The next section in Chapter 5 of George Will’s The Conservative Sensibility (2019) is Envy, Positional Striving, and Andrew Carnegie’s Sixteen Cents. It circles back around on the ideas introduced here on 7/23/19, as we entered the chapter. Envy is a negative human emotion. And envy increases as society becomes wealthier. This was observed by Fred Hirsch, Social Limits to Growth (1976), in which he distinguishes the “material economy” from the “positional economy”.
The material economy is the aggregate production of goods and services. The positional economy refers to the goods and services that can only be enjoyed by a minority of people. As American affluence satisfied more and more basic needs, money, aspiration and energy have turned to “positional competition” – quest for the good life – nice home, cool car, awesome vacations, “superior” job and overall financial security. The good life also provides plenty of time to pursue passions – athletics, art, music, literature – whether you get paid for it or not. Not everyone can enjoy these things because they are, by definition, relative.
Positional striving is a zero sum game where one person’s gain is necessarily a loss for others. It produces substantial wealth inequality. Isn’t that bad? Well, a society that values individualism, enterprise and economic freedom should not be surprised or scandalized by extreme wealth inequality. We should welcome it because the only real ways that “fix it” are damaging and unpleasant (e.g. war, revolution, plague, stock market crash). There is a fine line between positional striving and politically generated resentment, which is just evil envy. George Will writes that positional striving results in a healthy “deferral of gratification that makes possible high rates of investment in capital…good for society as a whole and are encouraged by high rewards for those who accept the discipline involved”.
Besides, we learned in the first year of this Blog on 9/22/15 from philosopher Harry G. Frankfurt that inequality is not objectionable as a matter of moral reasoning. His books On Inequality (2015) and On Bullshit (2005) make it clear that anyone claiming otherwise is either bullshitting or attempting to impose an economically damaging political agenda of Big Government wealth redistribution. Those arguers try and convince you that you don’t have enough – they’re wrong, your personal war chest is plenty; or, that others have way too much – seeking to stir up unfounded envy and resentment – don’t let them.
Next week, before we leave this section of the chapter, the Grumpy Economist is back at it ferreting out the folly of fallacious economists like Paul Krugman and Joseph Stiglitz.
Preview: if you follow economic policy debate, read John Cochrane’s 8/23/19 blog post.
He is incredulous that a few economists continue to push “secular stagnation” – that term seems to be used by economists making a political argument but disguising it as an economic one.