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The imprint of the competition for mates and status can be seen in the past and present shape of our economy.
Each mating season, the bowerbirds of Australia and New Guinea display and strut in front of their elaborately constructed bowers. Male bowerbirds invest significant time and effort to build these structures out of sticks and decorate them with brightly coloured objects. They then use the bower to attract a mate.
Like bowerbirds, we often expend significant effort and resources in the competition for mates and higher status. Despite the average household size falling from 3.6 to 2.6 people, the floor area of the average new Australian dwelling has increased from less than 1 50 m2 to more than 200 m2 over the past 40 years. We equip our houses with expensive coffee machines, our clothes reflect the latest trends and, despite its poor handling and petrolguzzling tendencies, the first release of the Hummer H3 sold out within 3 months.
This competition for mates and status has important economic effects. Buying a more expensive suit, a larger house or a Hummer H3 results in economic activity. First, there is the increased work effort to acquire the resources to make the purchase. Then there is the purchase itself If we only had the instinct of survival and did not worry about where we sat in the pecking order, our consumption choices and the economic landscape would look very different.
Conspicuous Waste
Whether we are seeking mates, the best car or a larger house than our neighbours', competition for rank is relative. There can only ever be 10% of the population in the top 10% of the population. Cornell University economist Robert Frank suggests that this competition leads to a wasteful "arms race" as each person tries to improve their relative position compared with others.
Frank points to the case of a job interview. "Looking good is an inherently relative concept," says Frank. "If other candidates spend more on suits, you must spend more as well, or else surfer lower odds of getting a callback. The rub is that when everyone spends more on suits, the job goes to the same candidate as before."
Waste is central to this competition. In 1899, the economist Thorstein Veblen,...