I understand the human penchant for categorizing things. We’re good at it. It's nearly automatic, and it's arguably a necessary survival skill. We cannot spend all of our time re-evaluating our understanding of every experience, every physical thing in the world, as though it were the first time. We need categories as a kind of cognitive shorthand – they let us wrap all we think we know about a set of things, place them in a little box, and add a label.
But when dealing with other people this quickly becomes socially corrosive. It is precisely because labels are shorthand – they stop us from new thought. We’ve already formed an opinion about the label the last time we used it, so the opinion just transfers to the next person, uncritically.
what is lost
When you use a label you are choosing, likely unknowingly, to not understand. All the nuance, the possibility that those labeled might have views that don’t fit into those neat little boxes, or haven’t fully figured out what they feel about an issue... that all goes away when the label shows up. We don’t see it anymore, and we stop thinking about it.
As you can imagine, this is most prevalent in politics and religion. You’re an X or a Y. The assumption goes that your label dictates your beliefs.
It’s a problem for the person labeled. But it is even more of a problem for the labeler. You deny yourself the opportunity for understanding. It’s quite likely that the person labeled either won’t hold quite the opinion you thought they did, or if they do, the reasons why they hold that opinion may be novel. You might learn something. Regardless whether it affects your opinion on the topic, it will very likely have an effect on your opinion of the person. I have had this experience myself. Looking for understanding is far more satisfying than the false certainty of those little boxes.
At a larger scale, labels inflame rhetoric and reinforce a sense of otherness. If someone labeled X disagrees with someone labeled Y, the easy reaction is "well, it must be because they're X and Y." Suddenly it becomes an issue of irreconcilable membership, not a nuanced discussion of values. Done frequently enough and labels can evolve into institutions, degrading the opportunities for collaboration and understanding.
From the other side of the looking glass, labeling yourself gives both others and yourself permission not to think deeply about why you hold certain opinions on a given topic. You put up a barrier to conversation and understanding - people will generally assume you have just adopted the party line. You may find that when you pull apart the positions and issues that are lumped into your label, you reach a point where don't really know the reasons behind your opinions on a certain topic. I know I've had to reevaluate the boundaries of certain positions I thought I had figured out. I have also seen this happen for other people, when I approach a discussion with the goal of understanding. If you can challenge them to think about it, you may both learn something.