David Friedman and Will Wilkinson recently blogged about status. One of the complaints about our materialist society is that people earn money for status, not for what they need thus making them less happy. Status is a zero sum game so Tom's gain is Dick's loss. Hence government should force people to work less, everyone will be happier (insert example of trees all agreeing not to go so tall fighting to get more sun).
I'm not arguing that there isn't something to this, but status simply isn't zero sum in the way implied. The argument above assumes that money is the only thing determining status but it isn't. Money status is zero sum, but there are an indefinite number of different status hierarchies. There's one for blogging, one for Quake, one for performers at the Grahamstown festival and on and on. Money has nothing to do with the status involved in these activities and there are lots of them.
One response is that there is another hierarchy for different activities. The World of Warcraft champion is lower status than Brad Pitt and he probably knows it. If we're back to one big status game we have the same problem.
But people are not all that rational. Most people overestimate how good looking they are and how smart. Sure, Brad Pitt has it better, but they're still above average. Same probably happens to the World of Warcraft champ; he will likely overestimate the status he has gained and so will all the other Warcraft players. But if he enjoys this status, then it is real status!
But there is more to it than that. Remember those boring domains (semiotic domains to be a pons)? Well, when you're being inducted to the domain, you're not just learning skills; you're learning a new value system. You don't know what?s good or bad till you become a part of it. The domain doesn?t just teach you how it also encourages you to think of certain things as desirable that you may not have thought before. So, most people are usually completely oblivious of the status conferred by these other domains. They might think it's totally weird or even hilarious, but they just don't get it. We don't need to be irrational to believe there are independent status hierarchies. Most of the characters in Fight Club were nobodies with crap jobs before fight club came along.
Why care? Because it's better to have a society with lots of different clubs and organizations and where people choose what they like and value than one where people are forced to do things that others have told them. Socialist societies fetishise material equality and dictate what people will do with their lives determining what is valued, resulting in one big zero sum status game.