As I said previously, I’ve changed my mind about what quantitative methods can contribute to international relations research. Becoming more familiar with quantitative research has exposed me to the existence of a more diverse set of viewpoints on the appropriate use of statistical techniques and what they can tell us about the social world. I’ve found the anti-inductivist arguments of scholars of the analytical sociology movement and the creative, innovative positivism of Philip Schrodt particularly useful in their criticism of standard practices in quantitative social science.
Another unorthodox perspective is provided by Salvatore Babones. I first became aware of Babones research on the global income distribution a long time ago when I studying for my MA. His work was one of the influences that led me to gradually take the empirics of global inequality more and more seriously, leading me to my current set of interests. Babones, however, is an anti-positivist – something that he considers to be compatible with the employment of statistical techniques. He argues that quantitative methods should not be put in service of theory-testing, which he regards as an attempt to emulate the natural sciences that is of dubious merit when dealing with observational data. Instead, he advocates the use of statistical techniques as powerful tools to enable the researcher to engage in a dialogue with the data as part of a holistic, reflexive research enterprise. This leads him to a surprising conclusion in a recent article:
The goal of interpretive research is not really to answer research questions. The goal of interpretive research is to develop the expertise of the researcher. The decomposition of new environments into basic building blocks that have already been studied and the assembly of those building blocks into conjectural policy solutions is what human experts do. The practice of interpretive data analysis helps them learn how to do it better.
There seems to be some overlap here with the emphasis on the concatenation of mechanisms by analytical sociologists. Interestingly, Babones notes that he is more sympathetic to the use of traditional statistical technique such as regression than some analytical sociologists. Perhaps the difference arises from the more optimistic and philosophically realist position of analytical sociologists: they believe that sufficiently sophisticated and realistic models can succeed at identifying underlying data-generating processes. Babones seems a bit more sceptical, he offers an interpretative perspective in part because he holds that variables are always at least one remove from the entities we are interested in (I wondered if this might dispose him towards latent factor analysis and it turns out he’s edited a book on the topic). In places, Babones’s account seems a bit too inductivist from the position in the philosophy of science that I occupy – but I intend to read his book on Macro-Comparative Research to engage with his standpoint in more detail, as Babones is an expert researcher who has offered a distinct perspective on quantitative methods.
Before the weekend, the Monkey Cage featured an interesting article on the Greek debt crisis and Thucydides. In general, I’m not a fan of the way that Thucydides and the History of the Peloponnesian War is trotted out within debates on international relations. The basic problem is that the famous quote plucked from Thucydides’s Melian dialogue, ‘The powerful do what they can, whilst the weak suffer what they must’, is potentially vacuous. There’s a question of whether the quote is even an accurate translation of Thucydides: apparently, Mary Beard claims that a closer translation would be ‘The powerful exact what they can, and the weak have to comply’, which removes some of the natural necessity of the quote and assigns greater responsibility to the powerful. But putting this to one side, the quotation is circular and tautological if being weak is defined as suffering what one must and powerful means doing whatever one can without restraint. As I’ve emphasised (belaboured?) in discussions with countless students, a lot of power-talk in international relations is vacuous in this regard. These sort of parlour tricks, wheeling out old Thucydides to make seemingly-profound but platitudinous statements, are what provides fairly unsophisticated versions of realism in international relations with their superficial aura of plausibility. To talk about power properly, it’s necessary to distinguish between resources/relationships and outcomes, which enables a much more productive debate about what sort of resources/social relations generate control over outcomes under what sort of conditions.
But the article by Neville Morley is quite a bit better than the usual fare, as it discusses the way in which responses of actors placed positions of strength and weakness differ from what rational choice theories would predict. Thus it seems that the structure of the situation of bargaining among unequals has an influence over the goals that actors pursue. Perhaps this is another case where actors are operating according to heuristics, general strategies that are effective in a range of similar social circumstances. Maybe in their wider social experiences actors are used to using a position of strength to push for maximum advantage and used to shifting to moral appeals and unreciprocated cooperation when they are at a disadvantage. As the evidence I’ve read on cross-cultural experiments with game theory seems to indicate, actors may bring their wider social experiences of competition and cooperation with them into the laboratory.
The article makes some fascinating points about Varoufakis’s own research on game theory and the strategies that he has pursued as Finance Minister. But as someone in the comments points out, Morley’s piece ignores the fact of Athen’s eventual defeat in the Peloponnesian War – Thucydides classic has been read as a tragedy in which the Athenians, who expressed the hubris of the overly mighty in their arrogant dismissal of the moral arguments of the Melians, were eventually visited by nemesis. On this reading, there are lessons for the powerful as well as the weak.
