Monday, January 13, 2014

Veblen and Galbraith were the original anti-hipsters

For very interesting perspective on Ryan Murphy's life's work, read this.

He frames his anti-hipsterism as a criticism of status-signaling. To a certain extent I think this is fair, but what I've always found odd about Ryan's take on all this is that he seems to classify just about any social trend as status-signaling because it's trending, and that he doesn't seem to appreciate the fact that the whole reason these things "signal" anything is that there's an affiliated value that's genuine. Perhaps the line between the two is fuzzy sometimes. Localism is a good example. It's not a status-signaling thing to like to live in a community that's interesting, diverse, and close-knit. Those are things that would be valued regardless of what sort of status they signal. There are lots of ways to participate and build up such a community, and one of those ways is through the market: buying local. Now there are other facets of the localism tendency these days that are clearly just posturing as well. Ryan, I think, tends to jumble a lot of that together and scoff at any expression of localism as a value.

Veblen is perfect to mention as a version of Ryan from an earlier time, particularly the charge that anti-hipsters themselves share a lot of the hipsters' faults. It's hard to think of a more hipster economist than Veblen, after all, and yet as Ryan points out Veblen kicked off the whole anti-status-signaling thing. Marx isn't ironic enough. He isn't ironic at all in fact. Doug North seems grumpy where he should be blasé. Ken Boulding is in some sense, but he seems too peppy to be a hipster. I think Veblen wins this one.


  1. What about the late James Duesenberry? Wasn't his "relative income hypothesis" support for Thorstein Veblen's "anti-hipsterism-before-it-became-cool-or-even-conceived" position?

  2. About localism: what you said, except there's a more specific foundational element.

    Let's say the Millenial Generation starts with those born in 1980; ie, everyone too young for grunge back when grunge was in, and everybody young enough to have had the internet when still in high school - by 1998 internet adoption had hit 36%, which is pretty good since we're actually talking about the subset of Millenials who are middle class and white.

    Think about how these people grew up. For tens of thousands of years humans were intensly connected to land and home; most humans born before the Industrial Revolution never ventured more than like 50mi from their place of birth. Then suddenly came urbanization, but even then there were intensly communal ethnic ghettos. Then came suburbanization and totally car-dependent life, which was really peaking among the white middle class right as the Millenials came of age, in which people grew up in new towns where nothing was old and nobody had roots and Grandma and Grandpa still live in "the city" which is a place where Mom and Dad go to work and occassionally you go to see a ballgame or a concert but it's also dangerous and mysterious and nobody you know lives there even though its in the middle and you get newspapers root for sports teams with the name of that city. Then comes the Internet which further blasts apart the connection between people and the space they inhabit by making it possible to transmit more and more information - both in kind and degree - instantaneously across any amount of space.

    So this whole localism thing is an extremely natural reaction for people who lived most of their lives completely disconnected from having any kind of roots in place, space, or land, and now often find themselves moving into the center cities, with history and culture and activity and roots and old buildings and character, that their suburban lives lacked, and find themselves taking subways and buses and bicycles when before they drove. Developing an intense affinity for a newly-adopted home, especially for people who grew up alienated from the very idea, is very very attractive.

    And sure, it gets to be trendy and eventually dissipates into pure signaling. But that's everything. Most trends start for a very compelling reason before the sign swallows the signifier.

    1. "Let's say the Millenial Generation starts with those born in 1980; ie, everyone too young for grunge back when grunge was in"

      So eleven yrs old is too young for music? A lot of my hipster friends were playing their favorite bands' songs on guitar by the age of ten. Most of them did a lot of skateboarding growing up, too. I wouldn't say that suggests a lack of space contact with their adolescent neighborhoods. The ones that take buses and bicycles do so because they can't afford a car. They tend to move into rough neighborhoods because it is cheaper. The neighborhoods then become trendy and they can no longer afford to live there.

      Of course, you probably know different hipsters than I do. I have about 50 friends in that category. My guess is that everyone on here is picturing a different group for this label.

