Arnold Kling tries to explain why economic motivations are worthy because they compare so favorably to status motivations:

I suspect that the most likely alternative to economic motivation is a worse motive: status-seeking. I believe that is more important to curb our lust for status than our lust for goods and services.

The drive for economic gain helps the individual, and, as Adam Smith famously showed, helps others. Trade and economic growth are positive-sum games, in which there can be winners without losers. Moreover, when people seek economic gains, this is usually transparent. You usually understand when you and others you transact with are trying to improve your economic well-being.

Status, on the other hand, is typically a zero-sum game, in which one person's gain comes at the expense of others. Adding to the evils of status-seeking is that people often deceive themselves and others into believing that they are doing something for a higher motive when in fact they are seeking status.

It's an interesting idea, but I believe he understates the large overlap between the two. Though he acknowledges that some people use their money for status, I would say instead that once you move beyond a certain point economically, money is viewed primarily as an engine to achieve status. Kling rejects Maslow's hierarchy of needs in favor of four co-equal drives:

1. economic, the self-interested calculator
2. empathic, desiring close personal relationships based on understanding and empathy
3. "higher calling," trying to live a meaningful life
4. status-seeking, focused on membership and role within a well-defined group

This is where I'm really on a different page. I view economics (and, to a lesser extent, empathy and calling) as a means to the ends of status. After basic needs are met (and my hierarchial view I guess puts me more with Maslow than Kling) more money goes towards status than anything else. The search for status may be nicer clothes of a squeaky-clean Hummer, or even the latest and greatest stereo setup. Some people need Hummers and nice clothes and get a lot of mileage out of technology (so says the computer guy), but a lot of people seem to buy these things in autopilot.

Kling, to his credit, acknowledges this, but he seems to associate such spending as "higher calling" rather than economy-driven:

Sometimes, people will do good deeds as a way of enhancing their status. However, in my view, that phenomenon is overshadowed by the harmful behavior that status-seeking induces. Examples include avoiding learning for fear of "acting white," joining cults and violent gangs, wasting money on status symbols (again, the Bar Mitzvah comes to mind, with the lavishness of the celebrations ratcheting up each decade), and seeking political power over others.

This is not incidental, in my view, towards an economic thinking of the world. Economically, where should excess money go? In self-interest, they should go in favor of what makes the person the happiest. The problem is that almost universally, comparing favorably to peers brings happiness. Temporary, fleeting, zero-sum happiness, but happiness nonetheless. The distinction between status and economics completely breaks down when they start feeding off one another.

And this stuff does matter. Perception is important. If I go out and buy a suit for a job interview, that may be in my best interest, but it's also a status thing because I'm doing so in order not to compare unfavorably to the next interviewee. Buying a house in a posh neighborhood and even getting my kid in to a good school may be status-oriented, but they also increase the chance of success, which will then allow them to play the status game. It's not so easy to tell where one ends and the other begins.

We don't live in a void where we make these decisions independent of everyone else, as Kling would like us to, precisely because economics and status feed off one another so ferociously.

Even Kling himself gets the distinction confused:

The November 2005 issue of The Atlantic Monthly has several articles that show the status-seeking side of academia at work. An article by Matthew Quirk is particularly eye-opening.

"enrollment managers direct financial aid to students who will increase a school's revenues and rankings. They have a host of ugly tactics to deter low-income students and to extract as much money as possible from each entering class."

If government gave its financial aid directly to poor students, in the form of vouchers, then those students would have leverage with respect to colleges and universities. Instead, it is the other way around.

Another way that academic status-seeking behavior harms low-income students is the denial of accreditation. Colleges and universities use their ability to deny credit for work at other institutions in order to stifle competition and to maintain their own status. Instead of testing a student to see whether a subject has been learned satisfactorily, institutions simply refuse to accept credits from "inferior" sources of education. This status-oriented approach to accreditation pits traditional colleges and universities against the newer "for-profit" model of education, as described in a front-page story in the Wall Street Journal on September 30.

How exactly is it that universities trying to attract the wealthiest students and deter the low-income students not a self-interested, economic one? And further, I would argue that the accreditation denial is at least partially economic as well because it means the students will have to spend more money to take more classes. The actions are dishonorable either way, and I agree with Kling on vouchers as a whole, but it undermines his larger argument, in my view, in demonstrating why moral direction is important and how economics and status-seeking work against everybody.