I think about inequality a lot. But I also think about the middle class a lot, which isn’t quite the same thing. Generally, my sympathies lie with the “least advantaged” or “subaltern,” but I also feel the pull of the American cultural commitment to the middle class.
There can be little doubt that we are seeing a dissolution of the middle class, and this often seems a tragedy. Indeed, my favorite financial guru, Elizabeth Warren, put it like this:
“A middle class where people are falling out and into poverty is a middle class that has less room to bring people up and out of poverty.”
And yet, data going back to 1970 indicates that more people are failing to remain in the middle class due to wealth than due to poverty:
the entire reason the middle class has “shrunk” is that more households today have incomes that put them above middle class. That’s right, the share of households with income that puts them in the middle class or higher was 76 percent in 1970 and 75 percent in 2010—two figures that are statistically indistinguishable. For that matter, I am not discovering fire here; Third Way made the same point in early 2007 (page 7).
As Third Way put it in 2007:
The bottom line is that the middle class is shrinking but not because the bottom is dropping out; it is because more people are better off.
Now, let’s be clear: the two middle quintiles of income will always be populated by 40% of the population, so in some sense there will always be a “middle.” But increasingly this group will not be a class.
Alan Kreuger defines the middle class “as having a household income at least half of median income but no more than 1.5 times the median.” And the incomes statistics suggest that it is increasingly difficult to tread water this close to the median income: either you sink below it, or you rocket above it. But compared to 1970, more people are rocketing above it than sinking below it. (As Warren points out, this is largely a matter of women in the workforce: a couple with two incomes is too rich for the middle-class, and couples and single folks with only one income are too poor for it.)
Many different kinds of inequality compete for our attention when we discuss the politics of fairness. For instance, as Tyler Cowen has pointed out, the difference between the top 1% and the rest of the top quintile is largely what has driven the growing inequality over the last thirty years:
the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007. As noted, those figures are from pre-tax income, so don’t look to the George W. Bush tax cuts to explain the pattern. Furthermore, these gains have been sustained and have evolved over many years, rather than coming in one or two small bursts between 1974 and today.
But this inequality is distinct from the inequality that has afflicted the bottom 50% of the income spectrum:
At the same time, wage growth for the median earner has slowed since 1973. But that slower wage growth has afflicted large numbers of Americans, and it is conceptually distinct from the higher relative share of top income earners. For instance, if you take the 1979–2005 period, the average incomes of the bottom fifth of households increased only 6 percent while the incomes of the middle quintile rose by 21 percent. That’s a widening of the spread of incomes, but it’s not so drastic compared to the explosive gains at the very top.
And even this may conceal accounting effects and the inequality that emerges as the US population ages and some among us become better educated. It is at least plausible that there has been no meaningful growth in the inequality of the 99% at all:
Attacking the problem from a different angle, other economists are challenging whether there is much growth in inequality at all below the super-rich. For instance, real incomes are measured using a common price index, yet poorer people are more likely to shop at discount outlets like Wal-Mart, which have seen big price drops over the past twenty years. Once we take this behavior into account, it is unclear whether the real income gaps between the poor and middle class have been widening much at all. Robert J. Gordon, an economist from Northwestern University who is hardly known as a right-wing apologist, wrote in a recent paper that “there was no increase of inequality after 1993 in the bottom 99 percent of the population”, and that whatever overall change there was “can be entirely explained by the behavior of income in the top 1 percent.”
What we see, then, is a world where the rich have gotten much richer and the poor and median incomes have been relatively stagnant.
I agree with Cowen that the first trend is largely driven by financial engineering (“going short on volatility” and expecting a bailout when those bets don’t pay off) that appears to be negative-sum: the very richest get richer not through work but through arbitrage and winner-take-all approaches to the markets, and they do so by putting the brakes on the rest of the economy. In other words, the problem is financial capitalism, and it requires a response rooted specifically in managing the banking, insurance, and real estate sectors of the economy. (This is the so-called FIRE economy.)
But what about the second non-trend? The largely stable infra-99% inequalities somehow disguise the “dissolution of the middle class.” Or do they?
Game theorists like to joke about the “race for second place”: if the winner realizes she’s winning, she has to slow down, which creates a weird disequilibrilizing competition. In decision-theory, this is called “satisficing” and it is opposed to “maximizing.”
Tyler Cowen refers to people who satisfice on income as “threshold earners,” a group that I certainly belong to:
It is also the case that any society with a lot of “threshold earners” is likely to experience growing income inequality. A threshold earner is someone who seeks to earn a certain amount of money and no more. If wages go up, that person will respond by seeking less work or by working less hard or less often. That person simply wants to “get by” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.
There is plenty of evidence that the richest quintile is full of people who have enough and are unwilling to work any harder to get more. Consider exhortations to “chill” that are quite popular among the upper-middle class.
abandoning the quest for the ideal in favor of the good-enough. It means stepping off the aspirational treadmill, foregoing some material opportunities and accepting some material constraints in exchange for more time to spend on relationships and experiences.
