Positional advantages are, by definition, unscalable. That is, if all X does is improve your position relative to others, then everyone doing X wont improve everyone’s position relative to others. That’s a bit abstract, so consider some examples.

Once upon a time, I went to an orientation for college. When incoming students asked existing students for advice, one existing student offered this: show up 30 minutes early on the first day of class so that you can get a good seat. In abstract terms, this advice boils down to this: if you show up 30 minutes early, you will gain a positional advantage relative to your peers in the choosing of seats. This sort of advice cannot possibly scale up: if everyone showed up 30 minutes early, they would not all get a good seat. The number of people who get good seats is constrained by the total supply of good seats.

Consider a second example that I have used quite regularly on this blog. I have observed that people who camp out a week early for concert tickets generally get front row tickets. Does it follow that if everyone camped out a week early they would all get front row tickets? Of course not. There are only so many front row tickets, and the best anyone can hope to do is improve their position relative to others in the capturing of those tickets.

You might think this is elementary and obvious, but think about how people — liberals and conservatives — talk about individual economic success. Without fail, they point to people who have done things that have given them positional advantages in the labor market, and then erroneously conclude that if everyone did those things, everyone would be as successful. College is the best example. People who go to college have a positional advantage over those who do not go to college in the capturing of good jobs. But putting everyone through college wont cause everyone to have a good job.

This same error is replicated in almost all discussions of poverty. Rick Santorum made it in his RNC speech:

Graduate from high school, work hard, and get married before you have children and the chance you will ever be in poverty is just two percent.

Yet if you don’t do these three things you’re 38 times more likely to end up in poverty!

Santorum appears to believe that we would only have 2 percent poverty if everyone graduated from high school, “worked hard,” and got married before they have children. This is not true. People who do those things have positional advantages in the labor market, advantages that would disappear if everyone did them (there are some non-positional advantages achieved by cohabitation, but they aren’t relevant to the post).

You can have everyone get married and educate the entire population such that they all have a PhD, MD, MBA, and JD, but that wont be a world in which everyone is a highly paid professor, doctor, executive, and lawyer. There will still be low-income positions because there are only so many high-paying jobs to capture. Some will capture them and others wont. I truly think that 95% of the public does not believe this or has never thought about it. We have entire movements that don’t seem to appreciate it for instance (see Education Reform Movement).

Ultimately, the supply of decently compensated economic positions (DCEPs) will dictate overall poverty and inequality. If you increase the supply of DCEPs — either by increasing wages (through collective bargaining for instance) or increasing social benefits (through cash transfers for instance) — you will decrease poverty and reduce inequality. If you don’t do that and just train poor people how to gain positional advantages, you may change the composition of who occupies poor and low-income economic positions, but you wont change the amount of them.