Economists have written about the star system and the impact of globalization on inequality 1. Capsule version: global markets mean that talent can be monetized at a much greater scale, e.g. the greatest athletes of today make way more money than the greatest athletes of 50 years ago. Not to underplay the role of structural imbalances of power in the rise of the super-wealthy, I think it is nonetheless safe to say that at least part of the rise of the fractal rich has been the result of global markets.
One aspect of this that I think is underexplored is how the presence of the hyper successful in our society foster envy in a more pervasive way than before. One important aspect of globalization is the tyranny of small differences. What I mean by this is that in these global competitions (many of which are winner-take-all or winner-take-most), the difference between first and second in terms of ability is ever shrinking. The result of this is that outcomes for people who are very similar on observable talent have diverged. Think about the 8th place olympian who gets few endorsements or wealth but is still better than 99.9999% of people at their sport, or the ace programmer who makes a very nice middle class living but is no tech millionaire. These people are all tremendously successful, and yet they have ready models of people who are only a little bit better and way way more successful. It’s easy to see how people in that position might feel envy despite the fact that they are living objectively better than most everyone else in all of human history. In fact, in a really fantastic paper on “Hypermotivation“, Scott Rick and George Loewenstein interpret experimental evidence showing that people in more fierce competitions are more likely to cheat out of loss aversion, and a sense that they are only getting themselves what they feel they are entitled to or deserve (they talk about this in the context of fraud in psychology).
Nonetheless, I do think that this kind of envy is what motivates many in the top 5% to increase their output rather than enjoy their added productivity in the form of more leisure. Says the person enjoying his Saturday.
- Chyrstia Freedland writes about Sherwin Rosen’s work on the “economics of superstars” to great effect in her wonderful book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else