A couple of weeks ago the Economist published an interesting article about labour markets and secular stagnation, the problem of low productivity despite apparent technical change in the industrialised world that has attracted the attention of economists such as Krugman, Summers and Cowen. The article examines a number of puzzling features of the current economic conjuncture. It argues that technological change substitutes for medium-skill labour, displacing workers into low-skilled work, leading to a fall in the price of low-skilled labour, making automation of low-skilled work unattractive. So under certain circumstances, technological change may be self-limiting. The article discusses how these features may be related to low aggregate demand and the expansion of consumer credit.
One possible takeaway from this divergence is that productivity is often endogenous to the real wage. Confronted with high real wages, firms reorganise production, invest in training and capital, and take other steps to boost productivity and economise on labour. When real wages are falling, by contrast, the incentive to economise is reduced and productivity lags.
There’s an interesting overlap with some of the analyses put forward by a previous generation of radical political economists, whose work I’ve been taking another look whilst preparing for a undergrad course I’m teaching. Emmanuel argued that productivity doesn’t drive high wages in the industrialised world, high wages drove industrialisation and productivity increases. This argument is too absolutist and is not consistent with most accounts of industrialisation in the West, but acknowledging that productivity is endogenous to the real wage is an important observation for understanding some aspects of the political economy of unequal development. As the Economist article suggests, the level of endogeneity may be greater than previously assumed – with significant consequences for both national political economies and the world economy.
Of course, the Economist doesn’t draw out the full implications of this analysis in terms of power relations and the conflicts of interest that exist between different social groups on a national and global level. Also missing from the article is any sense that technical change involves struggle and the assertion of authority. But hey, for an article in the Economist to acknowledge that ‘Distributional issues are key’ is pretty unusual.
There was an interview in the Guardian yesterday with Tory MP for Penrith and all-round interesting chap Rory Stewart. He restates some of his level-headed, informed and compelling criticisms of NATO intervention and statebuilding. Simply put, these efforts do not work because foreigners cannot hope to understand the complex and diverse societies they are attempting to transform. These views were informed by his travels around Afghanistan and Pakistan, where he gained experience of the different systems of law, custom and political authority operating from region to region, hamlet to hamlet.
He’s now become an MP and has found the rules and customs of Westminster to be as baffling and intricate as those of any Pashtun jirga. His reflection that most MPs don’t reflect, don’t think very hard about Britain’s future and don’t have much of an understanding of the society that they govern. So far, so in tune with the present (well justified) anti-politician zeitgeist: professional politicians form a discrete elite, insulated from the concerns of ordinary people, specialists only in the art of influencing the news-cycle, maximising expense claims and moving up the greasy pole. Rory Stewart is a bit of an outlier in such a world, a thinker and something of a neo-Victorian adventurer. Parliament otherwise bears testament to the arguments of Michels and other elitists that organised party machines would eventually give rise to new oligarchies.
But Stewart doesn’t think that politicians or any other elites actually rule: ‘We’re not run by anybody. The secret of modern Britain is there is no power anywhere.’ In support of this claim he notes that journalists, politicians and financiers all regard themselves as powerless, that policy is not effective: ‘You get there and you pull the lever, and nothing happens.’
I think Stewart’s arguments are a bit misleading. Part of the problem is the myopia of power and privilege, the lack of experience of real powerlessness and the sense of being subject to forces completely outside of one’s control, forces that threaten to rip apart the fabric of one’s life. But another aspect of the issue is the concept of power Stewart employs. He focuses on the inability of politicians and other elite actors to pull and lever or wave a wand to effect change, to exercise power in the sense of Russell’s ‘production of intended effects’. Well, why should we expect that to be possible? Britain is a liberal democracy under the rule of law. Groups who disagree with a particular policy or law have the opportunity to oppose it electorally, legally and through civil society. Policymaking is the result of compromises struck between diverse interests, the government is limited in its ability to ride roughshod over opposition.
Moving from an account of the ability of elites to exercise ‘power to’ and ‘power over’ others, it seems clear that there is plenty of power to go around in the UK if we consider the power embodied in the arrangements that comprise the status quo. Every society is structured by a set of institutionalised bargains struck between different conflict groups, i.e. competing interests, at various points in its history. A society’s laws, institutions, distribution of resources and customs are shaped by such bargains. Because they reflect the interests of conflict groups and the balance of forces between them, such structures systematically privilege some interests above others.
