I'm happy that Clay is using my disagreement with Will to extend the argument that he makes in Here Comes Everybody. The book (which is great) is all about how lower transaction costs make it much easier to form groups. The question then is how does this change society.

Here, I'd like to clarify the argument that I made in the original post. What I said there sort-of-suggests that there are fixed cultural hierarchies, which isn't really true. A much better way to think about what is happening is to look at the struggles over how hierarchies are defined. Here, dead French sociologist Pierre Bourdieu had some very interesting things to say. To simplify his argument, social life is a continual struggle between people with different kinds of cultural, economic and social capital over how different kinds of capital should be valued and exchanged. Thus, for example, when impoverished academics sneer at the 'vulgar' taste of rich people, they are semi-consciously trying to improve the exchange rate between the kind of cultural capital that they have lots of ('good taste' as they themselves define it) and the kind of economic capital that rich people have lots of (money).

This helps us think better about status relationships among groups. You can think of groups as providing their members with cultural, social and (sometimes) economic capital. But some groups provide more valuable capital than others. This is to say that the kinds of capital that they produce can be exchanged for other kinds of capital more readily than the kinds of capital produced by other groups. Members of the group of elite Worlds of Warcraft players, for example, is going to have much greater difficulty in exchanging their status capital for economic capital than members of the group of elite golf players (no matter how good a NightElf Rogue you are, you are unlikely to make millions from endorsements). Similarly, as Clay says, you are unlikely to get written up in the New York Times

So what happens when, as Clay discusses in his book, the transaction costs of group formation go down, so that lots of new groups are able to organize? If my argument above is right, I suspect that there are three major effects.

First - it will throw the existing systems of exchange in some sectors of society into chaos - people will be unsure about how to value existing forms of social/cultural/economic capital against each other. Thus, as Clay describes it, members of existing professions (such as journalists or professional photographers) suddenly find that their capital isn't as valuable as it used to be, and that the systems of distinction around which their trade is built are collapsing. New groups with new forms of social or cultural capital start to throw their weight around, and define the terms of trade in ways that are advantageous to them, often through grandiose statements about how they are the new wave and how the old corrupt system is failing (see e.g. Glenn Reynolds, Jeff Jarvis and other purveyors of blog triumphalism). More generally, there will be rife opportunities for con-men and chancers.

Second - when the chaos settles down into some kind of relative stability, there will be significant changes to the terms of exchange. Some groups will come out much better than they had been in the past, and some groups much worse off. The coming of the Internet has improved the relative status of many forms of geek culture - sites like BoingBoing play a very important cultural role. Similarly, the Internet has allowed the netroots to challenge and partially displace existing groups (such as the DLC) in the internal pecking order of Democratic politics. Note however that this isn't an escape from cultural hierarchy; it's a re-ordering of existing hierarchies of exchange. This re-ordering may often have attractive features (more possibilities may be more open to a wider variety of individuals than in the pre-existing order), but it's not fundamentally different in kind to what went before.

Third, the creation of new groups allows for some level of individual empowerment among people who previously didn't know anyone else like them, and increases the possibilities of exchange among groups. If you are a grumpy leftwing radical living in the depts of rural Mississippi, or a practitioner of Wicca in Tulsa, Oklahoma, you can now find and communicate with others like you. Much of the time, this will be a good thing (although as Clay says in his book, the Internet also empowers pro-anorexia groups and others we might prefer to see staying disempowered). Moreover, you can perhaps create your own miniature nexuses of exchange, together with other groups. Again, BoingBoing is a really interesting example - it has created a kind of node of mutual awareness and exchange between a variety of new and existing groups interested in technology, certain kinds of art and public display, left-libertarian politics, science fiction and other topics.

It's this last bit where the disagreements between me and Will (and maybe Clay) come out most clearly. Will suggests that the proliferation of new groups and identities allows us to get away from status hierarchies, and battles over scarce 'positional' goods. In the new world that technology has liberated, everyone can, in effect, create their own status hierarchies, where they (because of their mastery of caterpillar-fuzz counting, one-dimensional chess, Chinese Scrabble or whatever) are at or near the top. People can opt out of status races where they are likely to lose, and opt in to status races that they are likely to win. Given a near infinity of possible status hierarchies, they can choose the ones that they do well in.

But this argument presupposes that these different possible status hierarchies are disconnected from each other. The empirics seem to me to tell a different story. People are aware not only of their status within particular groups, but of the relative status of different groups. Expansions in the number of groups doesn't lead the members of those new groups to abandon efforts to figure out the terms of exchange between the groups, or to stop pushing for terms of exchange that privilege their group's cultural or social capital vis-a-vis that of others. Precisely the opposite is true. For every new geek culture, there is a Geek Hierarchy.

Furthermore, as I have already noted, the expansion of the number of groups doesn't change the fact that some groups continue to have much more cultural, political, social or (especially) economic capital than others. Clay may reasonably be more interested in what's happening in WoW than in professional golf, and get happiness from the fact that he's a good WoW player. But he may also find that it is difficult to turn his WoW prowess into other kinds of capital. If he wants to organize a tournament of first rank WoW players to raise money for his favorite charity, he will almost certainly raise far less money than if he were able to recruit first rate professional golfers. The proliferation of new groups may complicate games over relative status, but it surely doesn't displace them.

This isn't to say that the proliferation of groups is irrelevant to individual happiness. New groups allow previously disconnected people to connect to each other, and to find new possibilities of exchange. But they don't (contra Will) provide a magical escape from the kinds of socially competitive behavior that humans have historically engaged in. Instead, they provide a whole variety of new ways in which one can try to keep up with the Joneses.