NS essay - The honours system, far from being abolished, should be hugely expanded

In our society, high status depends too much on money. We need more diverse ways of sharing out este

It is a question as old as time. Where do I stand? What does the pecking order look like? Who's up, who's down? Our desire for - and fascination with - status is insatiable. We want to be top dog, or at least to know who the top dog is. This is why our media are full of lists: the most fanciable, eligible or rich; the 100 most powerful women, politicians or corporate leaders. We are suffering from listitus. We place our own position under constant surveillance. Even if we don't make it on to the Rich List, we cannot help but compare ourselves to others, especially those close to us. And it often does not bring out the best in us. "Whenever a friend succeeds," lamented Gore Vidal, "a little something in me dies."

The seeking of status can seem, to idealistic minds, a regrettable and grubby habit. But it can't be wished away. It is hard-wired into our genes. There has never been a human society without status differentials. Revolutionary attempts to dissolve the desire for status never succeed. After the French revolution, all men were "Monsieur". The term then became meaningless and other symbols of status came to the fore.

Status-seeking does have a positive aspect: generally, priority in the pecking order goes to those whose behaviour has been for the good of society as a whole. But contemporary, affluent societies have two big problems with status. The first is that people of low status are paying a higher price, in terms of health, happiness, opportunity and self-image, than before. Michael Marmot, professor of epidemiology and public health at University College London, reports in his Status Syndrome (2004) that those in the highest social class live nine and a half years longer than those at the bottom. In all categories of disease, there is a sharp social gradient. And Marmot shows that "lifestyle factors", such as diet, smoking and exercise, account for just around a third of the gap. Marmot acknowledges that the health gap is a feature of all societies, even baboon colonies, according to some evidence. But over the past three decades, the gap in the UK has widened: in the 1970s, the life expectancy differential was only five and a half years. Low status has become a more terminal condition. Research by Helen McCarthy at Demos shows that self-esteem is also lower in the bottom social classes.

The second, deeper problem is that there is now a mismatch between the attributes associated with high status and the attributes that will best serve society as a whole. Our status system is past its sell-by date and needs replacing. Status continues to attach to money in societies where capital accumulation is of marginal importance. Yet greed isn't good any more.

This disconnection is - or should be - a political issue. As Alain de Botton writes in Status Anxiety (2004): "Status ideals have long been, and may again in the future be, subject to alteration. And the word we might use to describe this process is politics." De Botton points out that status has been awarded to those with skills useful to a particular society at a particular time: military skill and bravery in ancient Sparta, the ability to kill jaguars in the Cubeo Amazonian tribe, or entrepreneurialism in industrialising England. Status is awarded according to whether a society needs military defence, animal protein or capital.

We have to ask, then, whether our status system contributes to the satisfaction of vital contemporary needs. The evidence suggests not. The key element of our social ranking is money, which, de Botton argues, "is imbued with an ethical quality. Its presence indicates the virtue of the owner, as do the materials it can buy. Like jaguar teeth for the Cubeo, a prosperous way of life signals worthiness, while the ownership of an ancient car or threadbare home may spark suppositions of moral deficiency."

The equation of wealth with status is not automatic or absolute. You can gain some status from rejecting materialism and "downshifting". Occupation, education, sporting ability or artistic sensibilities can all act as markers of status. The Oxford don living in a modest flat is not obviously lower in status than the sales director with an "executive home". Marmot - himself knighted for his work on the impact of status - suggests that scholars are indeed as status-conscious as commodity traders: "Like most academics, my self-esteem or my status in the eyes of others has little to do with the size of my car, for example . . . this does not mean academics are insensitive to where we stand in the hierarchy, however. Far from it. Whether it is a paper for publication or a grant application, invitation to a meeting, election to a professional body . . . We simply choose the hierarchy that is important to us."

In other circumstances, people may feel obliged to choose a different status system from one based on money, for a blunter reason: they don't have any money. The result is often considerably more harmful to society than the dons' jostling for grants. Research by Robert J Oxoby of the University of Calgary, published in the Economic Journal, suggests that people who are failing against mainstream measurements - especially in terms of money and employment - suffer from "cognitive dissonance". In other words, they are miserable about the gap between what they are and what they are expected to be.