As immediately pointed out in the comment section in the online version of the interview with Stewart, Britain’s financial institutions were bailed out at cost to the taxpayer after the financial crisis struck. Alastair Darling probably didn’t desire to preside over such a bail out, but structural features of the British economy meant that the alternatives were, at the very least, costly and difficult. Those in the financial sector were able to secure their interests, in contrast to disabled persons now forced to pay a bedroom tax, due to power inequalities embodied in the structural features of the British economy, political system and legal system.
The UK is not run by omnipotent politicians able to pull levers to reshape society in an instant or global elites who can make the masses dance like puppets. The UK and other industrial democracies may well be sclerotic, with vested interests preventing effective policy making. But this doesn’t mean that there is no power in Britain. There is, and it is structural power that makes society resistant to transformation.
The advantage of teaching very different subjects is that it draws your attention to strange contrasts and parallels across the social world and human history. 1645, China:
“They sharpened their hoes into swords, and they took to themselves the title of ‘Levelling Kings’, declaring that they were levelling the distinction between masters and serfs, titled and mean, rich and poor… “They tied the masters to pillars and flogged them with whips and with the lashes of bamboo…They would slap them across the cheeks and say: ‘We are all of us equally men. What right had you to cal us serfs? From now on it is going to be the other way around!’”
Mark Elvin, The Pattern of the Chinese Past 1973
Meanwhile, there was levelling going on in England
“I think that the poorest he that is in England hath a life to live, as the greatest he; and therefore truly, Sir, I think it’s clear, that every man that is to live under a government ought first by his own consent to put himself under that government; and I do think that the poorest man in England is not bound in a strict sense to that government that he hath not had a voice to put himself under”
Col. Rainsborough at the Putney debates 1947
Was the outbreak of ‘levelling’ at the opposite ends of Eurasia in the mid-C17th a coincidence? Presumably, I don’t know of any deep, structural process hypothesised by world historians or historical sociologists that would link the two episodes – it seems like a bit of a stretch. But the similarities tempt an explanation.
As I am incredibly busy I didn’t expect to write another post, but I want to note further excellent contributions to the ‘End of IR Theory’ symposium at the Duck of Minerva (previous posts here and here). Arlene Tickner argues that
core-periphery like logics similar to those described by world-system and dependency theory in the 1960s and 1970s are still operational in multiple spheres of (globalized) human activity, including knowledge building. International Relations (IR) is no exception.
This pattern is resistant to change, not least because
Strategies that acknowledge and embrace diversity are inadequate too because scientific cores are hard-pressed to recognize non-Western or Southern intellectual contributions as equals without undermining their own power, privilege and place in the world knowledge chain.
‘World knowledge chain’ implies that this feature of the IR discipline is but one facet of a wider pattern of asymmetric social organisation. But Tickner nonetheless claims that
Terms such as core and periphery (or third world) are largely passé, and may even be conceptually and heuristically objectionable on the grounds that they are rooted in dichotomous language that reproduces power differentials between diverse actors and sites around the world.
It seems odd for Tickner to describe the terms ‘core’ and ‘periphery’ as passé (although I agree that ‘Third World’ refers to a very specific conjuncture in world politics that has now passed) when her own argument appeals to ‘core-periphery like logics similar to those described by world-system and dependency theory’. What’s the difference between a core-periphery logic and a core-periphery like logic? In a superb, and beautifully written, response Inayatullah sketches the details of the political economy ‘implied’ by Tickner’s piece:
It is worth noting that under capitalism the competitive process requires all corporations to have research and development (R&D) facilities. The stream of capital dedicated to R&D is subsidized by the state, promoted by the military, and enriched by colleges and universities. Colleges and universities provide the training for future corporate employees, provide junior candidates for those jobs, and serve as incubators for social and technical innovations. Intensive and extensive cultivation of knowledge serves as the fuel for innovation – the driving force of capitalism. As participants in the discipline of IR, we are not passive bystanders in the accumulation process.
Why then does Tickner hesitate to actually embrace the wider structuralist perspective her contribution implies (and contributes to)? In part it seems to be her opposition to ‘dichotomous language that reproduces power differentials between diverse actors and sites around the world’. These concerns are widely held, but I would argue that some of the antipathy towards dichotomy is misplaced. It is very difficult to reveal, analyse and critique inequalities without drawing dichotomous distinctions. Identifying the location of power doesn’t necessarily contribute to its reproduction, sometimes quite the opposite. But these are issues that would have to be treated at greater length.
