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Status Won’t Go Away

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Alex [2], Arnold [3], Greg [4], and Megan [5] each mention solid reasons for questioning the wisdom of reducing envy by taxing the rich and giving the proceeds to the poor.  (Brad DeLong [6] recently offered such a proposal.)

It bears repeating that monetary wealth is certainly not the only dimension of our lives that matter to us and that we use as a basis for comparing ourselves to others.  Indeed, I suspect that it is not as important as many who champion “redistribution” believe it to be.

Back in April the New Yorker magazine ran this interesting article [7] by John Cassidy in which Cassidy used evidence of social hierarchies in some animal species to suggest that we humans should “redistribute” income.  The specific evidence was that animals low on the totem pole were more likely to get sick and die than were animals in the same group but higher up the social pecking order.

A few weeks later the New Yorker published this letter of mine in response:

John Cassidy bolsters the hypothesis that people’s health is harmed by relative (rather than absolute) deprivation by citing evidence from the animal kingdom (“Relatively Deprived,” April 3).  For example, “dominant rhesus monkeys have lower rates of atherosclerosis (hardening of the arteries) than monkeys further down the social hierarchy.”

Contrary to Cassidy’s suggestion, however, such findings do not support policies to redistribute income.  After all, animals with social hierarchies have no monetary income.  Because status among humans is determined not only by income but also by traits such as political power, athletic prowess, military heroics, intellectual success, and good looks, equalizing incomes will intensify the importance of these non-pecuniary traits as sources of status.  And there’s no reason why persons with low status in these non-pecuniary categories will not suffer all the stress and envy now allegedly suffered by people with low incomes.

Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA