I'd quibbled a bit with Half Sigma over here. HS argued that, even in a world with no rent seeking, value transference is unavoidable: creating a new product that increases total welfare also results in an increase in the creator's status; if status is a fixed-sum game, then the creator of value has also transferred status from other people to himself. HS recommended progressive income taxation as means of compensating folks who consequently lost status.
I suggested rather that status is properly viewed as multidimensional, with folks being able to choose in which status game they'd like to compete. Money status is only one dimension; being "#1 Dad" may be another; being able to lift heavy weights a third (see the Mandelbaums in classic Seinfeld for examples of both of those); having a maxed out World of Warcraft character yet another. There are as many status dimensions as there are activities in which folks can seek excellence. In that case, why ought we single out status transfers through value creation as being the dimension demanding transfers? Shouldn't I get a transfer whenever somebody else goes to the gym, pushing me further down on the "able to lift weights" status dimension? It all seems a nonsense.
I've seen reasonable argument that status may well wind up loading on a single dimension - basically Roissy's "alphaness" measure, your effective attractiveness to the gender of your choice. Of course, the range of corrective status taxation measures in that case would be more complicated, more comprehensive, and more ridiculous. How do we tax Brother Sharp for his fashion sense? It's not implausible that status might reduce to this single dimension, but neither is it obvious to me that it does.
HS replies, pointing to his older post arguing that World of Warcraft status isn't real status. I'd been thinking less of his post when I commented (hadn't started reading him until recently) and more of Will Wilkinson's rather nice essay of a couple years back on the multidimensionality of status; WoW is just one of the near-infinite ways folks can choose to acquire status. HS makes a false consciousness argument, clearly but forgivably not having read my prior piece with Boudreaux arguing against the notion. If folks can get happiness from upweighting the dimensions on which they do better, who are we to say that isn't real happiness?