  3. I've been calling it status-signally for a while, including in my second dissertation chapter. I got that from Potter's "The Authenticity Hoax." It seems like Potter, Brooks, and Lander came to these things independently, which is itself interesting. It's funny you phrase it as "affiliated value that's genuine;" Potter's chapter on this is called "conspicuous authenticity."

    I don't believe it is sufficient to say something is status-signally because it is trending. Jersey Shore was a negative social signal when it was trending.

    Compare this to old school status-signalling - e.g. learning Greek/Latin. Learning Greek/Latin is less useful than learning math, probably less useful than taking a course in business administration, and probably only marginally more useful than playing video games. That statement would horrifying anyone who somehow still has aristocratic values. But most of the benefits of Greek/Latin that could be tested never really existed, and the ones that do (like better intuition about the meaning of words in English you hadn't already learned) aren't particularly important. Those who still stand behind the essential importance of a liberal education or whatever must instead defend it by saying things that are impossible to test rigorously. Yet if we cannot say learning Greek/Latin is status-signalling, we cannot say anything at all is status signalling. You can always come up with a justification of things that signal status, as the whole point of the reason why they signal status is that they once had the veneer of something we should morally applaud.

    The reason why buying local in these contexts is an example of signalling isn't just that they are trending. It is that they share the qualities of learning Greek/Latin I just listed. They have the veneer of morality. I didn't mention it, but they are costly, both in the literal sense and the economic sense relevant for signalling. The primary dimensions localism is defended (which you don't seem to believe but both google and the real world tell me otherwise) is that they are good for the local economy and good for the environment. On both those margins, they are wrong. Everything else about local is very wishy-washy and impossible to disprove. It all sounds much like the pleading of defenders of liberal education against the tide of majoring in business.

    In other words, the structure of the arguments defending different forms of status-signalling are all the same. If we cannot say that buying local is status signalling because of the many possible positives we cannot test, we cannot say that earlier versions of status-signalling are in fact status-signalling either. Which is fine, but you should be disagreeing with Robert Frank as much as disagreeing with me.

    1. "Yet if we cannot say learning Greek/Latin is status-signalling..."

      It is fascinating to watch boorish philistinism try to pose as sophistication!

    2. I hope I have not been THAT confusing.

      You can say that localism can be status signaling. A great deal of it very much is.

      What you cannot do is act like the whole tendency to buy local is status signalling. Much of it isn't too, just like some people actually learned Greek and Latin to enter the clergy or do other things. My mother in law learned Greek and Latin and taught it to kids (while I'm not sure becoming fluent is especially high value, getting experience learning another language in elementary school is probably good for kids), and her father learned Greek and Latin and served as a well regarded classicist at the University of Chicago and at Oxford. Neither of them were signalling.

      Then again, a lot of Greek and Latin learning was and is signalling. I don't think any of my modest immersion into localism is signaling. I imagine a lot of signalling is subconscious but I feel pretty safe saying that. The people that rail against localism qua localism without recognizing all the different reasons people consciously buy local are at best not understanding what they are claiming to offer insights into and at worst doing status signalling of their own.

      I don't have a problem - I've never had a problem - that do the mileage calculations to determine the environmental footprint of certain kinds of local purchases to show people it has a bigger carbon footprint than they think. Learning facts is a good thing.

      Think of militant vegetarians bugging you about the carbon footprint of the meat you eat and not stopping there but criticizing your entire practice of eating as bad practice.

      That's how the anti-locavore thing comes across. If you were just publishing food-mile studies that would be one thing. It would be good, I think, for consumers to be well aware of the carbon footprint of a burger vs. a salad and a farmer's market vs. a grocery store. That's not the issue here.

    3. re: "They have the veneer of morality. I didn't mention it, but they are costly, both in the literal sense and the economic sense relevant for signalling. "

      This is dubious.

      If I pay 50% more for some item of local production it is only "costly... in the economic sense relevant for signalling" if I don't value it 50% more.

      In the literal sense of costly course it depends on how much and what you buy. My local wine consumption isn't costly relative to other comparable wine. Other sorts of status signalling in this market probably works in favor of buying local (unless your "local" is Napa or Bourdeaux). As far as local produce it is more costly in most cases I'm sure, but it doesn't take up enough of my budget to be all that significant (and I imagine this is true of most people that consciously buy local).

