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To: Sam Citron who wrote (100394)	4/13/2000 3:57:00 PM
From: GST	Read Replies (1) \| Respond to of 164684

Sam: I will give you references another time. I have no problem with the importance of the free flow of information, etc. -- and the debate here is not about what gives Harvard its value per se, but as an illustration. BTW, in recent conversations with top ten business schools, there is a distinct trend where students are not going for the degree at all -- only to build up their networks and go dot.com. The quality of education is not even an issue -- there is only one goal -- access to elite social business networks. If these schools could not provide this access they would not be chosen. Imagine anything you like that gives the owner "social position" and you will be close to the meaning of positional good. For a while, everybody "had to own" net stocks -- or had to "get in on" the IPO game. However, the IPOs owed most of their value to the scarcity of supply, and we now see what happens a few months down the road.

To: Sam Citron who wrote (100394)	4/13/2000 4:03:00 PM
From: dbblg	Read Replies (1) \| Respond to of 164684

OT AFAIK, the term was coined by Fred Hirsch, in his book (from sometime in the 1970s, I think) Social Limits to Economic Growth. Hirsch (sp?) drew a distinction between material goods, which are subject to familiar market forces like economies of scale and decreasing marginal cost of production, and positional goods, which are intrinsically limited. The classic example of a positional good is the house with a private beach. (Limited supply, value diminishes if everyone can picnic there.) For the reasons you mention, education is a problematic example; investment banks ensure that stocks never last long as positional goods. (And I would argue that the knowledge that demand will beget supply, at least in the US, means that investors never value stocks as positional goods.) (Hirsch's argument, if you are interested and if I am remembering it right, was that in affluent societies people care about positional goods, so the increasing wealth generated by market economies doesn't improve people's lives. Instead, they have to generate more and more economic activity just to maintain access to the same level of positional goods, and this makes them unhappy. I'm not terribly sympathetic to the argument, though I think the distinction between material and positional goods can be useful in certain circumstances.)