High-status opinions vs luxury beliefs: the economics of the “Great Awokening”

A friendly critique of Rob Henderson’s theory of “luxury beliefs”

In April 2014, I wrote an article on the economics of woke. I did not use that word yet: I still used the now quaint-sounding term “political correctness”, which has since largely fallen out of use. But I predicted that what we now call “woke” was going to get a lot worse.

And so it did. As Prof Michael Clune from Case Western Reserve University points out in The Chronicle of Higher Education:

“Starting around 2014, many disciplines […] changed their mission. Professors began to see the traditional values and methods of their fields […] as complicit in histories of oppression. As a result, many professors and fields began to reframe their work as a kind of political activism.”

Indeed. I just had a look at Google Books Ngram Viewer, to check the relative frequency with which certain terms typically associated with woke ideology appear in the literature, and how this has changed over time. Since 2014, the use of the term “white privilege” has almost doubled, while the use of “white supremacy”, “islamophobia”, “transphobia” and “intersectionality” has more than doubled. Use of the trendy term “Racial Capitalism” has increased sevenfold, and “white fragility”, the title of the bestselling book by Robin DiAngelo (2018), has increased twentyfold. Curiously, the use of the term “racism” has “only” increased one-and-a-half-fold, although from an already much higher base. Other people have found similar results (see here and here).

My argument in 2014 was that woke beliefs had become what economists call “positional goods”, and which, in everyday language, we call “status symbols”: goods which people use in order to signal a high standing in a social hierarchy. The displaying of positional goods is what economists call “conspicuous consumption”, and which normal people call “showing off”.

My argument was that conspicuous consumption did not have to involve the display of physical goods:  the flaunting of high-status opinions could be just as much a form of conspicuous consumption as the flaunting of Rolex watches. On that basis, I predicted an accelerating status-signalling arms race, in which people would try to out-woke each other in a competitive display of high-status opinions. This has happened, in the form of what we now call “the Great Awokening”.  

In the meantime, a related, but not identical explanation for the Great Awokening has been making the rounds: Rob Henderson’s theory of “luxury beliefs”. Rob is a great writer, and I highly recommend his Substack. We are clearly on the same side of the argument, and what I’m doing here is admittedly an example of the vanity of small differences. Nonetheless, I believe that my version of the argument is better fit for the Great Awokening than Rob’s.

Rob’s argument goes as follows:

In the past, members of the upper classes used to display their status via luxury goods. However, nowadays, crass materialism is considered vulgar. The only people who still do that are gangster rappers, oil sheiks, Russian oligarchs, and Donald Trump. So today, the elites signal their status via luxury beliefs rather than luxury goods. A luxury belief is a belief that confers a high social status on the person expressing it, but which, if it becomes actual policy or social norm, would have a terrible impact on the poor. The best example is the fashionable slogan “Defund the Police”. Where enacted as a policy, it predictably leads to an explosion of crime, with low-income neighbourhoods particularly badly affected. But the people advocating it don’t have to worry about it. They are largely insulated from the impact of the terrible ideas they inflict on everyone else.

Some of Rob’s critics have pointed out a flaw in his theory: it does not fit the survey evidence very well. Let’s stick with the “Defund the Police” example. It is true that support for that position is positively correlated with income: rich people are more likely to support it than poor people. But the correlation is not especially strong, so if it is supposed to be a signal of wealth, it is not a very reliable one. Worse, most of the correlation is explained by the gap between people at the bottom and people in the middle of the income distribution. That is the opposite of what you want from a good status symbol. Rich people are not usually mistaken for poor people, so they do not need to specifically differentiate themselves from the poor. They might, however, be mistaken for middle-class people, and the very rich might be mistaken for the moderately rich. So that is the role of the status symbol: to highlight the difference between yourself, and those you might plausibly be mistaken for.

A much better predictor of whether you support defunding the police is self-professed political orientation: the further to the Left you are, the more likely you are to support that view. That predictor also has the feature I’ve just mentioned: it allows very left-wing people to differentiate themselves from those they might plausibly be mistaken for, namely moderates, and people on the less radical Left.

In a different context, Eric Kaufman finds a very similar pattern. When it comes to support for woke positions, the biggest gap is not between right-wingers and centrists, or even between centrists and the moderate Left. It is between the moderate Left and the radical Left. This makes sense. If you are a woke culture warrior, it is unlikely that people will mistake you for a Daily Mail reader, or for a fan of Nigel Farage. They might, however, mistake you for a bog-standard BBC-watching progressive, so that is the difference you want to highlight.

