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'Economic Man' vs. 'Status Man'

By Arnold Kling Published 10/04/2005


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"Among whites, higher grades yield higher popularity. For Blacks, higher achievement is associated with modestly higher popularity until a grade point average of 3.5, when the slope turns negative. A black student with a 4.0 has, on average, 1.5 fewer same-race friends than a white student with a 4.0. Among Hispanics, there is little change in popularity from a grade point average of 1 through 2.5. After 2.5, the gradient turns sharply negative. A Hispanic student with a 4.0 grade point average is the least popular of all Hispanic students, and has 3 fewer friends than a typical white student with a 4.0 grade point average."
-- Roland G. Fryer, Jr. and Paul Torelli, An Empirical Analysis of 'Acting White'



Many people think that we should look down on "economic man," who rationally calculates costs and benefits. They believe that people should have higher motives.



Instead, I suspect that the most likely alternative to economic motivation is a worse motive: status-seeking. I believe that is more important to curb our lust for status than our lust for goods and services.



The drive for economic gain helps the individual, and, as Adam Smith famously showed, helps others. Trade and economic growth are positive-sum games, in which there can be winners without losers. Moreover, when people seek economic gains, this is usually transparent. You usually understand when you and others you transact with are trying to improve your economic well-being.



Status, on the other hand, is typically a zero-sum game, in which one person's gain comes at the expense of others. Adding to the evils of status-seeking is that people often deceive themselves and others into believing that they are doing something for a higher motive when in fact they are seeking status.



Understanding the ill effects of status-seeking could lead us to revise our views on some issues. For example, I believe that colleges and universities would be better off if academicians were more focused on monetary incentives. For the most part, the alternative is not the "higher calling" of science or knowledge for its own sake, but the baser motive of status-seeking.



Beyond Economic Motives



In economics, we look at humans as self-interested calculators. However, from that standpoint, there is much about human behavior that raises questions. Why do people cave in to peer pressure to do harmful things, such as get bad grades? Why do wealthy people continue to work and to accumulate assets? Why do people take part in rituals that are painful or expensive?



We live in a highly-evolved, complex global society. Nonetheless, I believe that considerable insight into human behavior can be obtained by looking at ourselves as beings whose psychological programming took place in a primitive, hunter-gatherer era. One of the emotional drives for which we seem to have powerful programming is the need to seek status within our "tribe."



There are, of course, a number of theories of human motivation. For example, many people are aware of Abraham Maslow's theory of a hierarchy of motives. I prefer to think in terms of multiple modes of motivation that operate together, without necessarily taking precedence over one another. Possible modes include:



economic, the self-interested calculator
empathic, desiring close personal relationships based on understanding and empathy
"higher calling," trying to live a meaningful life
status-seeking, focused on membership and role within a well-defined group


According to a popular interpretation of Maslow's theory, people seek to satisfy basic physical needs first, then look at needs for relationships, and finally strive for "self-actualization." The latter might correspond to what I call the "higher calling" mode.



I tend to reject this hierarchical classification system. That is, I do not think that people "satisfy" any of the four modes that I outlined and then move on to other modes. Instead, the economic, empathic, "higher calling," and status-seeking motivators are always at work.



Most importantly, I believe that we often are mistaken in attributing our own motives. In particular, I believe that the status-seeking motive is more powerful than we recognize. Actions that we claim are undertaken for economic or higher-calling reasons may in fact be motivated by status-seeking.



Status and Tribes



The most basic form of status in a tribe is either member or non-member. I suspect that we have a deep-seated fear of being cast out by our tribe and sent into the wilderness. Such a fear is triggered whenever:



a teenager is not asked to a birthday party to which most of her friends are invited
several people in a group express tastes in music, art, sports, or politics that differ from your own, and you have to decide whether to state your viewpoint or keep silent
you are in a situation where you are expected to "go along" with something you consider to be stupid or immoral
your son or daughter embarks on a career path or marriage that is not "normal" for your peer group


I believe that people become most concerned with tribal membership when they are young adults. At that age, the uncertainty over whether one "belongs" is the greatest. Many of the rituals and ceremonies of adolescence, such as the Jewish Bar Mitzvah, serve to reassure a teenager of his or her membership in a tribe. As young adults, people are willing to undergo "hazing" rituals, and they may even be seduced by cults, which promise tight tribal connections in exchange for loss of individual identity.



