Last post was about the psychology of debt, and it ended with some open questions. Well, this time around some more empirically not-so-well founded considerations are due.
Starting point: a lot of human activity revolves around social groups. The animal instincts in us dictate that status is inherently a big thing in every group. Now, status can be defined in many ways: money, fancy cars, number of journal citations, points scored in matches, pretty much anything – even lack of any of the previous qualities. Our instincts are in that sense malleable that we can adapt to a variety of circumstances.
Now then, with materialism being the dominant “religion” in our society, it’s no surprise that matter – money, possessions, or anything that correlates with possessing lots of money – is also perhaps the most dominant determinant in one’s social status. All this is hardly very controversial.
How can one earn a lot of money, and status, then? Well, inheritance is one way, but to leave that aside, anything else means working – and succeeding – at something. Again, it doesn’t really matter what it is, it can be pretty much anything of the carious human activities. How does one succeed, then? Well, to paraphrase Titius Maccius Plautus, “you must spend money to earn money”.
And here comes the controversial part: I believe a lot of consumer credit and debt is about wanting to earn status amongst one’s peers. Why do you take a mortgage? An economist would probably say that because it’s cheaper than renting. What really is going on is that you take the mortgage because everybody else has a fancy house, too.
If this is the case, couldn't it well be that our ever increasing debts have something to do with this consumerist fighting over status? Debt before dishonor, in a way. And if so, is there anything we can do about it?