Positional goods are ones whose advantages are affected by social factors (notably, whether other people also have them, or not: country cottages, private educations, iPods, cars). They are a major feature of unequal societies. The “positional economy” was first described by Fred Hirsch in “Social Limits to Growth” (Routledge, 1977) and the concept was used more recently by Robert Frank in “Falling Behind: how rising inequality harms the middle class” (2007).

This piece in the New York Times of 24th April (also included in The Observer’s NYT supplement, 4th May 2008) gives a very vivid illustration of their impact in China:

Published: April 24, 2008
With First Car, a New Life in China

Bradsher explains that family cars have become essential for improving your sons’ marriage chances (and thence the possibility of having grandchildren). But “When [the father of the family he talked to] courted his wife in the early 1980s, he needed only a bicycle.”

Bradsher’s article ends with the tragic news that:

In two weeks, he will go to a leading hospital in Shanghai for more surgery, a five-hour drive to the north, followed by two more rounds of chemotherapy. But he will not be going in the family car: he sold it for nearly $8,000 last year to help cover his medical expenses.

It is a common occurrence in this country, nominally communist, but with little or no safety net. While many families are scrambling into the middle class and buying cars, others are falling out of the middle class because of business reversals, medical bills or other problems, and are unable to buy replacements for their first car.

This article, by Heiko Khoo, gives a very convincing explanation for the explosion of unrest in Tibet: extreme inequality that is even more acute than the already-insane inequality prevailing in China generally, which is itself driven by China’s descent into the free market.
Both the Chinese and western governments seem to be making the Dalai Lama the central issue, thereby avoiding the main problem, which neither wishes to face.
Here’s a snippet from the article (I believe Heiko Khoo is a researcher for Amnesty):

The ‘average wage’ in China’s cities as a whole is 14,000 Yuan a year, (US$1800) but wages in Tibet are nearly double the average, higher than in Shanghai and second only to Beijing. State sector employment accounts for nearly 94 percent of employment in Tibet as opposed to 66 percent in China’s cities on average.

The problem is that such relatively well-paid state employment is disproportionately allocated to people of ethnic Chinese backgrounds. Higher wages are justified on the basis that living in Tibet takes you far from family and friends and often causes serious health problems due to the effects of high altitude. Tibetans, whose skills are generally lower than the ethnic Chinese migrants, look on them as a deliberately privileged layer.

Alongside the influx of state employees, engaged in administration and infrastructure projects, has come an influx of ethnic Chinese traders and to a lesser extent Hui Muslims, whose businesses thrive on the high spending power of state employees and tourists. Their nationwide networks mean Tibetans can’t compete with them. The boom in Tibet has encouraged all manner of migrant entrepreneurs to open shop, including beggars’ rackets and sex workers. Tibetans often think they too are subsidized by Beijing. Thus it is easy to see wherein the roots of ethnic discontent lie.

All over China the wage levels of workers have not risen in line with the economic boom. Under pressure from the army of migrant workers and the rapaciousness of private sector employers, wages for many have been frozen. According to the All China Federation of Trade Unions (ACFTU) 26% of China’s workers have not received a pay rise for five years despite the economy growing at an average of 10.6%. Profits have been boosted not only by new machinery and work methods but also by holding down wages. The ratio of overall labour costs to GDP has fallen from 53.4 percent in 1990 to only 41.4 percent in 2005.

Given that so much of what constitutes the western lifestyle is now manufactured in China (i.e. made possible by China’s inequality) it seems inadequate to focus on western inequality alone.

On Wednesday’s Nightwaves (BBC Radio 3) there was a fascinating discussion about Malthus and current anxieties of various kinds about “today’s crowded world” and the possibility that “the population of poor countries alone will rise by almost three billion in the next 30 years” (and what should “we” do about this?)

Some very refreshing contributions came from Matthew Connelly, a historian from Columbia University – for example:

If the world’s food resources were distributed fairly there would be about 4 pounds of food per person, “including 1 lb of meat and dairy products, which would make most of us fat”.