These are folks who were competing for second place, and, having rocketed out of the middle class, have chosen to take more time off. This behavior certainly expands the income inequality between the richest 1% and the rest of the top quintile. But should it bother us?
Now, we all satisfice, i.e. chill, all the time: even the serial entrepreneur satisfices on non-monetary goods: she has a “good enough” marriage, a “good enough” exercise routine, etc. But we’re not proud of this in the same way that so many Americans are proud about being middle class. We don’t all brag about how we get away with giving our spouse “just enough” attention or how we’re “phoning it in until retirement.” Why not? Because we belong to a culture that doesn’t value income-as-such. But when you’re poor, money does buy a measure of happiness, so why do we take such joy in making less simply because we don’t need it? Resources in excess of need can always be given to those who need them more, either through voluntary charity or state-run cash transfers (i.e. taxing and spending.) To my mind, the reality of satisficing is largely selfish.
I suspect these little exhortations to “chill” are not in fact designed to change anyone’s behavior. Rather they’re a kind of self-congratulation. “Look at me! I’m rich and I don’t work very hard!” Last time I checked, the word for self-congratulatory idle rich folks? “Parasites.” In that sense, ”medium chill” is just another way of saying “I got mine.”
Congrats! You won the genetic, educational, and financial market lotteries! You bought low and sold high! To say that the middle class is “losing the race for second place” is to point out that, despite their efforts to “chill” they just can’t help getting ahead. The problem is privilege, and structural inequality, and a changing global economy.
That’s why I tend to think that we ought not to worry so much about losing the race for second place through the enrichment of the middle class. We should focus on the poor, many of whom don’t even figure in national inequality numbers because they don’t live in this country: they belong to the “Bottom Billion” who live outside the US on less than $1 a day PPP.
Now, the strongest argument in favor of a domestic middle class (and a massively reduced upper class) is Elizabeth Anderson’s argument for “relational equality,” sometimes also called “democratic equality.” If we prioritize political participation over a more general account of capabilities, then we might worry less about the material well-being of the poorest and more about their capacity to participate as equals in the self-governance of our democracy. But I’ll save that for another day.
Martin Luther King, Jr. on direct action:
In any nonviolent campaign there are four basic steps: collection of the facts to determine whether injustices exist; negotiation; self purification; and direct action. We have gone through all these steps in Birmingham. There can be no gainsaying the fact that racial injustice engulfs this community. Birmingham is probably the most thoroughly segregated city in the United States. Its ugly record of brutality is widely known. Negroes have experienced grossly unjust treatment in the courts. There have been more unsolved bombings of Negro homes and churches in Birmingham than in any other city in the nation. These are the hard, brutal facts of the case. On the basis of these conditions, Negro leaders sought to negotiate with the city fathers. But the latter consistently refused to engage in good faith negotiation.
Then, last September, came the opportunity to talk with leaders of Birmingham’s economic community. In the course of the negotiations, certain promises were made by the merchants–for example, to remove the stores’ humiliating racial signs. On the basis of these promises, the Reverend Fred Shuttlesworth and the leaders of the Alabama Christian Movement for Human Rights agreed to a moratorium on all demonstrations. As the weeks and months went by, we realized that we were the victims of a broken promise. A few signs, briefly removed, returned; the others remained. As in so many past experiences, our hopes had been blasted, and the shadow of deep disappointment settled upon us. We had no alternative except to prepare for direct action, whereby we would present our very bodies as a means of laying our case before the conscience of the local and the national community. Mindful of the difficulties involved, we decided to undertake a process of self purification. We began a series of workshops on nonviolence, and we repeatedly asked ourselves: “Are you able to accept blows without retaliating?” “Are you able to endure the ordeal of jail?”
King’s recipe for direct action is a kind of gold standard. Still, it may have its weaknesses: there is no definition of “justice” in place, nor standards of appropriate patience with negotiation, or justification for the strict pacificism. Whenever I teach the Letter from a Birmingham Jail, I remind my students of Condoleezza Rice’s father:
“My father was very clear about why he wouldn’t [march],” Rice says. “My dad was not someone who you would strike with a billy club and he wouldn’t strike back. It just wasn’t in him.”
In what sense is this sense of self-respect a failure of “self-purification”? Too often references to King and Gandhi are used as a cudgel against activists. Even King himself!
You may well ask: “Why direct action? Why sit ins, marches and so forth? Isn’t negotiation a better path?” You are quite right in calling for negotiation. Indeed, this is the very purpose of direct action. Nonviolent direct action seeks to create such a crisis and foster such a tension that a community which has constantly refused to negotiate is forced to confront the issue. It seeks so to dramatize the issue that it can no longer be ignored. My citing the creation of tension as part of the work of the nonviolent resister may sound rather shocking. But I must confess that I am not afraid of the word “tension.” I have earnestly opposed violent tension, but there is a type of constructive, nonviolent tension which is necessary for growth.
Questions for Martin Luther King, Jr Day: When is non-violent direct action justified? Is violent direct action ever justified? If so, when? Should activists always restrict themselves to the actions that would be acceptable if used by their political opponents? Should pro-life activists Occupy Abortion?
I tried to get tickets after I saw this New York Times piece, but no luck.
