>What if people didn't try to make money to satisfy their own wants, but to one-up their neighbors in the pissing match of life?
This premise contradicts itself. Wanting to use your money to one-up people IS a want. You’re simply judging what some people might want. I’m not saying some people don’t want that, or that it’s not worth being judgemental about, but it entirely undermines your point.
It behaves very differently from an economic perspective, though. Normally, when you trade away money to satisfy a want, you no longer have that money. That's what lets us speak of things like the velocity of money, time value of money, indifference curves, indeed the whole idea of being able to "value" goods and services because a currency of known & roughly constant value was traded away to obtain them.
If you're just interested in money as a score or means of signaling social status, you continue to have that money while deriving value from it. There are other systems that have this property - notably, productive assets (you can continue to derive income from land or capital without trading away that asset) and social status itself (bestowing some of your status on others near you actually raises your status, it doesn't give it away). But these systems function with very different dynamics than the classical competitive markets you'd study in Econ 101, or that TFA is describing. In particular, they're subject to positive feedback loops and winner-take-all results rather than equilibriums and stable prices that competitive markets produce.
Any form of investment is a positive feedback loop, and doesn’t produce some bizzare are ‘winner takes all scenario’. To the point made in the parent comment, wanting to buy a Wraith as a status symbol is a want just like any other, and is not a symptom of a dysfunctional market. Consumerism in general isn’t a symptom of a dysfunctional market, and I’d be willing to bet that the majority of the people who comment on HN derive their income from consumerism in one way or another. The nature of investments isn’t a symptom of a dysfunctional market either, for an asset to be productive it has to be generating some value, if an individual invests in an asset, they will never benefit from 100% of the productivity of it. The assets they invest in the economy will be generating income and wealth for others too, if we’re talking about a particularly wealthy individual, then it will be thousands of others. I’ve worked at plenty of funded startups, in each of those situations, the wealth of such individuals has been directly paying my salary.
"Wanting to buy a Wraith as a status symbol" isn't the scenario I'm positing. "Wanting to have a million dollars in the bank" or "wanting to be a billionaire" or "wanting to make 1000x on cryptocurrency holdings" is. There's a key difference - in the former case, a transaction has occurred, and now Rolls-Royce is $350k richer. In the latter case, no transaction occurs - the person's enjoyment is derived entirely from the number on their bank statement, not from any product that they bought with that number.
If their money is in the bank, you can almost guarantee that it’s being productive. If they withdraw all of it so they can keep a huge pile of cash in their house to look at, then your argument would hold. But the system highly incentiveses people to not do that.
This premise contradicts itself. Wanting to use your money to one-up people IS a want. You’re simply judging what some people might want. I’m not saying some people don’t want that, or that it’s not worth being judgemental about, but it entirely undermines your point.