Chimps are Status Obsessed

In my book, the Missing Risk Premium, I argue the fundamental status orientation is why there is no risk premium in general, and why the perverse demand for low volatility assets is not arbitraged away (benchmark risk prevents this).  This explanation is not even acknowledged by most (all?) academics for explaining things like the low volatility anomaly.

Economists assume the main motivator is what can best be defined as greed, while I’m arguing envy is more important. I don’t think it should be this way, that’s a normative issue, I’m just saying that’s how people behave. Indeed, I agree that an economist’s conception of self-interest would be a major improvement: short-sighted selfishness is worse than long-sighted selfishness, but it’s not nearly as destructive as envy. Alas, economists have the standard bias of thinking that everyone thinks as they do. Further, they have the bias that since it would be nicer to think people are not so much envious as rationally self-interested, it has to be true.

Humans have been genetically the same for about 50k years, and only in the past 350 years have we really changed life for your average person. The American Plains Indians had no conception of property rights when Columbus got here, and it highlights a earlier stage of society, more like our chimp cousins and the instincts they bequeathed us. It’s nice to think that hunter-gatherer’s are more peace-loving, and more in tune with the environment, more authentic, etc., when actually they are homicidal, dogmatic, and status obsessed; their lack of greed isn’t a feature, it’s a bug.

It’s good to appeal to higher aspirations, like telling your children they should aspire, not to be great men, but good men, because great men are often insufficiently empathetic. Yet, we shouldn’t presume people are more greedy than envious, which is easy to do because most articulate chimps hide their envy behind altruism, as attacks on the 1% are presumably about wanting less injustice via equity. This is true for some, but I suspect it’s not true for the vast majority, who simply want to knock those on top down closer to their level.

2013-04-01 20:16:40

Source: http://falkenblog.blogspot.com/2013/04/chimps-are-status-obsessed.html