[12 May 2010]
I am on vacation now, so I won’t be writing much over the next few days. But while I was in the airport I read Rachel Kranton and George Akerlof’s Identity Economics, which seemed as though it would have been right up my alley, considering how often I throw the word identity around. I was a little disappointed in the book because the authors had to labor hard to persuade their intended audience of things I already take for granted, namely that one’s sense of identity affects the “individual utility function”—i.e. shapes the choices one makes to try to garner satisfaction. More problematic, Akerlof and Kranton are forced to presume stable identities to program them into the formulas they use to deduce utility at any given moment for an individual. The basic idea (and this is a simplification done from memory) is that there is an ideal identity presumed, and the individual loses or gains utility according to whether their behavior conforms to the ideal. Cognitive dissonance, in other words, has economic ramifications.
I’m reluctant to buy into this completely, because I tend to see identity as an end product rather than a preconceived target; it’s something we retrospectively assign to give coherence to our past behavior. I think the ideals are far more fluid than the authors’ analysis allows for, and they tend to give short shrift to what is most interesting to me, the productive labor involved in producing and disseminating the “norms” they argue make up identity. When I write about immaterial labor, that is what I am trying mainly to get at—how identity is now a circulating product and our self-fashioning is a kind of exploitable labor. The term “Identity economics” makes me think of that, the ways in which postmodern capitalism has made the self the ultimate manufactured product in the service-oriented economy—which is not what Akerlof and Kranton have in mind. They seem to assume identity is stable and readily available to consciousness, but participation in the economic world can challenge what we believe about ourselves. This leads them to write things like: “He loses identity utility because of the gap between the effort he expends and what he ideally would like to do. His off-the-job behavior, in our terminology, is his way to ‘restore the loss of identity utility.’ ”
They are careful to say that these are not entirely conscious calculations, but that still seems strongly implied—that at some level an identity is preconceived, and behavior is compared and contrasted with it. Part of the issue I have with this is that it seems to reduced identity to one single dimension (often what seems a social stereotype), something that you have more or less of at a given moment. Obviously there are many dimensions working at the same time, many different ways we think about ourselves, many different norms intersecting and contradicting at any given moment, all affecting the utility that comes from who we think we are.
I think that generally, the degree to which identity becomes a rational calculation is also the degree to which we experience alienation, and apartness from a constructed self put on social display as a sort of product, a material manifestation of our social and cultural capital. The most “utility” may be in the ability to not see our identity as something instrumental, but as something natural, lived in, spontaneous. If that is so, then we are in a weird epistemological area where we make unconscious decisions to maximize our sense of our self being something uncalculated and natural. We need to be as unaware of identity economics as possible to derive any benefit from them.
But the cost-benefit analyses the authors provide of the ideological efforts to change people’s norms and self-concepts are pretty interesting. Many of Kranton and Akerlof’s examples hinge on ideas of being an insider or an outsider—for example, what benefits an employer can gain by changing how their employees relate to their firm. They suggest that employers can possibly skimp on wages and recoup the costs of making an employee feel like they are an insider, because insider-ness is a kind of wage in itself. Manipulation of self-perceptions from the outside can thus be a cost-control measure; people can be paid more cheaply in affect than in money. That has ready application to the attention economy and internet-driven free labor, which is compensated not by wages but by some often vague sense of recognition. Businesses will be very eager to explore further ways to cut back on wages and justify economically ways to pay workers in affect instead. Akerlof and Kranton provide rudimentary tools to teach firms to trust in spending on ideological adjustments where once they were content to trust money as the ultimate motivator.