    4. Certainly learning Greek/Latin because you plan on being an historian or a theologian or whatever it is relevant. I'm only talking about its presence on classical education, where it is treated as magically making you a more wise person than learning a language that you might regularly use, like Mandarin.

      I do think nearly all of this acts subconsciously. Once it becomes publicly known that something is conspicuous consumption, it loses its value as conspicuous consumption. This is actually why I call these behaviors irrational. People really do believe in the global warming stuff. People really did believe that learning Greek/Latin made you wise. People get drawn to something because it sounds intuitively moral (e.g. for buy local, ingroup solidarity) and then work backwards to rationalize it with pseudo-science/pseudo-economics.

      As I said, my skepticism of your other claims about local is that everything falls so neatly into the conspicuous consumption story. Maybe the things you mention really do somehow improve social capital or whatever but we can't measure it. Maybe the things mentioned by liberal education advocates really do make you wise or whatever but we can't measure it. The point is that the limits are the same, so if we can't claim one is conspicuous consumption, then we can't claim anything ever is conspicuous consumption.

      Also the "costly" thing is gonna get a bit metaphysical. You could "value" it for subconscious signalling reasons. But I was being too cute there with the way I phrased it all above. The only thing that matters is that buying local is costly enough to allow the separating equilibrium to arise.

    5. re: "I'm only talking about its presence on classical education, where it is treated as magically making you a more wise person than learning a language that you might regularly use, like Mandarin."

      Yes, my point is that the "I'm only talking about..." always seems to be left out or hidden in the shadows.

      Some of this is difficult to measure, but then again so is the signalling value. It seems odd to presuppose the status-signal is the dominant factor.

    6. I should be more specific about this type of thing. You're right.

      Frank's Darwin Economy came out in 2011. His arguments rely heavily on the idea that splashy 16th birthday parties of rich families can only be thought of as a positional good. I suspect that it's more the case that these people have more money than they know what to do with, so they spend it thusly. To me the case is much stronger that buy local is more about conspicuous consumption than a 16th birthday party is. Way back when, people did use big houses, big parties, and flashy earrings to show how high status they were. Today doing that just makes you look like a crass asshole. As I said in the original post, to whatever extent bashing hipsters is outdated, Frank is hilarious unaware of the way modern society works.

      Actually, let me be a bit more circumspect. "Bling" still exists, but I'm talking about what signals status for today's elites, not what hip hop artists or professional athletes choose to spend their money.

  4. Murphy's anti-hipsterism is just a signaling mechanism.

    1. And this is not just a joke: this is a pose, meant to show the world what a "hard-headed," "rigorously logical" thinker we are dealing with, who has pierced the illusions from which all others suffer.

    2. I just wish he'd show us how rigourous he is by talking about something more interesting.

  5. Learning Latin or Greek isn't a means to an end, so the idea that its value depends on whether "rigorous testing" can show that it actually serves some end is just nuts. This is depressing.

    1. Then learning Latin or Greek is no morally better than playing video games. I'm not going to fight you if learning ancient languages is a consumption good for you.

  6. I like how consumer sovereignty is a sacred, unquestionable principle, one that puts any criticism of advertising and other market power firmly beyond the pale... *Unless* the consumers in question prefer local, or American made, or organic, or "Fair Trade" goods, as this reveals them to be economically illiterate boobs who need to be lectured by economists.


    1. Advertising is probably less beneficial than most free market economists believe but far more beneficial than most members of the public believe.

      The way to think about these things as being equivalent to valuing sunk costs. Local/American/organic/fair trade are at odds with the ends they purport to serve, just as valuing valuing sunk costs screws up economic calculation.

      I'm also not at all a typical free market economist, which you would quickly realize if you skimmed my blog.

  7. Ryan: If I say that learning Latin and Greek is a good thing, I'm not making any sort of claim about preference satisfaction. It may surprise you to find that, in the conversation of mankind, the ethical subjectivism (or ethical nihilism) reflected in your comment is distinctly a minority position - albeit one that most economists adhere to unthinkingly and dogmatically.


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