Sometimes, people will do good deeds as a way of enhancing their status. However, in my view, that phenomenon is overshadowed by the harmful behavior that status-seeking induces. Examples include avoiding learning for fear of "acting white," joining cults and violent gangs, wasting money on status symbols (again, the Bar Mitzvah comes to mind, with the lavishness of the celebrations ratcheting up each decade), and seeking political power over others.



There are people who genuinely help the poor and others in need. However, I think there are many more people who seek the status of being perceived as championing the poor. Such status-seekers may attain their goal without doing much good. In fact, even if they harm their supposed beneficiaries, they may nonetheless achieve higher status. The so-called "relief effort" following Hurricane Katrina, appears to be following a typical pattern, in which very little of the funding is likely to reach those in need.



The Pecking Order



As we get older, our basic tribal connections become more of a given. Our concern shifts to focus on our status within a tribe. We want to have a clearly-defined role, and we want to be as high as we can in the "pecking order." Employers create promotion ladders to satisfy this desire for status.



James Clavell's novel, King Rat, describes a World War II Japanese prisoner-of-war camp in which an American corporal reaches the top of the pecking order among the prisoners. However, once the war ends and the prisoners are freed, he suddenly reverts to low-ranking status.



Corporate executives exhibit pecking-order motivation. CEO's at Fortune 500 firms may have no economic reason to continue working and accumulating personal wealth. However, they still can affect their status in the country club and among their fellow CEO's.



I believe that for many parents, where their children attend school represents a pecking-order issue. This may explain some of the intense anxiety about college admissions. If you took away the knowledge of where one's friends' children were going to college, I think it would turn out that many parents would be much less stressed about where their own children attend college. They would put more emphasis on rational calculation, which might make them happy to have their children go to a no-name school with lower tuition.



Reuven Brenner, an economist who has studied entrepreneurship, believes that people risk starting new businesses as an attempt to make up for a sudden loss of status. This also might provide a theory of why people become revolutionaries or terrorists.



The Basis of Academic Life



Academic life is very much oriented toward the pecking order, with an incessant focus on ranking individuals, departments, and institutions. Once professors have attained high status within the academic pecking order, they sometimes lose track of the fact that there are other areas of skill and wisdom in society. They cannot understand why they should respect or even be forced to listen to the opinion of anyone who does not share their exalted status. Their contempt applies to professors at less prestigious institutions, and even more so to businessmen and other non-academics.



The November 2005 issue of The Atlantic Monthly has several articles that show the status-seeking side of academia at work. An article by Matthew Quirk is particularly eye-opening.



"enrollment managers direct financial aid to students who will increase a school's revenues and rankings. They have a host of ugly tactics to deter low-income students and to extract as much money as possible from each entering class."



If government gave its financial aid directly to poor students, in the form of vouchers, then those students would have leverage with respect to colleges and universities. Instead, it is the other way around.



Another way that academic status-seeking behavior harms low-income students is the denial of accreditation. Colleges and universities use their ability to deny credit for work at other institutions in order to stifle competition and to maintain their own status. Instead of testing a student to see whether a subject has been learned satisfactorily, institutions simply refuse to accept credits from "inferior" sources of education. This status-oriented approach to accreditation pits traditional colleges and universities against the newer "for-profit" model of education, as described in a front-page story in the Wall Street Journal on September 30.



Professors are fond of speaking of the higher motives of academic life, such as the pursuit of knowledge and truth. Accordingly, they would reject economic approaches such as tuition vouchers or giving credit on the basis of test results rather than institutional status. In reality, academic resistance to such ideas is driven by the basest of motives -- the drive for status. The status-serving myth is that colleges and universities are more "pure" to the extent that they operate on a basis other than economic motivation. However, I believe that the opposite is the case: economic motivation would represent a step up from status-seeking