Tidbits on signaling

First off, Robin Hanson riffs off of Steve Jobs’ 2005 convocation speech, in which he urges graduands to “never settle”:

[D]oing what you love, and never settling until you find it, is a costly signal of your career prospects. Since following this advice tends to go better for really capable people, they pay a smaller price for following it. So endorsing this strategy in a way that makes you more likely to follow it is a way to signal your status.

Will Wilkinson concurs:

“Find what you love and never settle for less” is an excellent recipe for frustration and poverty. “Reconcile yourself to the limits of your talent and temperament and find the most satisfactory compromise between what you love to do and what you need to do feed your children” is rather less stirring, but it’s much better advice.

Wilkinson brings up his art degree in support of Hanson’s thesis, but there’s something else going on here.  When Jobs said “Never settle”, he said it as a wildly successful entrepreneur.  Hanson argues that he was signaling status: “I followed a very risky path, and I came out miles ahead.  Yes, folks, I really am just that good, and if you take my advice — and, incidentally, if you’re as good as I am — you might come out miles ahead as well.”  It just so happens, though, that when Steve Jobs did what he loved he rode the crest of the microcomputer revolution — twice.  When Will earned his BFA, he wasn’t bragging about status he’d already acquired: if anything (simplifying outrageously), he was signaling his confidence that he was a good enough artist that he’d make a living doing what he loved.  And lest you think I’m being a condescending dick, I was doing the same, at least in part, when I started my PhD.  I thought I was going to be a hot-shit researcher.  As it happens, I’m a pretty good researcher — I passed my defence, after all — but not so amazing that Division 1 research universities are showering me with tenure-track faculty offers.

The other reason I did a PhD — and, I presume, the other reason why Will did a BFA, and why so many of the Occupy Wherever protesters did enjoyable but unemployable degrees — was because it was fun.  I was a middle-class white kid with no debts or dependents; I thought I could afford to go off to grad school and fuck around with linear algebra and differential geometry for the better part of a decade.  (As it turns out, I could just barely afford to do so — and we’ll see if that holds up if and when I ever try to retire.)  Was I showing off?  “I’m so high-status that I can afford to spend years of my life, and throw away an enormous amount of potential income, doing something fun!”  Not that I recall.  If anything, I was trying to opt out of the “money” status game in favour of the “intellectualism” status game.

Unfortunately, while one can opt out of the “money” status game, it’s a damn sight harder to get rid of one’s food and rent habits.  Money has a way of catching up with even the most earnest of anti-materialists, as Megan McArdle points out:

Take all the pot shots you want at people who thought that a $100,000 BFA was supposed to guarantee them a great job–beneath the occasionally grating entitlement is the visceral terror of someone in a bad place who doesn’t know what to do.  Having found myself in the same place ten years ago, I can’t bring myself to sneer.  No matter how inflated your expectations may have been, it is no joke to have your confidence that you can support yourself ripped away, and replaced with the horrifying realization that you don’t really understand what the rules are.  Yes, even if you have a nose ring.

This story suggests that “not settling” and doing that BA in Early Medieval Postmodernist Philosophy might not have been signaling status (“Most of my classmates are going to end up working at Starbucks, but I’m going to revolutionize the field and get a named chair at Cambridge!”) or signaling meta-status (“I have so much contempt for money-signaling that I’m committing every inch of my future to academics-signaling”), but rather a misapprehension of “the rules” (“What’s the big deal?  I go to college, I get a Bachelor’s degree, travel around Europe for a summer, and then get a job, right?”).  That’s not such a different story than that of the steelworker — or middle manager — who gets a job with a big company in the ’70s and expects to have it until he retires, just like his dad.  For that matter, it’s not such a different story than that of the French military planner who looks at the well-fortified German trenches around the Somme and decides to build something similar — but bigger — at the Franco-German border.  Most of us prepare to fight the last war.

Speaking of the “other 99%” and Occupy Wherever, John Barro does some math and discovers that:

The 99th percentile of Americans, by income, starts with households earning incomes of $593,000. The “We Are the 99 percent” branding puts somebody making $500,000 per year on the oppressed-and-downtrodden side of the wage divide. Indeed, “99 percent” is so expansive a designation that it includes most of the bankers working on Wall Street.

