Zero-sum positional conflict is avoidable in a liberal market society

Will Wilkinson in Policy:

HL Mencken once quipped that, ‘a wealthy man is one who earns $100 a year more than his wife’s sister’s husband.’ Writing last April on the definition of poverty in The New Yorker, journalist John Cassidy takes the logic of Mencken’s satire of low-grade ressentiment fully seriously and plumps for its liberal application to public policy. Cassidy argues that it is indeed a hardship to make less than your wife’s sister’s husband—or your co-worker, your next door neighbour, or anyone within the same national boundaries—and proposes that for the purposes of government ‘poverty’ be defined in terms of relative rather than absolute deprivation. In particular, he suggests that the poverty line be set at half the value of the median income. ‘If poverty is a relative phenomenon,’ Cassidy writes, ‘what needs monitoring is how poor families make out compared with everybody else, not their absolute living standards.’ [1]

While capitalism does in fact produce absolutely egalitarian results—enabling the poor to own high-quality mobile phones, microwaves, and cars functionally equivalent to those of the wealthy—it cannot, critics say, manufacture more and better ‘positional goods’, to use economist Fred Hirsch’s term, because, basically, it is impossible to fit more than ten percent in the top ten percent.[2] No matter how trusty, safe, comfortable, and efficient your new Hyundai Accent may be, the fact that is within the grasp of so many will keep it from signaling that you inhabit the commanding heights of society. And that’s what you really want, isn’t it? To be king of the mountain?

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