If the search is for examples that contradict the predictions of standard economic models, a good rule of thumb is to start in France.

All parents want to send their children to the best possible schools. But because a good school is a relative concept, a family cannot achieve its goal unless it outbids similar families for a house in a neighborhood served by such a school. Failure to do so often means having to send your kids to a school with metal detectors at the front entrance and students who score in the 20th percentile in reading and math. Most families will do everything possible to avoid having to send their kids to a school like that. But because of the logic of musical chairs, they're inevitably frustrated.

When the economic pie grows larger, it's always possible for everyone to have a larger slice than before. So it's really in all of our interest to make the economic pie larger by eliminating waste whenever and wherever possible.

Unless we can act collectively, there would be no way to defend ourselves, no way to define or enforce property rights. We couldn't curb congestion or pollution or build and maintain public infrastructure.

Life is graded on the curve. It's not how big you are, how strong you are, how smart you are. It's how good you are at the things that count relative to the people around you.

For the three decades after WWII, incomes grew at about 3 percent a year for people up and down the income ladder, but since then most income growth has occurred among the top quintile. And among that group, most of the income growth has occurred among the top 5 percent. The pattern repeats itself all the way up. Most of the growth among the top 5 percent has been among the top 1 percent, and most of the growth among that group has been among the top one-tenth of one percent.

When the rich build bigger, they shift the frame of reference that shapes the demands of the near rich, who travel in the same social circles. Perhaps it's now the custom in those circles to host your daughter's wedding reception at home rather than in a hotel or country club. So the near rich feel they too need a house with a ballroom. And when they build bigger, they shift the frame of reference for the group just below them, and so on, all the way down.