In a book titled Human Universals, professor of anthropology Donald Brown listed hundreds of human universals in an effort to emphasize the fundamental cognitive commonality between members of the human species. Some of these human universals include incest avoidance, child care, pretend play, and many more. A concern for relative status was a human universal, and relative status is a nice way of saying people have envy and desire power [status seeking, benchmarking, all fall under this more sensational description, envy].Now, you may consider this abstract or parochial, but in fact it has other implications that make it anathema to many. Consider Easterlin's Paradox, the finding that after a minimum level of income has been achieved, measured happiness does not appear to rise much. If people's happiness is a function of wealth, we are much wealthier than our ancestors but not much happier. This has been documented in many countries, such as Japan, where income rose five-fold from 1958-1987, yet people remained about as happy. This puzzle been addressed in such books as Gregg Easterbrook's The Progress Paradox, David Myer's The American Paradox, Barry Schwart's The Paradox of Choice. It is a paradox, because it is contrary to what we think should make people happy. If people are primarily envious, this is no paradox at all. Libertarians are fond of highlighting criticisms of Easterlin’s Paradox, because they can’t stand the thought that people are primarily status seeking. This is because the assumption of simple wealth maximization has the nice property that liberty maximizes people’s wealth and thus happiness; if people are primarily status seeking, letting people alone won’t necessarily increase aggregate welfare, because there will always be an underclass that is relatively poor, and unhappy. Status seeking is all about positioning oneself in a rank. Envy is simply another way to approach the status game, noting the focus on those above. Status seeking manifests itself in many ways in common behavior. Much signaling, as when one buys conspicuous goods like a fancy watch, is about signaling status. The pleasure they generate is not a means to an end, it is an end, the feeling of having a superior status, at least for an instant. Robin Hanson, who blogs at OvercomingBias, often investigates things that are more about signaling than what they are putatively about: art, charity, and humor, often aren’t at all about about art, charity, or humor. For example, he notes that perhaps one reason for the marked decline in fertility among developed nations is that for women, being successful at work signals higher status than being a full-time mom. Thus, many women choose to have fewer children to signal their status. This is envy because seeking status is motivated by a desire to outperform peers, as opposed to anything related solely to mere wealth. Indeed, from an evolutionary standpoint children are the ultimate form of wealth, but if we are hardwired to outdo our peers that objective is no longer primary, but rather incidental. Or consider Steven Pinker noting that many aspects of speech involve protocols around dominance, so that people say things like ‘if you could pass the salt that would be awesome', as a way to express a command without appearing domineering. Many behaviorisms acknowledge the fact that envy, the intrinsic hatred of being inferior, is always present and must be managed to be liked. Or consider that economist John List finds that our desire to share depends on how much the other person has and how they got to their position, greatly complicating the simple self interest. Some have highlighted this suggests a ‘sharing' instinct, in part because augmenting the standard model with a preference for equality seems so nice, ‘is' consistent with ‘ought'. Alas, a lot of generosity consists of signals and quid pro quos in a the context of envy. Relatively, our desire for just ‘more stuff', as the standard model assumes, has no such omnipresence. Humans are inherently social creatures, and so our greatest rewards and problems come from other people, as opposed to ‘stuff'. For economists to focus on wealth as consumption, independent of others, ignores all this and so and so has to massively nuance theory to get things to explain much of what we do. Consider the extreme focus by inner city Americans on respect. ‘Disrespecting' someone is often the beginning of a fight. Stress isn’t caused by deprivation of stuff so much as feeling your talents are unappreciated by your colleagues, friends, or family. An envious person wants to feel appreciated by others. This is why if you want to make someone like you, ask them a small favor. This implies you value them, shows you appreciate what you can do for them. In contrast, if you offer to do something for them, they generally find your attention meddlesome, and implying they are relatively incompetent. In standard economic models of self interest, this would make little sense.
Implications of Envy In Helmut Schoeck's Envy, he discusses the dysfunctional cultures all have an excess of undisguised envy. An extreme example are the Navaho, who reportedly have no concept of luck or of personal achievement, and believe that one person's success can only come at another's expense. This kind of attitude effectively discourages people in such a society from adopting a better way of growing crops, etc. This may explain why James Madison insisted that no democracy has not committed suicide, is that there is a constant push to greater taxation until the productivity created by these elites evaporates, because nothing hits as directly at envy as progressive tax increases. Functional cultures are not so defensive, and so adopt better ways even if not invented there, allowing countries like Japan to move quickly into modernity with all the advantages that wealth brings, by emulating a superior western technology, thus acknowledging their backwardness. What is so remarkable is how rare the Japanese strategy has been. One must remember that the selfish behavior initially described by Adam Smith was seen as antithetical to a good society, and many argued that we are not that Machiavellian, and prioritized God, Nation, or honor. The Invisible Hand arguement of Adam Smith argues the competitive equilibria of individuals acting in their own self-interest are socially desirable. Later, game theorists and evolutionary biologists showed that altruism is consistent with self interest in repeated interactions (the optimal rule ‘tit-for-tat’ implies being nice, provocative, and forgiving). Self interest is morally defensible in these contexts, which is why having shareholders simply maximize share value is a counterintuitive, but optimal policy in most economic models. Is there a similar, counterintuitive silver lining to envy? ..