A few months ago I had some laughs at the expense of New Yorker “economics” writer John Cassidy, who expounded the theory that, since there’s very little actual poverty in America, we ought to dig deep into our pockets and create a welfare system that caters to the “relatively poor”–those who feel deprived and stressful because they have to buy their shoes at Payless while some people can afford Manolo Blahniks (see my “Gimme Some Money–I Feel ‘Relatively’ Poor,” March 30).
It turns out that Cassidy isn’t just some econo-eccentric loner who read “The Greening of America” in college and is trying to update it for the ’00s. He’s just one of a number of high-minded intellectuals out there in left-land who have come up with a hot new justification for income redistributiion: a theory called “relative position.” In an article in Policy magazine, Will Wilkinson lays it out:
“The politics of relative position is the egalitarian welfare statist’s new favorite game. Richard Layard, head of the London School of Economics Centre for Economic Performance and member of the British House of Lords, argues that considerations of relative position justify regulating and even censoring advertising, for it makes us feel bad to see people who own things we cannot afford, and even if we can afford them, having them wouldn’t make us happy. British epidemiologist Richard Wilkinson claims that low relative income is a direct cause of illness, and that equalising income redistribution ought to be reconceived as a ‘public health’ measure. Cornell University economist Robert Frank argues in rigorous detail for a steep consumption tax designed to dampen the alleged enthusiasm for zero-sum status races through the display of opulence. ‘Every time [some people] raise their relative income (which they like),’ Layard writes, following Frank, ‘they lower the relative income of other people (which those people dislike). This is an “external disbenefit” imposed on others, a form of physical pollution.' The solution? Slap a tax on ‘the polluting activity’-you and me working hard to get a raise-in order to get us to play more and produce less….
“The politics of relative position encourages us to see life as a competitive climb up a ladder of status. If there can only be one person per rung on any dimension of status or rank, then each step up the ladder for one person logically requires a step down for another. You can’t make space for an eleventh restaurant or university on a ‘Top Ten’ list, just as two runners can’t both come in first. Competition for higher position is a paradigmatic zero-sum game. So if inherently scarce positional goods like ladder-rank are highly valued, then whenever you get a raise, a promotion, or a swank new suit, it will create a shower of negative psychic consequences that rain on those occupying the rungs below. So the story goes.”
Wilkinson quotes this example–offered by Robert Frank–of relative-position theorizing at work:
“[I]f some job candidates begin wearing expensive custom-tailored suits, a side effect of their action is that other candidates become less likely to make favorable impressions on interviewers. From any individual job seeker’s point of view, the best response might be to match the higher expenditures of others, lest her chances of landing the job fall. But this outcome may be inefficient, since when all spend more, each candidate’s probability of success remains unchanged. All may agree that some form of collective restraint on expenditure would be useful”
As Wilkinson wryly observes:
“Perhaps Frank has yet to hear about Overstock.com, where you can buy a $1,000 suit for $300.”
The term “collective restraint,” by the way, is relative-position-speak for “government regulation.” Which is another way of saying “price caps” (or maybe “taxes”) so that no one would be able to buy a fancy suit and we’d all go around looking like Soviet functionaries from the 1970s–which I guess would cheer us up.
But what I want to know is: Why should the government be in the business of ensuring that people feel happy?