Law, Social Norms and Class Rings

If you want a fascinating extra bit of legal reading between now and exams (hold onto your tomatoes, I’m going to tell you what the book is about so you don’t have to read the whole thing!), check out Law and Social Norms by Eric Posner. It’s of the law and economics bent, but I promise any and all readers who harbor political grudges against the field that this text is wholly apolitical. The book focuses on the phenomenon of signaling, which is just about everywhere all the time.

The idea is best distilled down to discount rates. We all deal with each other against a background of uncertainty. Can I trust the person who sits next to me in Fed Courts not to conk me over the head with our absurdly large textbook? If he offers to work with me on an outline, can I trust him to do his part? Do I think the cute girl six rows up is single and would welcome romantic attention? In each of those situations, there is an implicit discount rate associated with interacting with the person in question. If I trust the person, he has a low discount rate.  I am relatively certain that he will hold up his end of the bargain and therefore I don’t have to charge much of an uncertainty premium in deciding to deal with him. If I don’t trust the person, he has a high discount rate, and I will need a promise of greater value in order to enter the transaction.

Ever wonder why some people wear business casual to class every day? They are signaling that they have enough money and care for what you think to keep the khakis pressed and the dress shirts starched. Why do teenagers dress in ways certain to offend adults? They are signaling to other teenagers that they have a low discount rate for transactions with other teenagers by openly alienating alternative partners. Posner’s book is filled with more examples, all of which are thoroughly intriguing and thought-provoking.

With that idea in mind, let’s talk about class rings. As a member of the Class of 2012, I received a wonderful email from the Coop this week offering little old me the chance to own a Harvard class ring of my very own. Directed to this glorious little website for more details, I find that I am being given the chance to “Distinguish [My]self With a Glance” with a “symbol of excellence” that suits my “style, experience, and achievement.” (I searched for a symbol of excellence commensurate with writing snarky columns for The Record, but to no avail.)

What would I really be signaling by enshrining my unique style, experience and achievement in the form of an extra large, 18-carat, $1,646 yellow gold ring with a crimson gemstone and Harvard logos on it? Posner discusses the idea of conspicuous consumption. Some level of luxury spending can merely signal wealth and, implicitly, trustworthiness because a rich person is (a) logically less likely to cheat you in a transaction because they have a lower marginal utility for the next dollar and (b) statistically less likely to be a criminal. However, vulgar displays of bragging can have the opposite effect, signaling that you do not understand social conventions and are hence less trustworthy.

I suspect that the latter explanation is more likely in this case. We have all, of course, seen students who wear Harvard T-shirts, hats and sweatshirts as much as possible on the off chance that a passerby would not recognize them without a “symbol of excellence.” One imagines that these students, consciously or not, want to signal that they are intelligent, much more so than the office worker next to them on the T who went to Brandeis or the policeman in Harvard Square who went to community college. However, knowing a few people outside Harvard, I can assure the HLS community that such displays tend to raise your implicit discount rate by confirming to the people you meet that you are, in fact, an asshole.

Keeping that thought in mind, I recommend that you not buy a Harvard class ring. If you feel compelled to (or a loved one buys it for you), I recommend you keep it in a drawer somewhere as a private “symbol of excellence” rather than a public symbol of insecure blustering. And if you want further confirmation of my argument in this piece, think about how many times you have seen one of the Harvard alumni you respect most (e.g. Barack Obama or Mitt Romney) wearing a Harvard cap or ostentatiously displaying their ring finger in the hope that a mere plebian will gawk at their 18-carat H-bling.

John Thorlin is a 3L. His column runs Thursdays.

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