Early work on human status just took humans to have a kind of status that stems from non-human status. Chimps, other primates, have dominant status. The assumption for a long time was that status in humans was just a kind of human version of this dominant status, but if you apply this gene-culture co-evolutionary thinking, the idea that culture is one of the major selection pressures in human evolution, you come up with this idea that there might be a second kind of status. We call this status prestige.
This is the kind of status you get from being particularly knowledgeable or skilled in an area, and the reason it's a kind of status is because once animals, humans in this case, can learn from each other, they can possess resources. You have information resources that can be tapped, and then you want to isolate the members of your group who are most likely to have a lot of this resources, meaning a lot of the knowledge or information that could be useful to you in the future. This causes you to focus on those individuals, differentially attend to them, preferentially listen to them and give them deference in exchange for knowledge that you get back, for copying opportunities in the future.
From this we've argued that humans have two separate kinds of status, dominance and prestige, and these have quite different ethologies. Dominance [ethology] is about physical posture, of size (large expanded chest the way you'd see in apes). Subordinates in dominance hierarchies are afraid. They back away. They look away, whereas prestige hierarchies are quite the opposite. You're attracted to prestigious individuals. You want to be near them. You want to look at them, watch them, listen to them, and interact with them. We've done a bunch of experimental work here at UBC and shown that that pattern is consistent, and it leads to more imitation. There may be even specific hormonal profiles with the two kinds of status.The evolution of status prestige explains the emergence and roles of the shaman -- which itself evolved into priests, poets, singers, actors, etc. -- alongside the dominant status alphas. If we include good hunters, innovators of various sorts, entrepreneurs, etc., we can see an ever-expanding number of those who are able to gain status prestige. Further, as prestige status has come to dominate in humans, the dominance status individuals have had to learn to act more and more like status prestige individuals. This is where the cult of personality comes from in politics. And it is where the tension between a political (or business) leader both needing the people under him to both love and fear him comes from. Chimpanzee alphas who only have dominant status only need to ensure fear.
The dominance of prestige over dominance status is what makes complex spontaneous social orders possible. While there can be only one dominant alpha, one can gain prestige in one narrow area of life, and thus not have to compete with others for that prestige. Perhaps prestige status drove specialization; specialization, in turn, drove the emergence of ever more complex social structures. The emergence of this kind of prestige thus allowed humans to interact in increasingly complex ways with more and more people, until our spontaneous social orders emerged.
Read the entire piece. He provides support for spontaneous orders in general, free markets in particular, and why rule of law is important (and emerges). Of particular note is this observation about markets:
Markets require a great deal of trust and a great deal of cooperation to work. Sometimes you get the impression from economics that markets are for self-interested individuals. They're actually the opposite. Self-interested individuals don't specialize, and they don't take it [to market], because there's all this trust and fairness that are required to make markets run with impersonal others.This is the argument supporters of free markets need to make.