The Political Economy of Status
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The Political Economy of Status

Superstars, Markets and Culture Change

Theodore Koutsobinas

In this timely book Theodore Koutsobinas explores the system of status markets and their social effects including inequality. He explains how media fascination with superstars and luxury consumption goods amplify positional concerns for all, distort the aspirations of the middle class and cause relative deprivation. Building on themes first identified by Veblen and Galbraith, Koutsobinas analyses extensively the behavioural evidence from modern interdisciplinary research and contributes constructively to a new genre of economic analysis. The Political Economy of Status compels us to consider seriously redistributive culture change policies targeted to assist the underprivileged. This book will be a valuable and lively reading resource for academics in various fields including economic theory, political economy, sociology, social psychology and cultural studies.
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Chapter 8: Alternative policies for positional activities

Theodore Koutsobinas


It is now time to consolidate the analysis conducted in the previous chapters through the application of the interdisciplinary socio-economic approach on status and superstar markets. In what follows, I will discuss in what manner policy formulation can identify alternative types of intervention. A specific issue that will be addressed in this chapter is the political debate which concerns the effectiveness of each category of social policy measures. This review will highlight the benefits and the difficulties of each set of policy measures. It will also aid in examining the possibility of applying a mixed set of policies. A basic theme in the present study refers to whether redistributive rather than general horizontal policies are more effective in mitigating most of the social costs of positional activities. To the extent that redistributive policies are necessary, a fundamental task is to identify the social fields, in which this type of policy will eventually prove successful. Despite the fact that positional markets involve high social costs we should not ignore that there are benefits as well. For example, status-seeking has important implications in financial decisions because individuals with a stronger incentive for social status to improve their capacity for wealth creation are more willing to accept increased levels of capital investment. Thus the desire to participate in relative position competition can increase endogenous long-run growth although its impact may prove to be small.

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