If Warheads Were Dessert, Arms Races Would be Delicious

David Brooks once wrote a column based on an astonishing sociological insight seldom noted by teenagers to the effect that not conforming is just another way of conforming when you do it in the way everyone else is doing it, say, by getting a tatttoo. Opting out is hard! Robert Frank noted this dynamic with the bygone multiple piercing fad in What Price the Moral High Ground. As whatever it is that having a piercing signals gets diluted by widespread adoption, you need more more bangles in holes to get the signaling job done. Frank says something about this costly race subsiding as norms against “bodily mutilation” kick in. That sounds wrong. What kicks in, I think, is a kind of signaling backfire — the “trying too hard” phenomenon. If you're out toward the right tail of the piercing distribution, you can attempt a kind of counter-signaling: “I'm not in fact trying too hard; I look this way because I seriously don't give a f*ck what you think,” but it takes a very special person to make this work. People who invested in the signal early, before it got noisy, generally just drop it and search for something else. 
But let's back up a second. Frank is right that it seems like there is a kind of waste here. If some kind of truce could be established in the form of a norm that that three, but no more than three, piercings is maximally edgy, people could signal precisely the degree of edginess desired without fear of signal dilution and the costs of an escalating arms race. But in cases where the goal is to signal willingness to deviate from widespread social norms, it seems that additional widespread social norms regulating the pursuit of this goal can't possibly be stable.
This obviously relates to the paradox of the avant garde, which I spent way too much time thinking about when I was an art student back when giants like Kurt Cobain walked the Earth. Each new shocking work intended to jar the bourgeousie out of their dull complacency only further desensitizes the burghers and hausfraus until even churchgoers and patriots become well-nigh unshockable and the game is used up. So, like a guy who affiliates with a community of tattoo afficianados among whom it doesn't look like he's trying too hard (and who provide an explanation), artists shift their frame of reference and create “the art world” and try to impress and dismay the denizens of that world — other artists, critics, collectors, hangers-on — with other kinds of limit-pushing. At some point, it seems, it became radical to paint figurative pictures in a traditional style and bisect sharks. It never ends! Think of the waste!
So how could a “truce” norm possibly work in this context? It couldn't, unless there is a prior implicit agreement to refuse to confer status upon those who satisfy, entertain, and stimulate with paradigm-shifting novelty, which is not forthcoming. Therefore, artists continue to angle for attention and praise by producing interesting things. Positional arms races do seem to exhaust lines of creation. Each envelope-pushing success imposes costs on competitors. These days Piss Christs and dung-smeared madonnas need media blitzkriegs to invent a minor hubbub. Blank canvases get no blanker, empty rooms no emptier, etc. But as long as there is prestige (money, too) to be won, the aesthetic search pushes into neglected corners and fresh frontiers. Like oil companies with ingenious new extraction techniques, artists unsuited to blazing new trails return to fields that had seemed tapped out, but weren't. The fecundity of these races is precisely in their norm-defying trucelessness.
Entrepreneurship, I think, is a lot like that.  Or, rather, that's an example of entrepreneurship at work. Something like this dynamic is behind a great deal of economic discovery in addition to artistic innovation. The supply of human creativity is too low. And status-seeking is probably a greater spur to creativity than even wealth-seeking. We need it. One argument against both taxes and certain social norms intended to limit positional competition is that they further reduce already undersupplied creativity. Of course, positional competition along certain dimensions — for political power, say — can be incredibly destructive and we'd be doomed without robust norms tighly regulating it.  But we should be careful about what exactly we are taxing, socially and fiscally.