In any case, Inayatullah invites readers to un-forget the process by which concepts such as core and periphery were erased from disciplinary debates in favour of a concern with representation and social construction. For a brief period, core-periphery relations were the subject of major scholarly attention as dependency theory reached its apex. But
It wasn’t long before it was shelved in the curio cabinet. Caporaso himself was one of the few who soberly assessed the situation: Dependency Theory, he claimed, had died from neglect, not from critique.
Consider, in contrast, the case of what we call “Constructivism.” Not what emerged from Nick Onuf’s work but from Alex Wendt’s. Reflexivity? Dialectical sophistication? An awareness of the meta issues – ontology? epistemology? How shall we name that moment in the late 1980s and early 1990s when someone came up from the basement and said, “Hey, look what I/we found?” The result twenty years later: a booming mass-production of constructivism – the new liberalism, same as the old liberalism.
Reading Inayatullah’s post, it’s hard not to regret the unmet promise of that period of intense scholarly debate about core-periphery relations (it seems very strange to feel nostalgic about something I never experienced, but Inayatullah’s post really is well written). Caporaso’s assessment is accurate, dependency theory has a lot of weaknesses, but this was not why it was abandoned. As I noted in a previous publication, compare its fate to the benefit of the doubt that was extended to neo-realism after the end of the Cold War.
In the social sciences, if theories are to survive they need to be constantly updated and elaborated – reassembled mid-sea, with non-functioning parts thrown overboard and theoretical coastlines raided for new supplies. To contribute to contemporary debates in the IR discipline, which are increasingly focused on middle-range theory, remaining relevant requires a relentless focus on mechanisms and their interaction. But theorists also need to remain aware of the process of disciplinary forgetting that Inayatullah highlights, which – as argued by Arena in his comment on a contribution by Lake to the Duck symposium – in its latest incarnation has enabled scholars to represent the core assumptions of liberal international theory as neutral and non-paradigmatic. I’ve attempted to make my own contribution to a renewed analysis of systemic inequalities in world politics, but the path to theory (especially critical theory) is long and we in the discipline are prone to forgetfulness.
An article I wrote was published a week last Friday in a special edition of Millennium: Journal of International Studies focusing on the topic of Materialism and World Politics. The special edition features papers presented at the rather excellent two-day conference at the LSE in October 2012, including my own. The title of my article is ‘ Structural Inequality, Quasi-rents and the Democratic Peace: A Neo-Ricardian Analysis of International Order’. Here’s the abstract:
This article employs the neo-Ricardian concept of quasi-rents – temporary above-market returns – to vindicate the structuralist claim that patterns of international order are shaped by global inequality and the transnational division of labour. Developing a framework linking the distribution of quasi-rents within the global economy to the process of class formation, the article examines the implications for the influential ‘social market democracy’ explanation of the democratic peace. It argues that the democratic peace is in part predicated on the quasi-rents enjoyed by substantial sections of the workforces of the ‘core’ advanced industrial states. Such a political economy provides the foundations for a ‘social market democracy’ in which economic security can be enjoyed by substantial sections of the population, giving rise to the system of values on which the democratic peace rests. Thus, present patterns of international order result from a historically specific unequal distribution of quasi-rents within the world economy.
The abstract is somewhat technical, due to the need to locate the article in ongoing theoretical debates in less than 150 words. For the non-initiated, here’s what the article seeks to accomplish: Structuralism is a materialist theory of international relations which focuses on asymmetric relationships beyond the nation-state and how they result in global patterns of inequality. Structuralism has lost favour in international relations theory, partly because scholars feel it doesn’t have much to say about core issues of international politics such as authority, order and the use of organised violence*. This article seeks to present a fresh defence of structuralist arguments, arguing that patterns of war and peace may in fact be linked to patterns of global inequality and the organisation of the global division of labour. It does this by engaging with an influential position in the debate over the ‘democratic peace’ (the observed regularity that democracies very rarely engage in inter-state war with one another), Michael Mousseau’s ‘social market’ theory. He argues that peaceful, human rights-respecting values become dominant when large numbers of individuals in a society can enjoy economic security when they participate in the market. When markets do not provide economic security, those peaceful values will be weakened.
