Kevin Simler’s 2013 essay on the economics of social status is a
great, enduring Sunday sort of longread that should be required of
anyone contemplating using the phrase “reputation economy” in polite
society.
Contrary to my own views, Simler argues convincingly that you can have
an economy based on status — that is, that status can be spent and
expended, exchanged for goods and services. He also makes a strong and
important point that status isn’t entirely social — it has important
biological correlates in things like cortisol and testosterone levels
that have an inescapable effect on the cognition of the people who
experience them. In other words, your status (and the status of those
around you) isn’t just about how perceive one another: those perceptions
have a subrational impact on your mood and perception, which you can’t
change merely by applying rationality to the problem.
Most interesting to me was the section of the essay where Silmer tries
to fit common economic concepts like inflation, liquidity, arbitrage and
forex into the idea of reputation economics. I’m still not convinced
that monetary economics are the best analogy to status games — for one
thing, you can’t spend money and retain it, while there are many
situations in which conferring status on others build your own, and
where failing to do so decreases your own store.
