On Social Hierarchies | Alex Danco on Infinite Loops Podcast with Jim O’Shaughnessy

Check out Infinite Loops Podcast Episode Page & Show Notes

Key Takeaways

  • “There’s this general idea that’s familiar, which is poor people buy status, rich people buy time, which becomes the status”Alex Danco
    • Breastfeeding is the cheapest option for feeding a newborn but at the same time it’s incredibly expensive because it costs you your time
  • Sometimes people get competitive with each other to exhibit status.
    • They do it through proxies. For example, parents use their children
    • This kind of status signaling intensifies as children go through high school
  • Canada does not have the concept of Ivy League, but they have the concept of good schools
  • There is still pressure to get into the best schools in Canada but less so than in the US
    • “…college is now not about the four years of college, it’s about the 15 years you spend preparing to get into college. Once you’re there, it’s over”Alex Danco
  • COVID accelerated the move to the digital world. Jim calls this the great reshuffle
    • People no longer have to move to get a job, the idea of the old-style CV will change
  • The long term impact of covid will be heterogeneous- different outcomes for different countries

Books Mentioned

Intro

  • Alex Danco (@Alex_Danco) offers fresh thinking and provocative takes on the innovation economy
    • Check Alex’s website to read his amazing essays
  • This is a chat between Alex and Jim on the Infinite Loops podcast. The discussion beings with Jim explaining the origin of the phrase “pecking order” and the systems of social organization in everyday life
  • Host – Jim O’Shaughnessy (@jposhaughnessy)

The Pecking Order Theory

  • The term pecking order was coined by the Norwegian zoologist Thorleif Schjelderup-Ebbe
    • He was obsessed with chickens and studied their behavior in his family’s country retreat outside of Oslo
    • What he discovered were hierarchies among chickens and how the power structure operates between them
    • Every chicken understands who ranks above and below it
  • “The fog of war” principle in social life- it is important that there is no visible pecking order between humans because the group will break
    • The way to really mess with people is to upset their social order
    • You can know who is on top, and who is on the bottom, but the middle must stay unresolved
    • They just need to know their relationship to the top and the bottom

Time – The Ultimate Status Symbol

  • “There’s this general idea that’s familiar, which is poor people buy status, rich people buy time, which becomes the status” Alex Danco
    • Time is the real status symbol because it is a lot more expensive than things
    • That is why the super-rich drive practical cars; they do not feel the pressure to spend money on things to show their class position
  • When you are fighting your way upwards, you have to spend money to display class position
  • Breastfeeding has the effect of being a status symbol because you are sacrificing time and optimality
    • It is the cheapest option for feeding a newborn but at the same time it’s incredibly expensive because it costs you your time
    • However, breastfeeding is not equally available to all. Wealthier families have access to longer maternity leaves, better jobs, outside help, etc. 
  • Sometimes people get competitive with each other to exhibit status.
    • They do it through proxies. For example, parents use their children
    • This kind of status signaling intensifies as children go through high school

Schooling in Canada vs the USA

  • In the United States, there is a lot of competition to get your kids into Ivy League schools
  • Canada does not have the concept of Ivy League, but they have the concept of good schools
    • The University of Toronto is probably the best school in the country
    • They have a goal of producing as many learned graduates as possible, and that is not what Ivy League does
  • There is still pressure to get into these schools in Canada but less than in the US
    • “…college is now not about the four years of college, it’s about the 15 years you spend preparing to get into college. Once you’re there, it’s over”Alex Danco
  • Jim thinks that Midwest is still relatively less insane than the coasts in terms of competitiveness
    • Part of the reason is that in the past, local companies hired all the college graduates; e.g. banks in Dallas were hiring out of Texas A&M University
    • Since then, all these local companies became a part of giant multinational companies and there is less incentive for local hiring. Nowadays, hiring is centralized, we went global

The Great Reshuffle

  • COVID accelerated the move to the digital world. Jim calls this the great reshuffle
    • Time, space, and geography no longer matter
    • People no longer have to move to get a job, the idea of the old-style CV will change
    • “Your CV is going to be a living, breathing thing that exists in real-time online, and that’s the way people are going to find you and hire you”Jim O’Shaughnessy
    • The impulse to require somebody to live in a certain area to get a job will disappear
  • The spaces are open to all people, but why are the outcomes the same; why is it still the same people (elite) who are getting success?
  • Alex believes inequality is strong even though there are fewer physical “barriers”, young rich people are still at an advantage
    • They know the right people, talk the right way, have the right ideas, they can “…fund their self-exploration towards getting good creative jobs to have a high degree of overlap with people who want to live in Manhattan because they’re young, rich people” Alex Danco
    • There is a definite benefit of being on the location. New York attracts startup talent; there are many benefits of living in Manhattan
  • The long term impact of COVID will be heterogeneous- different outcomes for different countries
  • Establishing the actual number of COVID deaths will last a long time. We do not yet know the full consequences of the secondary effects (suicides, drug overdose, fear to go outside, etc.)
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Notes By Dario

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