The Economy of Esteem

Excerpt of the day, from the paper, The Hidden Economy of Esteem;

"It is said that the first treatise on the Gulf Stream began with the sentence `There is a river in the ocean'. As there is indeed a river hidden in the tumult of the ocean, so we suggest that there is an economy hidden in the whirl of social life.

We do not call this hidden economy of esteem to attention, however, just for the sake of improving the inventory of the social world. When we understand the ordinary economy, we identify aggregate, unintended consequences that affect individual life and we put ourselves in a position to investigate how far those effects can, by generally acceptable critieria, be improved. And as it is with the ordinary economy, so it is with the economy of esteem.

When people compete and exchange in the patterns illustrated earlier, they will collectively give rise to certain individually unintended consequences. Thus the fact that people compete in performance in any area may drive the baseline of evaluation and esteem higher and make it more difficult for each to achieve a high level of esteem there. The fact that achieving esteem in a given area gets to be more difficult - the cost in terms of effort and time goes up - may make it more attractive for them to look to other areas of esteem-pursuit or pursuit of satisfaction generally. And the fact that they compete in seeking suitable publicity for what they do in any domain may make it more and more difficult to achieve publicity: it may drive the cost in terms of effort or time or money quite high; indeed it may lead to a pareto-inferior outcome in which each does far more than they did previously but attains only the same result in terms of esteem.

These unintended consequences return to affect the individual scenarios of those agents who are collectively responsible for them. That the baseline of evaluation rises in a given area will tend to mean that overall performance rises too. That the costs of doing well in an area rise relative to the costs of doing well elsewhere will tend to drive people out of that area and into others. That the costs of achieving publicity increase, without any compensating benefit, will mean that the people who seek publicity will be worse off overall.

These effects are not ones about which we can easily remain indifferent. With certain areas most of us will cheer about a lift in people's performance, with other areas we will deplore it. Most of us will be concerned about the fact that people are leaving certain domains to make efforts elsewhere, while with other domains we will be delighted at the fact. And in most cases all of us will deplore the waste of effort found when everyone's publicity-seeking costs go up and no one among them benefits. Thus we can hardly avoid thinking about how such aggregate, unintended patterns might be shaped and channelled to better effect.

We began this paper by mentioning the way in which the forces of esteem and disesteem can avoid problems of enforcement and give rise to certain norms. Those norms may be beneficial in enabling people to avoid certain collective action predicaments ± say, the littering problem -or, like the norm of revenge, they may do more collective harm than good. We cannot be indifferent about which norms prevail in our society and so we must be concerned about how far the forces of esteem and disesteem may be directed towards the generation of norms that we would all take to be for the common good. It may be that by setting up certain generally endorsed standards, for example - say, standards of conscientiousness in public life -we can activate forces of esteem and disesteem and improve the performance of public authorities. It may be that by making some information available -say, information about the harmful effects of secondary smoking -we can activate forces of esteem and disesteem and reduce the incidence of harmful private behaviour. And so on.

We call the economy of esteem to general attention, then, not just for motives of intellectual interest but also for reasons of practical concern. Charting the economy of esteem will certainly lead us to a better understanding of the social world but it should also make it possible to change that world for the better. Like any worthwhile exercise in economics, the enterprise envisaged here holds out exciting prospects on both the theoretical and the policy-making fronts."