Social logic and status competition

By Shahab Sabahi, Energy and Environment for Development – Policy Research Group

 

Social logic influences humans’ choice for lifestyle. By definition, in society level, people make decisions by using a social logic that is based on norms and the expectations of society. Social logic is enormously swayed by policy choice and the fabrication of the conventional wisdom [The Affluent Society; J.K. Galbraith] which are in the hands of governments, elites or interest groups.

This essay has no intention to elaborate on how rationalists and constructivists see social logic. Rather it argues consequences of using social logic when it manifested in the form of trends, fashions, belief, and particularly in the form of societal status completion. 

For society as a whole, the major benefit of status competition is that continuously raises demands for goods and services. It legitimates the expansion of existing markets and consumption. Furthermore status competition requires the introduction of new goods and services. It, in turn, inspires the supply side of the economy to increase the production and to carry out innovation. Ever-last demand and innovation [creative destructive, J. Schumpeter] are two pillars of a capitalistic economy. Thus, status competition is inevitably essential for perpetuating economic growth.

However there are also disadvantages that arise from status competition, let alone environmental impacts, such as individual’s internal conflict. Status competition may differently affect dominate and subordinate members of society. There is a vast literature on the competition-driven-individual’s stress in the field of biology. Stress, as lab experience reports has testified is a sign that a living object is growing increasingly unfit for the environment in which it lives. A. R. Wallace’s research showed when a living object and its environment are no longer a good match, either should give, and it is always the former.

In long term, the person who exposes to prolonged stress would lose its competition ability. Research shows person who experiences stresses or radical changes has large chance to hold high level of cortisol in its body at the cost of reduction in testosterone. Cortisol is a chemical inside bodies that is released in response to stressful events, while testosterone is essential steroid for boosting competition (research articles in Social psychology field).

According to the above argument, eventually status competition washes away its earlier economic benefits and leaves behind an ineffective consumption-centered society.

Perhaps social logic should influence individual’s decision towards a higher quality, instead of status, competition.   

Capital, Energy and Capitalism

By Shahab Sabahi, Energy and Environment for Development – Policy Research Group

The emergence of capitalism in human history was a natural event and, just like other large scale natural events, it had positive and negative side-effect. How did this evolutionary process set in? How did the discovery of fossil energy amplify this process? What might put the growth of the process in standstill or derail the process’s prevailing trajectory?
Modern society no longer needs human slaves or a social organization based on distinct classes. Investments in useful energy instead of human and land investments has been the key to modern capitalist society. Substituting capital for human activity makes it possible to maintain a certain pattern of growth in modern society, in which only a tiny fraction of human activity is invested in those specialized compartments generating surplus. In modern society, physical capital that powered by fossil energy have taken the place of humans in preindustrial society. Fossil energy provides an extraordinary power level controlled by humans that has dramatically reduced overhead costs of generation.  By continuously accumulating capital, developed societies managed to lift the constraints that previously prevented the decoupling of economic growth from investments of human-energy-centered supply activities.

The continuous increase in capitalization to ease the biophysical limitation never arrived to crash against the existence of an external constraint. By adoption of fossil energy used by the growing capital supported the strategy of continuously lifting internal constraints on the energy input supply [M. Giampietro and K. Mayumi]. The abundant availability and accessibility of fossil energy removed the historical external constraints that is, the impossibility of expanding capital, that used to be colonized land, as much as necessary and permitted humans to control quantities of energy unthinkable in preindustrial times. The move from land-tied energy inputs to fossil energy opened up the era of exploitation of concentrated flows of energy carriers. But, what would be the next possible stage, when there would be no possibility of taking advantage of accumulated capital. History tells, an analogous, all empires initially organized effective and powerful army but reached at a point either internal capability diminished to a point that no longer could handle the empire power level or no more small realms left to conquer. Internal capability of system or external constraints brings the system to a point that no incentive exists for building up or expanding capital. The bottleneck faced to get a larger capability is to guarantee achieving a larger power level. The larger power level leads to the more capital accumulation, and it implies the more quality concentrated energy source should be used.

It was the extraordinary strength of concentrated energy in the form of fossil energy that makes it possible to successfully implement the ideological imperatives of maximization of profit and perpetual growth. The acceptance of this ideology translated into a powerful and simple strategy “survival of the fittest” [A. Lotka].  

Societies that were faster in accumulating capital and securing the flow of energy have won the battle for control over more energy. In fact they could generate more useful work, and approach to higher power level. As a consequence, they were able to use more resources than others. There is nothing fundamentally wrong with this strategy. As a matter of fact it represents exactly the series of event expected in the evolution of living systems.

 Perhaps in future, the story of mutual success for accumulating capital and fossil energy-oriented growth would reach to its end. Though now, voices for the risk of climate change and exploitation of natural resources are widely ignored, a bitter competition on securing the supply of fossil energy is ongoing and it will strain supply-demand balance of these crucial treasures for capitalism. The competition will pose an external constraint for fossil fuel supply (scarcity goes higher), and it will get more hostile when adding the fact that nations are confined in their own ability of diplomacy to get cheap energy.

Governments with Visions in Conflict

By Shahab Sabahi – Energy and Environment for Development – Research Group

One of the principal roles of government is to ensure that long term public goods are not undermined by short term private interests. Governments also desire to protect social justice, and sometimes at least rhetorically ecosystem. Further, governments are bound to the pursuit of economic growth.

To drive the latter task, governments ought to, as the conventional macroeconomic wisdom urges, be so active in championing the pursuit of unbounded consumer freedom, often elevating consumer sovereignty above social goals and actively encouraging the expansion of the market even if it is necessary, in private areas of individuals. Contrary, the first two roles require governments intervene, either implicitly or explicitly, to protect common goods from spread of the market and guarantee the redistribution of wealth.

There is a real sense of policy-goals competition. Under prevailing political economic logic, it is clear that for stabilizing the macroeconomics, economic growth is indispensable. Governments, therefore, are bound to prioritize economic growth, even with compromising other goals.

It means, since the consumption expansion, spending extension, and depleting natural resources assure the social stability, governments never take serious measures to encourage society-wide savings, support small community-based businesses, and never intervene to stop exploitation of natural resources (by the way,  governments love to fund researches on sustainable development).  They simply say “people can spend more, so they would be happy, won’t they?”  

Are you happy?