Status Games

Status Games

Naval Ravikant mentioned on his episode of the Knowledge Project, the idea that life is a single-player game and the harm of playing 'status games'. We're all likely aware of the downsides doing things for status, but I had not heard of it described in this way. From Naval,

Status games are multiplayer, zero-sum, hierarchical, judged socially. Get grades, applause, titles now — emptiness later. Natural games are single player, positive-sum, internal, judged by nature/markets. Pay in pain now — get wealth, health, knowledge, peace, family later.- Naval

What does this mean?

The idea of zero-sum and positive-sum are terms in game theory. They refer to the outcome of resources when players desires are all factored in. In a zero-sum game, resources are finite. If I gain something then someone else must lose something. In a positive-sum game, resources are increased, and all players gain. Social games are zero-sum. Natural games (production, business, health, family) are positive-sum games.

Social games

Those who are competing for social status or political status are competing in a zero-sum game. This is because in order for one person's status to increase, another person's status needs to decrease. In order for one person to win, another person must lose. It's a battle of ego. You'll recognize this bidding of social status as "one upping", which is well described in this video:

Wealth Building

On the other hand, wealth building is positive-sum. This means when I create value, or wealth, it creates greater value for everyone. For example, when Willis Carrier invented the air conditioning, it didn't just make him wealthy, but raised the standard of living of millions of Americans. In fact, in economics, this is known as the "fixed pie" fallacy, that there is a fixed amount of resources and wealth must be transferred from someone else in order to be acquired. This explains why most of us live more comfortable lives than even the richest of those generations before us.

Single Player Games

This is important because it forms the type of mindset you develop. People who play status games must by definition "one-up" others. They are in a a battle for status, which turn them into combative personalities. As a result, they are always going to dislike those who do better than them.

Yet life is a single player game. Building wealth (either through creating businesses, saving money, or buying a home) does not take anything away from others. It builds a mindset that is focused internally, on one's own progress and improvement. This is also summarized by Warren Buffet's scorecard: 

The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard. I always pose it this way. I say: ‘Lookit. Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?’ Now, that’s an interesting question.

This is a good reminder that the pursuit of greater status has an impact on your mindset. An inner "scorecard", is a surer path to creating long-term wealth, health, and lifting up those around you.

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