This may provide an interesting insight. Any essay that starts by quoting Mencken can't be a total waste.

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Out of position: Against the politics
of relative standing

Will Wilkinson
Click here for PDF version

Zero-sum positional conflict is avoidable in a liberal market society, argues Will Wilkinson

HL Mencken once quipped that, ‘a wealthy man is one who earns $100 a year more than his wife’s sister’s husband.’ Writing last April on the definition of poverty in The New Yorker, journalist John Cassidy takes the logic of Mencken’s satire of low-grade ressentiment fully seriously and plumps for its liberal application to public policy. Cassidy argues that it is indeed a hardship to make less than your wife’s sister’s husband—or your co-worker, your next door neighbour, or anyone within the same national boundaries—and proposes that for the purposes of government ‘poverty’ be defined in terms of relative rather than absolute deprivation. In particular, he suggests that the poverty line be set at half the value of the median income. ‘If poverty is a relative phenomenon,’ Cassidy writes, ‘what needs monitoring is how poor families make out compared with everybody else, not their absolute living standards.’ [1]

While capitalism does in fact produce absolutely egalitarian results—enabling the poor to own high-quality mobile phones, microwaves, and cars functionally equivalent to those of the wealthy—it cannot, critics say, manufacture more and better ‘positional goods’, to use economist Fred Hirsch’s term, because, basically, it is impossible to fit more than ten percent in the top ten percent.[2] No matter how trusty, safe, comfortable, and efficient your new Hyundai Accent may be, the fact that is within the grasp of so many will keep it from signaling that you inhabit the commanding heights of society. And that’s what you really want, isn’t it? To be king of the mountain?

Policy arguments like Cassidy’s that pivot on the alleged importance of relative position rather than absolute opportunity and wealth, are now much in vogue—on the left, at least. The politics of relative position is the egalitarian welfare statist’s new favorite game. Richard Layard, head of the London School of Economics Centre for Economic Performance and member of the British House of Lords, argues that considerations of relative position justify regulating and even censoring advertising, for it makes us feel bad to see people who own things we cannot afford, and even if we can afford them, having them wouldn’t make us happy.[3] British epidemiologist Richard Wilkinson claims that low relative income is a direct cause of illness, and that equalising income redistribution ought to be reconceived as a ‘public health’ measure.[4] Cornell University economist Robert Frank argues in rigorous detail for a steep consumption tax designed to dampen the alleged enthusiasm for zero-sum status races through the display of opulence.[5] ‘Every time [some people] raise their relative income (which they like),’ Layard writes, following Frank, ‘they lower the relative income of other people (which those people dislike). This is an “external disbenefit” imposed on others, a form of physical pollution.’[6] The solution? Slap a tax on ‘the polluting activity’—you and me working hard to get a raise—in order to get us to play more and produce less.

Are these arguments any good? Does our taste for relative position help vindicate egalitarian social democracy? The answer is no. A more benign and scientifically adequate picture of human nature, together with a more up-to-date notion of ‘externalities,’ show the politics of relative position to be a non-starter.

more: http://www.cis.org.au/policy/spring_06/polspring06_wilkinson.htm