"Individuals with low income," Oxoby argues, "suffer from an inconsistency between their pursuit of status and the status awarded to them. To alleviate their dissonance, these individuals may either commit greater resources to status-seeking or change the characteristic they subjectively deem status-worthy."

So disadvantaged people can, on the one hand, work very hard at looking for a job, go to night school to upgrade their skills, or keep away from drugs and crime in an effort to make the grade. Or they can decide, quite rationally, to ditch mainstream status norms in favour of yardsticks within closer reach. This might involve gang membership, criminal activity or violence as short cuts to status within their own culture. We simply choose the hierarchy that is available to us.

Yet complete escape from materialist measures is almost impossible. Even in (perhaps especially in) financially disadvantaged groups, the ostentatious flouting of money, or the things money can buy, is widespread. Crime often appeals precisely because it does pay. In such circumstances, government action should be aimed at increasing the attachment to mainstream norms: Oxoby cites Labour's new "baby bond" as exactly such an example.

Even those who have apparently opted for "higher" measures of status such as learning or public service are rarely free of financially mediated success measurements. Even successful journalists, authors and academics - who tend to earn less than those "in trade" - can suffer from what the US social commentator David Brooks calls Sids, or Status-Income Disequilibrium Syndrome. The condition strikes after a top national newspaper journalist dines with friends who have boring jobs in the City; they then take a cab to a town house in Holland Park, while the hack catches the No 15 bus to a garret in Hackney.

The classic defence against Sids is snobbery, but that still reveals concern about the distribution of material rewards. Joseph Epstein, in his recent essay on envy, captures the indignation: "Why does some ignorant lawyer have enough money to buy a villa in Tuscany when one knows so much more about the art of the Italian Renaissance? What kind of society permits this state of things to exist? A seriously unjust one, that's what kind."

The villa in Tuscany is, in a sense, beside the point. It is an agreeable thing to have; but the status point is that the lawyer has the money to buy it. It is conspicuous consumption - and in status terms, there is no point consuming quietly, unless you can find ways to communicate the quietness. It is the rung you occupy on the ladder that matters, rather than what life on that rung is like. In countless surveys, people say they would prefer to earn £50,000 in a society where £40,000 is the average income than £100,000 in one where £120,000 is the norm. Money is a signal of rank.

In a society that needs more money, this status system makes perfect sense. Yet once a certain level of affluence is reached, more money or accumulation of material possessions makes little or no difference to happiness, or quality of life. So a status system that was ideal for the 18th, 19th and (most of) the 20th centuries is now out of kilter. The person with the flashier car, or bigger house, is rarely much happier or more comfortable than we are. "If we cannot stop envying," writes de Botton, "it is especially poignant that we should spend so much of our lives envying the wrong things."

Would it make a difference if we could wipe out the male sex? It does seem, anecdotally and from research evidence, that men are the real status-seekers. Men care more about money, and about stuff: the toys tend to belong to the boys. Marmot argues that men are largely responsible for status hierarchies because of the evolutionary requirement to beat off attackers and rivals to secure the most or the best females to mate with. So why does women's health also vary according to their social status? Marmot's explanation is that women pay the price for men's status-seeking: "Men may have created the hierarchies in society, but women suffer their consequences as well as men. Women are, so to speak, caught in the slipstream of male hierarchies."

Judging by this view, the feminisation of society will rid us of much of the social wreckage created by status-seeking. But the argument feels wrong. Nobody could argue that teenage girls don't care about status. Women may sometimes compete on different grounds to men, but it is not obvious that the competition is less intense. And while the evolutionary explanation would point to women seeking status merely in order to secure a high-status male, there seem to be plenty of women who seek high status, full stop. So our working assumption has to be that status will always be sought - and that the goal of progressive politics should be to make the competition as beneficial as possible, for both the individual and society.