These survey findings are not kind to Rob’s “luxury beliefs” proposition. They are, however, very easily compatible with my own pet obsession, which is high-status opinions.  

This is because I never claimed that people who hold high-status opinions are particularly rich. More, I never made any claims whatsoever about their economic position. Because I don’t need to. When I say that the purpose of these opinions is to signal a high social status, it is not an economic status that I’m talking about.

Rob’s mistake is that he thinks “status” means “money”. He thinks “being high-status” means “being rich”. Whereas I’m saying that it doesn’t anymore, or at least, that it doesn’t have to. 

There are different status hierarchies for different attributes, most of which have nothing to do with money.

An Olympic medal is a status symbol. It marks you out as a member of an elite – but that is an athletic elite, not a financial one. You can be poor, and still be a member of the athletic elite.

A military decoration is a status symbol. It marks you out as exceptionally brave, and exceptional loyal to your country. But it does not mark you out as rich.

Academic awards are status symbols. They mark you out as a member of the cognitive elite. But they do not mark you out as rich.

And so on. There is no such thing as “the elite”. There are different elites in different areas of life. The financial elite is just one elite among many. If you want to be a member of the financial elite, you obviously need money. But if you want to be a member of one of the other elites, having money is neither necessary, nor sufficient.

So what are high-status opinions supposed to signal? Elite status, sure, but what kind of an elite is that, if it is not a financial one?

It is a mix of things. Quite clearly, woke progressives see themselves as part of a moral elite. They see themselves as morally superior to other people, and that presumed moral superiority is a big part of what makes woke progressivism so attractive to many people.

But that is, at best, half of the story. If you give lots of money to charitable causes, or spend lots of time volunteering, most people would probably consider you a morally good person, but you will not necessarily be respected in woke circles. Woke people also see themselves as an enlightened elite: they are the ones who are awake to the hidden power structures in society, which less enlightened people are oblivious to. They see themselves as Morpheus from The Matrix.

Being morally good is not enough. You also need to be able to think in systemic terms. If you support charitable causes within the matrix, but you do not challenge the system itself, you are not really helping anyone.

Education and intelligence come into it as well, but only when combined with the above. If you have all the requisite academic titles and degrees, but reach non-progressive conclusions, progressives will still confidently dismiss you as stupid and ignorant. You may be educated on paper, but you are self-evidently not clever enough to realise that they are thinking within the power structures of the matrix. This leads to a somewhat circular reasoning: we hold progressive opinions because we are so highly educated and intelligent, and you can tell how highly educated and intelligent we are from the fact that we hold progressive opinions.

So that is what people who hold high-status opinions are trying to signal. They are not trying to say “Hey, look, we have money”; they are trying to say “Hey, look, we are intelligent, educated, enlightened, and morally superior to you.”

If you want to cast doubt on Rob Henderson’s luxury beliefs proposition, all you have to do is show that the opinions he calls “luxury beliefs” are not strongly correlated with income. What would it take to cast doubt on my alternative proposition?

You would have to show that high-status opinions are not strongly correlated with each other. That the same people who hold high-status opinions in some areas unashamedly hold low-status opinions in other areas. That there is no distinct group of people who hold high-status opinions across the board, but rather, that most people hold some high-status and some low-status opinions. You would have to come across combinations of views such as:

“I think we should decolonise the curriculum [=high-status], but I also think we should build more prisons to lock up violent criminals for longer [=low-status].”

“I think we should pay reparations to our former colonies [=high-status], but I also think Net Zero is a dreadful idea. We’re already doing more than enough on climate change [=low-status].”

“I think transphobia is a massive problem; it’s really vile how the media are whipping up hatred of a vulnerable group [=high-status]. But I also think the alleged problem of Islamophobia is massively overrated; most of what gets labelled “Islamophobic” these days is just legitimate satire or criticism [=low-status].”

“I think Karl Marx was largely right about capitalism; it’s an inherently exploitative system which will eventually collapse, and be replaced by something better [=high-status]. However, the one thing we can’t blame capitalism for is all this diversity nonsense that’s being forced on us [=low-status].”

When was the last time you came across combinations of that sort? My guess is that it’s been a while. High-status opinions usually come as a big package deal. If you express one high-status opinion, I can guess your opinions on almost everything.

And that’s one problem with the tendency of using political opinions as status markers. It’s not just that fashionable opinions are nearly always wrong, it’s also that opinions which come as prepackaged clusters are usually boring and shallow.