JQ666 wrote:However, I agree with Adam Smith that the human being is naturally selfish, therefore in all political & economic systems (left or right), the men with the power will ultimately work for themselves and their cronies!
Smith was right up to a point, but he was wrong in assuming that people are motivated by
absolute wealth. In fact, once people have reached a basic standard of living, they are motivated by
relative not absolute wealth. This accounts for why all the surveys of subjective well being show no improvement with increasing income.
At the root of the psychology lies status seeking, such that the Smiths are only happy when they have more than the Joneses, and the Joneses are only happy when they have more than the Smiths. Thus they end up locked into an environment-wrecking competition to consume more and more, when no amount of wealth can ever make them both happy at the same time. A Zero-Sum Game. For example, given the choice people will tend to opt for a job paying 25k in a department where others earn 24k, in preference to a 26k job where others earn 27k. Another bit of rather vicious research by Zizzo and Oswald shows that people will actually
pay to see the incomes of others reduced by more. Pinker documents an amusing incident when two tribes got into a status seeking war. It started with each offering the other ever more lavish banquets, but once they had escalated to the point that they were eating all they could they then started trashing the food. Then, once they were trashing their whole food supply, the one upmanship spread to all their other belongings. It all culminated with each tribe setting fire to their village in order to demonstrate to the other that they could afford the waste. Unfortunately, status seeking isn't quite as petty as it might seem, morbidity and mortality have both been found to correlate with status independently of wealth, even within affluent groups such as civil servants. Psychology professor Daniel Kahneman has done much of the research on the psychology of economic choices. He won the Nobel Prize for economics in 2002.
Pinker and Veblen identify four canons of status seeking, viz:
Conspicuous leisure
Conspicuous consumption
Conspicuous waste
Conspicuous outrage
The first two are relatively self explanatory. The third, conspicuous waste, is just an extension of conspicuous consumption. If you can't
consume what you buy, then
waste it. This is what's going on with all the food waste that's currently in the media, having a fridge the size of a shed filled with food you can't eat is a status symbol. (As is paying 10 times the price for pre-packed rather than loose food. The packaging advertises the fact that it cost more, otherwise it would be self defeating if others can’t see the difference.) When Gordon Brown appeals to people to stop wasting food he's missing the point, it's a bit like telling Alan Sugar that he could save money by buying a Timex instead of a Rolex. It would just invite a funny look, and a comment something like "Yes, I know,
that's the whole point".
Conspicuous outrage is the root cause of Fashion. The Top Dog in a social group can assert his status by doing something outrageously different. The message he sends is "My position in society or the group is so secure that I don't need to conform". People immediately below him in the social heirarchy can then elevate their status by mimicking the Top Dog and being as different as possible to those below. As the effect ripples down through the social heirarchy, so a fashion emerges. As soon as this occurs, the Top Dog now has his status undermined unless he changes again, and so the whole process keeps repeating endlessly.
The problem with fashion and status seeking is that they're environmentally and socially destructive. People are filling landfill sites with nearly new and serviceable goods at an escalating rate, simply to keep up with fashion and the Joneses. The whole economy becomes like a huge conveyor belt digging resources out of one hole in the ground, and burying them in another, and the whole political system is predicated on the need for the conveyor belt to keep accelerating at 2% per annum........
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