (compatible with what Arnold King critiques about status seeking), we can safely assert that all ‘men of system’ nurse their fantasies of the ‘better world’ they envisage in concert with those who agree with them, forming an exclusive status group of their own!


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