In the paper I investigate the circumstances under which markets may provide economic security, drawing on the labour market sociology of Aage Sorensen. He argued that individuals enjoy security when they occupy certain semi-insulated niches within labour markets, such as within occupationalised careers or professions. The ‘rungs’ of the ‘ladders’ of such internal job markets provide a greater degree of security than fluctating, unfettered markets. These niches arise out of the process of bargaining over quasi-rents, temporary returns above the normal market rate for an economic resource such as land, labour or capital. The local availability of quasi-rents will therefore determine the ability of actors in a common economic position (members of a class, if you like) to establish themselves within a niche in the labour market. The article uses research from the global value-chains literature to analyse some of the features of the distribution of quasi-rents. Until recently, the lion’s share of quasi-rents were located in the advanced industrialised North due to the compounded technological advantages of the early industrialisers. Economic actors in the global South found themselves stuck in industries producing generic products and were forced to compete on price.
But the new global division of labour has shaken this picture up. Many economic actors in the global South still lack access to quasi-rents and find themselves squeezed by large multinational buyers that control supply chains. But in other parts of the world, SE Asia and the S American cone for example, the shift in manufacturing capacity from the North may have led to opportunities to bargain for quasi-rents. Workers in the North, however, have been fighting a rearguard action to protect their niches within labour markets and defend systems of social welfare and insurance. Employers in the North have, due to a conjuncture of political, economic and technological factors, gotten much better at eliminating their workers from shares of quasi-rents. This seems to have led markets to become much more fluid, ‘flexible’ is the preferred term. But as Sorensen argued, freer markets might mean more insecure lives. More insecure lives might mean weaker support for pacific, liberal values. Of course, pacific values might actually strengthen amongst the new industrialisers in the global South. The point is that there are a set of compelling reasons, based on established empirical literatures within three different disciplines, to believe that the democratic peace is in fact underpinned by the specifics of the present global division of labour. This means that structuralism really does have something big and important to contribute to debates in international relations theory and the study of international security.
That’s the gist of the article (reversing the structure of the argument), but the real thing really attempts to nail down each step and present a rigorous, plausible restatement of structuralism using the idea of quasi-rents. I’m really happy with how the paper turned out and delighted to be part of what looks like a great issue of Millennium.
Last month there was a lot of chatter about an article entitled ‘A New Model of Social Class: Findings from the BBC’s Great British Class Survey Experiment’ that claimed to have identified seven distinct classes in the UK. Though not a sociologist, I thought I’d stick my oar into the debate by having a look at the paper.
The identification of seven classes was the result of a large survey conducted with the help of the BBC that gauged the levels of different kinds of ‘capital’ possessed by individuals, including not just assets and income but cultural capital (traditional and popular) and social capital. The authors then used a pretty swish statistical model to identify the most significant clusters of individuals possessing similar amounts of the various types of capital as one another. They thus identified their seven classes, which include an underclass and an elite as well as several distinct middling classes with various mixes of the different types of capital. This is an objective not subjective model of class, it doesn’t matter whether or not individuals identify as belonging to one class or another. The model receives a degree of validation by the fact that different occupations/professions predominate amongst their independently-defined classes (although ‘social capital’ is defined in terms of the occupations of people an individual knows, so the logic seems a bit circular (endogeneity?)).
Unlike the dominant approaches to class in sociology, the methodology is one of ‘bottom up’ formation of categories, deriving its classes from the empirical data, rather than defining classes analytically in a ‘top down’ fashion. That makes the paper pretty interesting. The paper isn’t atheoretical though, the methodology is based on the assumption that individuals can (imperfectly) convert different types of capital into one another. I’m not really sure, however, that ‘new cultural capital’ (knowledge of/participation in popular culture) is as important as assets and income for determining individual life-chances as the paper seems to assume. Once, yes, a classical education and knowledge of high culture might have enabled social and professional advancement. Sadly, I’m not sure that knowledge of 80s indiepop, The Wire or Marvel comics confers such an advantage (although fondness for BSG, GoT and amusing cat pictures does seem to help in the world of IR blogging). In addition, why isn’t human/educational capital included as a variable? It’s omission doesn’t seem to make sense as far as I can see.
