I think it's slowly leading people to a deeper, more functional understanding of human individuality, which is something a lot of people pay lip service to but many don't really appreciate.
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"Slice them up more finely, and you only increase reliance on group identity for a sense of self" <-- See, I think the opposite. I think big-group identities are much more effective at submerging individualism, and that the evidence for this is overwhelming.
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Perhaps the big groups are more effective--it still suggests that the small groups also submerge individuality
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But less so. Big groups allow segregation. They allow you to immerse yourself in a sea of people whom you can assume to be just like you. But as a lithosexual or whatever, you can't hang out with only lithosexuals. Most people you meet will be outside your microgroup.
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You know what these microidentities are like? High school subcultures. The punks, the metalheads, the skaters. Those subcultures were an important part of the way my generation discovered their individuality. They were a key stepping stone.
End of conversation
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