One way to read this is to shake one’s head in awestruck horror and think “Man, income inequality is so bad in this country that even Wall Street bankers are getting left behind!”  Another, which I favour, is “Holy fuck, over three million Americans earn six hundred kilobucks a year!  That is a damn lot of people!”

Precisely what point that last paragraph signals is left as an exercise for the interested reader.


7 Responses to “Tidbits on signaling”

  1. 1 perlhaqr
    October 7, 2011 at 08:35

    I haven’t actually run the numbers yet, so this is all completely out of my ass, but thinking of my dad’s stories of touring Zimbabwe playing guitar in Mapfumo’s band, and of other friends who have been places where “poor” really means something (unlike almost anywhere in America) I wonder if “we” (America) are the 1% wealth earners compared to, say, Bantuville, SA. I think a lot of the people who are protesting their “living on crumbs” have absolutely no fucking clue what “poor” really means.

    • October 7, 2011 at 11:24

      I think a lot of the people who are protesting their “living on crumbs” have absolutely no fucking clue what “poor” really means.

      I like Megan’s interpretation: these are mostly people who thought they had “the rules” figured out, and have just had the carpet yanked out from under them. They’re not going to be starving in the streets any time soon, but their short-term prospects have dropped like homesick rocks from an imagined comfortable and satisfying position somewhere in the “real world” to another five years of the same crappy coffee-shop job they worked during summers in college. Eating Hamburger Helper and off-brand ramen isn’t exactly scrabbling in the dust for cicadas, but if you expected — and were encouraged to expect — sous vide filet mignon it sucks pretty hard.

      I see the Occupy Wherever protests as a left-wing version of the Tea Party protests, so far at least. There’s no real centralized leadership or agenda; the tone of the argument is massively populist anger; a handful of opportunists are trying to ride the protests to power; and they have some pretty good points about “too big to fail” and regulatory capture amidst a sea of generic wharrgarbl.

  2. 3 TMI
    October 7, 2011 at 09:53

    Second that, perlhaqr.

    Me? Post-bac in ’83, do the math. Getting the cash to finish was a problem, found a job, and now own my own business. People don’t refer to me as Doctor, or Professor, but what the hay. No matter where you are, there you are, and the choices you make in relation to where you are, versus where you think you should be, are the choices that make the difference, in my opinion.

    We brings me to a comment made by the President yesterday. “…that folks who are working hard every single day, getting up, going to the job, loyal to their companies, that that used to be the essence of the American Dream.”

    Uh, sorry Sir?

    I’m a horrible employee. My rule of thumb has been, if you’ll pay me more, and ask me to do less, I’ll go to work for you. Which led me to owning my own business, since I’m the best manager I know. Do you have any idea what it means to be loyal to a bunch of dicks? How many small businesses rely upon family connections for advancement? I’ve worked for a couple of Very Large Northwest companies, and trust me; blood is thicker than water, but not as thick as some of the heads containing that blood.

    “Loyal to their companies?”

    That’s got to be a talking point for the unionistas, who claim loyalty while they ransack.

    I’ve never settled. And I’ve never been loyal. I’ve done my job, even where that job was to protect the best interests of ownership/capital. Defense of the company’s interests is the primary responsibility of management.

    “That’s not such a different story than that of the steelworker — or middle manager — who gets a job with a big company in the ’70s and expects to have it until he retires, just like his dad.”

    Not the American Dream. Maybe the safety net of the 99’ers.

    • October 7, 2011 at 11:29

      Since when is plodding subservient work-a-day life anywhere near the American Dream? I’d always thought that the American Dream was being successful at something, and maybe owning a Corvette.

      One thing that jumps out at me about the “loyal to their companies” quip is that it puts the onus for success and failure squarely on someone else. Is your company doing well? Doing poorly? That’s someone else’s problem, you just stay loyal and do the work we put in front of you. It’s isomorphic to the statist approach to government: You just pay your taxes and obey the laws, and don’t worry your pretty little head about how we’re running the country.

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