The major issue with the article is that the class-categories it comes up with are an odd amalgam of socio-economic classes and generational cohorts. This is because the ‘classes’ identified by the survey are in part defined by their income and their assets. But for many individuals in professions and occupations with some kind of career ladder incomes start pretty low, but rise as individuals climb the ladder. In addition, in the usual life-course within industrialised societies, individuals can be expected to build up assets (such as property and pension pots) as their working life progresses. We should expect most young people to have relatively few assets and fairly similar (low) incomes. As individuals grow older their trajectories diverge, with gaps between the incomes of people in different professions/occupations widening. Individuals will then tend to build up asset portfolios at different rates. So in the schema offered by the authors individuals will fall into very different classes based on their age-group. This indeed does seem to have occurred. The ‘traditional working class’ for example is in part defined by its low incomes but reasonably high level of asset ownership (uh oh, something’s gone wrong if we are defining the w/c by asset-ownership), and the average age of its members is significantly higher than the average. ‘Emergent service workers’ comprise low-asset and low-income individuals with high ’emerging cultural capital’ , i.e. young people of all occupations who are just starting out on their careers and whose trajectories haven’t diverged yet.
The categories are muddled because the survey is a cross-section of the whole population. The usual methodology for research into class is to conduct a cross-sectional survey of an age-cohort and then follow-up the survey at regular intervals. This enables comparison of the trajectories or life-courses of individuals occupying different economic classes and/or status groups. So sociologists are normally more concerned with, for example, lifetime earnings rather than income at a fixed point in time. The methodology adopted by the authors instead compares individuals at very different points along the life-course. Now, maybe the article does tell us something about the broad class-status-generational groups that exist in contemporary Britain. Their survey also highlights the existence of a distinct ‘elite’ class (I might do another post on this) and the decomposition of the old working class that has occurred between generations. But I think most sociologists won’t want to collapse together different sociological categories like this and will stick to the well-established and well-validated ‘top-down’ schemas of scholars like Goldthorpe and Wright.
As every first year politics undergraduate will be aware, once upon a time there was a debate within political sociology between elitists and pluralists. Elitists in political sociology, represented by scholars such as C Wright Mills, argued that political institutions exhibit a systemic bias in favour of certain dominant groups within society, i.e. the ruling classes. Pluralists, such as Robert Dahl, argued that no one set of organised interest groups could maintain permanent control of the political process within modern democracies.
Events over the past decade make pluralism seem rather prima facie implausible. One would certainly want some strong evidence to support such a claim during a period of increasing inequality and displacement of the costs of risks taken by globalised financial sectors onto general publics.
Instead, there seems to be mounting evidence from political science – where a basically pluralist outlook tends to dominate – that the elitist theory provides an accurate account of the current state of politics in the OECD. Via Kevin Drum a summary of a pilot survey by Page and Bartels that suggests that the policy preferences of US politicians seem to track the policy preferences of the wealthy much more closely than those of average citizens. Via Chris Dillow a recent paper by Torija that argues that politicians of all major parties work to maximise the preference-satisfaction of the top few percentiles of the income distribution. He argues that this is a new phenomenon that has arisen since the 1970s, which is interesting as it suggests that the problem is less ‘structural’ and intrinsic to capitalist democracies than ‘conjunctural’ and reflecting recent historical circumstances.
What relevance is all of this to international relations? Well, it gives a boost to more elitist/structuralist theories of international relations and foreign policy such as neo-Gramscianism (Robert Cox, Stephen Gill), and might undermine some of the complacency of pluralist theories such as ‘new liberalism’ that regard states as neutral agents that act on behalf of shifting coalitions of social actors.
About a week ago, Charlie Stross wrote a post musing about the declining marginal utility of material possessions and the question of why billionaires would want to chase after even greater fortunes. He thinks that some of this behaviour is because being super-rich allows you to produce new goods which are not normally available for purchase at any price, i.e. create new inclusive club goods such as novel medical treatments. Interesting, but a bit charitable.
I’d speculate that much of the pursuit of ultra-wealth is motivated by status concerns, as at any point in the income distribution the income gap between oneself and those acquaintances one knows who are wealthier is likely to be greater than the gap between oneself and those acquaintances who are less wealthy. Even billions might seem small potatoes depending on the company one keeps. The second major reason is dynasty-building. Stross’s account is too individualistic. Whenever the wealthy have had the opportunity to bequeath their wealth as an unearned patrimony to their offspring they have done so, such as when British industrialists did their best to turn themselves into a landed gentry. Profits are often turned into permanent rent-producing assets as soon as they can be. Hence the complex systems of trust-funds, offshore bank accounts, family limited liability partnerships and so on employed by people like Tony Blair. There might be limits to what super-wealth can buy you, but it can increase the chances that your descendants will remain at the top of the heap. In other words, the goal of many capitalists is feudalism.