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MichaelVassar comments on That other kind of status - Less Wrong
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Your story makes sense, but you are missing the strong human urge to split into tribes. We want to show our people we are committed especially to them, and we can do that by putting effort into symbols of status that work much better for them than for other groups. Investing in generic status symbols does not signal loyalty to one's group.
Yes, signaling loyalty to whatever categories you belong to looks to me like a slightly stronger motivation for most people than signaling status. Related to both is signaling conformity to people's stereotypes regarding the categories you fit into, e.g. fitting in.
Relevantly, in American culture fitting in and narrow in group loyalties are denegrated by popular culture while the attempt go succeed, e.g. to gain status especially in contests, is strongly promoted. How many heroes of American stories fit in? How many succeed against all odds? Contrast to medieval or ancient stories where trying to raise one's status might be hubris or invite the evil eye.