The pursuit of higher status is tautologically a zero-sum game.
This is necessarily true because being “higher status” is inherently dependent on other people in the social stratum being below you. This means that there are necessarily winners and losers. Marxist theorists look at the pursuit of wealth the same way.
Can labourers expect to make as much money as their employers? Certainly not in a capitalist economy. It is also certain that those who own the means of production require labourers for their firms in order to continue generating wealth. So, in a sense Marx is right: the very wealthy — who own the means of production — need the less wealthy to exist (more below on why I don’t use the words “rich” and “poor”). It’s understandable to see why capitalism would seem like a zero-sum game — and it would be — but only in a world where nothing ever changes.
Peter Thiel explains this very thoroughly in his book Zero to One: throughout history, humanity’s greatest leaps forward have not come from changes in human rights laws or the work of academic researchers and scientists, but rather from the innovations brought forth by people trying to get rich. More specifically, it has been singular events (inventions and major innovations in the realm of technology) that have ultimately propelled us into the future and revolutionized the way we live for the better. From the phonograph to the Internet, major technological and scientific leaps have overwhelmingly come thanks to capitalistic incentives.
Even the Industrial Revolution, despite all its horrors, liberated more than eighty-percent of the world’s population from having to work on farms to survive, thus showing us that when we separate wealth from status, more often than not, capitalism is, in fact, a positive-sum game.
What does it really mean to be “wealthy” or “poor”?
Wealth is best defined as money and other assets beyond what we need to survive comfortably. Unlike social status, wealth is not inherently dependent on ranking in the social stratum.
To be “poor” means to be in a state of scarcity and substandard living, again, like wealth and unlike social status, poverty is not inherently dependent on ranking in the social stratum and this is where the Marxist perspective fails.
The best way to understand this is by considering that the average poor person in the West can still own a smartphone and have their own bedroom; not so in the Nineteenth and even early Twentieth centuries.
It is generally accepted that it is better to be a poor person in America today than to have been a rich person in the Nineteenth Century when we consider the severe deficits in Medicine and Technology. Just the fact that obesity is considered a major problem in modern impoverished communities should be enough to hammer this point home.
Capitalism, as a system, has ultimately proved itself to be a positive-sum game and therefore there is nothing inherently wrong with the pursuit of wealth, it is in fact good. This begs the question: is there anything wrong with the pursuit of wealth as a means of procuring status? The two pursuits would seem to be inexorably linked.
Because the pursuit of status is necessarily a zero-sum game, the pursuit of wealth, for status, doesn’t stop when all our needs and desires are met by money, inevitably resulting in wealth creation for the sake of wealth creation. Is this harmful? It could be but not necessarily any more so than doing anything we do to play the status game.
It’s difficult to quantify and every scenario poses its own unique set of risks to rewards. If any conclusion, however, can be drawn from this article, it is that the desire to procure wealth is more often than not a positive force regardless of the incentives. A much more difficult question would be to determine whether the economically beneficial incentives we relish thanks to people’s desire for status are outweighed by the negatives that go along with them.
