The Economy of Esteem

"This is a book by a philosopher and an economist about a topic that was neglected for a very long time in social analysis. So there’s lots about it in the 18th century – Adam Smith and people like that – and it’s about how esteem, which is their word for the respect that you give to people who have achieved things against a certain standard, can be used to motivate people to do good things. How people can be mobilised. What they do is build models about how they actually work and there are graphs of the kind you see in economists’ books , and it’s about how, if you set the rules out right, you can use esteem, the economy of esteem, the system of assigning esteem to people, to do things much more efficiently than money. It’s better than the real economy, that of money, and it’s better than using the fear of punishment. Examples are things like: if you have an up-and-running economy of esteem, then when people do the right thing they get the respect of their friends and neighbours and if they do the wrong thing they get their contempt and disrespect. The great virtue of this is that if people have these attitudes, then the thing is cheap to run because people spontaneously respond in these ways. You don’t have to have courts, which is what you have to have in order to use punishment. You don’t have to have chequebooks and credit cards in order to pay people to do things. Because the thing that they want, the respect of their neighbours, is the natural response of people who are in a social system together. That means we can use esteem to sustain things like philanthropy. It would be self-contradictory to pay someone to give money away and it would be weird to punish someone for not giving their own money away. So, you get the esteem of your neighbours if it is known that that’s what you’ve done. Nobody has to run the system. No, it’s just New York City . In New York City a lot of rich people give away a lot of money and, if you ask why, the natural explanation is that they get the reward of being esteemed. People think better of them, and it’s a striking fact that in New York where the richest people are a thousand times richer than the poorest people there is not a lot of resentment. That is because there is a tradition of the rich supporting the public good. That is the hope, but the best social science studies show that America is much more stratified than everyone thinks and especially now because the gateways to success tend to pass through education, and well-off people can give their kids huge advantages of the sort that are familiar in England but have historically been underplayed here. There is very good evidence that we are much more stratified than we like to think. Nevertheless, because people don’t recognise that, there is a huge amount of optimism among people who in fact have almost no chance of making it. Well, we’ll see."