Status Poverty: The Poor get Unhappier

Lots for the machine this morning, so instead of opting for the obvious (though interesting) headline, I've decided to pick up on John Hutton's appeal to celebrate richness. Or, to be precise, "celebrate the fact that people can be enormously wealthy in this country".

Where, or where to begin? Such overtly controversial comments can't be simply a case of getting a little tiddly down the local boozer and then standing on a garden wall shouting whatever John really feels in his heart of hearts. He has something to say, some substance here. Which is probably why the language is so carefully defined in this case, rather than the usual vaguaries of idealist rhetoric:

"It is statistically possible to have a society where no child lives in a family whose income is below the poverty line - 60% of median average income - but where there are also people at the top who are very wealthy."

See that bit in the middle, separated by hyphens that will probably summon hand-wavery when said out loud? That's stats that is. Median average income, meeedian. That is, the average by rank, not your usual mean average which you get by adding everything together and dividing by X.

No, median average is unaffected so long as the order of richness doesn't change. Let's say out of a group of 10 people, you're the 6th richest - a decent number as it matches the 60% quoted above. Now, according to John, statistically speaking, you're still not poor, even if the 5 people above you suddenly all win the lottery together, sharing 50 million Euros between them. In other words, it's not the actual richness which is defining poverty, it's only how many people are richer than you.

Now, to my tiny economist brain (situated just behind my left ear, no bigger than a 5 pence piece), this is a bit odd. This is basically saying that poverty is based on status rather than what you can afford. For status is based on social ranking (which, it turns out, is based on how many limos you can afford a month), while actually buying things is based on how much money is floating around the system. Get that difference? How many people earn more than you, vs how much cash those people are spending. (By way of example - if people are prepared to pay more for houses, that pushes the price up, and I can't afford a house as much without upping my income. It doesn't actually matter if it's 1 person or 10 million that are buying all the houses in the first place though.)

Status poverty. Actual poverty.

Defining Status Poverty

This is good stuff though, from a Machinery POV. Maybe John is right when he says that we need "to recognise that aspiration and ambition are natural human emotions". This is true. Aspiration and ambition are omnipresent*. Look around, and we can see that modern day culture is defined, in many corners, by status rather than the self. By our comparison with others, rather than our own level of self-esteem. Owning things is seen as status - owning hard-to-get things especially. Status and jealousy and ambition and pride.

If we start looking at things from a status perspective, things change. Up til now, we've been talking two different purposes, a (probably deliberate) arena of muddy ideas and cross-wired principles. Poverty is not usually thought of as status, and so the conversation suffers from amibiguity and double-loading of the term.

But when we adopt a status-led stance, all of a sudden we're not talking cross purposes any more, as John does. We can see "status" as a thing, just like money is a thing. We can theorise that "celebritydom" is one form of ultimate status, for example. It doesn't matter that many famous people get screwed over and could probably make much more money than they do. What matters is the image of richness, the big house, the fast car, the all-night narcotic-soaked drunken orgies. This is status, and it's more powerful, more alluring than just cold hard cash. Cash is but a gateway drug to a lifestyle.

But here's the trap. Once we start turning status into a "thing", can we say that a median average is the right way to measure poverty in this thing any more? Or is an ambition for status - the answer for the individual, apparently, to escaping poverty - fueled by the excesses and the luxury that we perceive? Can we actually say that status is relative not to how many people are "better off" than us, but by how much better off they are?

I say yes, we can. I say we must do, because our ambitions are clearly not pumped up and inspired by statistical figures in spreadsheets. Our ambitions and our dreams are inspired by others, by the idea of others and by the illusion of others. In other words, in this age of "equality", what we think we are entitled to is defined by what we see others as having. And it only takes 1 person to have something for us to then want it too.

I am fundamentally connected to Bill Gates

Of course, this opens up the "holes" in Hutton's argument. If we have more rich people, more billionaires, then how does that affect the rest of us? Hutton seems to think that these parts of society are at such opposite extremes that this isn't a problem. The idea that there is "freedom to get rich" severs the ties identified above. Hutton wants to sever them in one direction, and let people get richer. But he fails to take into account the converse: that as some people get more rich/famous, those "left behind" will not be blind to this - in terms of both status and actual poverty. The idea that we need people to "be the authors of their own lives" assumes the same fundamental concept - that people are individuals. But who can really look at society and say that we do not compare ourselves to those around us, or to those we see on TV?

Status Poverty is real. It manifests not as being unable to afford things, but as being unable to live your own life. It leads to depression, anger, and a lack of confidence in one's self, because the self becomes constantly defined purely in terms of others. The result is wishing we were someone else, until the day we die. Status and happiness contentment are inherently linked, and John Hutton should be ashamed for trying to fool the rest of us into continuing to fool ourselves otherwise.


* Although, I've noticed, generally more so in insecure men than others, but that's a different tale for a different day.