How can this be done? First, we can try to dilute the impact of status on life chances. Status will always matter - but it should not, at least in the 21st century, be a matter of life or death. The steepening of the health gradient is a sign that status has come to matter too much. As Marmot rightly argues, "the mere existence of hierarchies does not, itself, produce the health gradient. The health gradient arises because of what position in the hierarchy implies in a given society."

Given that money is at present the main currency of status, we could reduce the costs of low status by reducing the gap between rich and poor, or between bottom and middle. This gap is made worse by the way in which disadvantages in education, housing, employment, social support networks and mobility tend to reinforce each other - a sort of domino effect. The government tries to tackle this by, for example, ensuring high standards of schooling and healthcare in poorer areas. However, it will take something more aggressive and sustained than a handful of "action zones" to undo the effects of the past 25 years.

While the language of "self-esteem" feels worryingly West Coast (only in California could there have been a Task Force to Promote Self-Esteem and Personal and Social Responsibility), we do need to think of how we can offset the corrosive effect of status hierarchies on confidence, optimism and self-reliance. Robert Fogel, a Nobel prizewinning economist, has sketched a series of "great awakenings" to the idea of equality in US society: the 18th-century proclamation of spiritual equality ("all men . . . are endowed by their Creator with certain unalienable rights", as the Declaration of Independence was to put it); a 19th-century call for equality of opportunity; and a 20th-century concern - Fogel dubs it "modern egalitarianism" - with material and economic differences. What is required now, he argues, is a "postmodern egalitarianism", based on a wider distribution of "spiritual resources", or capacity for personal development.

When Tony Crosland, in The Future of Socialism (1956), proposed therapy as a policy response to poverty, he was roundly criticised for it. And nobody wants state-organised group hugs or council-run counselling. However, it would be wrong to ignore the emotional and personal consequences of the status system.

The second approach is to shift the prevailing status norms away from the cash nexus. To both society and individuals, the pursuit of material goods yields diminishing returns. One of the great tragedies of materialistic societies is that people become accustomed to a higher level of affluence very quickly and begin measuring themselves against a new set of neighbours - and end up no happier. The competition for financial status brings the benefits of economic growth and product innovation - but in social terms it is hugely wasteful. If we are to compete for higher status, it would be better to conduct the struggle in domains that bring greater benefits.

Imagine if being well-read had a greater status than being well-paid: people would rush to read great literature. Some people would read more, and learn more, than others. A hierarchy would emerge. Yet even the people who ended up at the bottom of the pile, managing Tolstoy but not Dostoevsky perhaps, would be better-off than before. If the acquisition of non-market skills and knowledge - what Richard Sennett has dubbed "craftwork" - packed a bigger punch in the status stakes, we'd all be better off.

Finally, we could create more opportunities to award status. It is easy to mock "employee of the month" awards, "most improved" player prizes and the avalanche of awards handed out in the business world. About 18,000 awards events take place each year in the UK, and the awards industry - which even has an annual event to give awards to the best awards - is worth £200m a year. Journalism itself has prizes for every conceivable category of media. (Cynics have suggested that this is just a means of ensuring job security, because it is hard to fire an "award-winning journalist". As a former "Young Financial Journalist of the Year", I can confidently refute this claim.) All this awarding is to the good. Opportunities for an individual, community or firm to gain some status should be applauded.

True, status is what Fred Hirsch called a "positional good": it is valuable, by definition, only if it is limited. We can't all win the game. It is therefore nonsensical to think about "redistributing" status. However, we can increase the number of domains in which people can acquire it. You might be a loser at work, but Gardener of the Year in your home town; a terrible athlete but committed charity worker; a bad father but Employee of the Year at the office. Far from being abolished, the honours system should be hugely expanded. Local and regional gongs could be introduced, new categories of medal invented and ceremonies held at every possible opportunity.

Status counts for a great deal, and is likely to do so for the foreseeable future. As well as mitigating the social effects of low status, and jettisoning a status system built for getting us to affluence rather than enjoying it, we should be aiming to create a culture of celebration in all walks of life. We are supposed to live in a plural society. What we need now is more plurality in the ways in which we can take our place within it. All should have prizes.