… and:

“If the problem is consumption, then of course it’s the *wealthiest* people we need fewer of.”

Connelly has a new book out:

Fatal Misconception: the struggle to control world population;
Matthew Connelly; Harvard University Press 2008

For a free sample chapter, see:


Here’s a snippet from the programme that I liked so much, I laboriously transcribed it via the Listen Again facility:

“Too often, alas, population projections are *psychological* projections … not that there are too many people but that there certain *kinds* of people, with whom we feel uncomfortable, who there are too many of. So when people say the US or the UK for that matter is overpopulated I want to ask them which people in particular they have in mind, who are in and of themselves a problem?

“If the problem is consumption, then of course it’s the *wealthiest* people we need fewer of. I mean, Britain would do much better if it had 100 million subsistence farmers, say, than 50 million people who are doctors and lawyers and bankers and so on. It could have much less of a carbon footprint if it imported subsistence farmers from the Sahel, and exported bankers and lawyers to Africa. But nobody is proposing that.”

You can hear whole program on line till next Wednesday, here:


This was in response to a discussion of the “are we innately predisposed to be nasty, hierarchical animals, or nice egalitarian ones?” question; in particular, the work of Jim Sidanius and Felicia Pratto on Social Dominance Theory:

<http: en.wikipedia.org=”” wiki=”” social_dominance_theory=””>http://en.wikipedia.org/wiki/Social_Dominance_Theory

<http: en.wikipedia.org=”” wiki=”” social_dominance_orientation=””>http://en.wikipedia.org/wiki/Social_dominance_orientation

According to Christopher Boehm, in his book Hierarchy in the Forest: the evolution of egalitarian behaviour. (Harvard 1999) the answer to this question is “Yes”. Humans are neither nice egalitarians nor nasty Hobbesian despots, but both – and that is the secret of our success, as what we might call a “militantly egalitarian” species.

Humans have a *capacity* for forming dominance hierarchies, as other primates do, but have evolved very good counter-dominance strategies for cutting upstarts down to size – which accounts for the overwhelmingly egalitarian nature of hunter-gatherer and most tribal societies. i.e., human egalitarianism is a highly dynamic affair, in which a very high value is placed on individual autonomy. People who might become upstarts are cut down to size by a whole range of techniques ranging from pleasant mockery to ostracism to (as a very last resort) homicide. People of exceptional ability or strength, who have the potential to become upstarts, are at pains (unless they are psychopaths) to pre-empt criticism by practising self-deprecating humour and modesty (lest they be thought boastful, etc).

Boehm reckons that (apart from the last couple of thousand years) humans have been so effective at maintaining equality that natural selection may even have had time to make this predisposition part of our genetic makeup. But whether it is genetic or not, egalitarianism is something humans do very well – until they fall under the control of invincible despots from whom they cannot escape. At which point Paul Gilbert’s work on depression (The Evolution of Powerlessness) becomes very relevant, I think. Gilbert and Wilkinson ought to get together to discuss this – both have offices at Nottingham University after all.

I recommend Boehm’s book very strongly indeed. Also (but from a quite different angle) Robert Axelrod’s The Evolution of Co-operation (Basic Books, 1984).

After reading Boehm, I suddenly saw my late father in a new light. He went through WWII without rising above the rank of temporary lance-corporal despite being a very capable, intelligent man with a good university degree. He declined promotion partly because he hated the officers, but also because he felt the other men would resent his elevation, and make his life a misery. This, I think, was an example of a human society functioning well, despite the unpromising circumstances (and maybe it was what got them through).

But do read Boehm. Worth it.

PS – On the environmental impacts of inequality: In his book Feast: why humans share food (OUP 2007) Martin Jones says that the onset of hierarchical societies in the Bronze Age coincides with first signs of environmental degradation due to human activities. This was also the period when humans became shorter and unhealthier: “An average bronze age male farmer from the eastern mediterranean would stand 167cm (5’6″): 6cm shorter than his ruler, and 10cm shorter than his hunting ancestors.” (p248)