“I am not throwing away my shot” is just an awesomely perfect refrain: it refers to ’reserving and throwing away’ the shot in a pistol duel: deliberately firing into the ground in order to make a merely symbolic gesture of courage. It was early American custom to fire until satisfaction: this could mean until one duelist was unable to continue, or until the mutual exchange of volleys had so spooked one of the parties that they acquiesced, usually through their second, to whatever half-hearted apology was offered. Death was very rarely the result: most opponents would be satisfied with whatever face-saving injury they managed to inflict or sustain in the first three volleys, especially because of the legal and social repercussions of committing a murder in a country that viewed dueling as a European extravagance.
More honor could be lost by stubbornly refusing to accept a negotiated settlement and thus killing a man than might have been at stake in the original insult. The desire to maintain decorum even in the midst of violence required participants to restrain their rage or bloody-minded vengefulness. Today we see a similar judgment in the opprobrium heaped upon those who ‘kick a man while he’s down.’ A defeat suffered with aplomb is better than a victory sullied by distasteful displays of man’s base instincts. However, Alexander Hamilton supposedly did ”throw away his shot” in the duel with Aaron Burr:
I have resolved, if our interview is conducted in the usual manner, and it pleases God to give me the opportunity, to reserve and throw away my first fire, and I have thoughts even of reserving my second fire.
Thus Hamilton claimed that he would take at most one or two shots at Burr. His first shot was a deliberate miss. Since Burr’s responding shot killed him, we can’t know what he would have done for the second round. The noted traitor Burr is said to have responded to the allegation that Hamilton never intended to fire upon him with a laconic, “Contemptible, if true.”
Previously: Hamilton Mixtape. I cannot wait for this album!
(Video autoplays, so I’ve placed it below the “read more…”)
(Caveat Lector: I am not a conservative. However, recent reflections on institutional experimentation have reminded me of some of the virtues of the philosophical movement that goes under that name.)
With the publication of The Reactionary Mind, Corey Robin has taken up Phil Agre’s old point that conservatism is the defense of aristocracy and privilege. As he puts it in an interview with Daniel Larison:
Conservatism is an inherently counterrevolutionary philosophy and politics, born in reaction and backlash. [...] What form will the reaction against these revolutions take? Here is where it gets really interesting, for as I argue in the book, conservatives and counterrevolutionaries often take their cues from the very revolutions they oppose. They mimic the tactics of the revolution, they ape the rhetoric, and most interesting of all, they often incorporate the very categories and idioms of the revolution, often in ways that they themselves are only dimly aware of. Conservatives can often sound like the most rabid revolutionary because, as they come to realize, you have to fight fire with fire.
This seems to me to be completely wrong. Too often, the sniping among elite representatives of liberalism and conservatism allows partisans to take pleasure in turning factual disputes into principled differences. Even Brian Leiter, who I generally agree with on these matters, criticized the conservative intellectual tradition recently, claiming that most are “are intellectual lightweights and dilettantes” and that only Burke and Hayek are worth reading. Worse:
“I strongly suspect that if he weren’t the canonical opponent of the French Revolution, even Burke would not be much read anymore (in a century that included David Hume, Immanuel Kant, and Adam Smith, why would anyone even notice Burke except for his conservatism?).”
Are we back to claiming that Hume was a closet Whig? Fine. But surely Burke’s conservatism is valuable, too. Here is a list of conservative insights I put together for my students when teaching the Burke/Paine debate last semester:
- Society is irreducibly complex and cannot be redesigned from an armchair: for every well-meaning policy, there will be unintended consequences. (If you don’t understand the initial reasons for a policy, don’t eliminate it!)
- Populists often deceive the least advantaged with empty promises in order to win political power. (Beware of egalitarians driving fancy cars!)
- Most rich people didn’t work hard, but that doesn’t mean we should disparage hard work. (We should disparage unearned wealth and the exploitation that created it!)
- Inequality is bad, but it may be unavoidable: symbolic praise for ordinary Americans won’t fix material inequalities, but it is not empty, either. Rich people shouldn’t get uppity; they got lucky and they should recommit themselves to social equality.
- Family matters, communities serve an important purpose in our lives, and faith in God is probably here to stay. (Even if it is probably bunk!)
- Faith in experts is a lot more like faith in God than experts would have you believe. (Just like faith in Jesus Christ is a lot more like faith in Allah than priests would have you believe.)
- Liberals have silly biases, too.
In truth, I think few contemporary Republicans are actually conservatives in this sense. There’s a great deal of tension between different kinds of conservatives, and there’s little indication that the Burkean conservatism I am channeling here is particularly compatible with the kind of commitment to business and free-markets that also goes under the name conservative. There’s a reason “fusionism” is such a difficult circle to square. But Burkean conservatism is alive and well in the environmental movement, with skepticism about our capacity to tinker without a holistic understanding of “ecological functions” replacing Burke’s similar skepticism about tinkering in “social policy.”
If the underlying interest in conservatism is to preserve privilege and ideologize free markets, they have an odd way of going about it. Conservatives have long held the market at arms-length precisely because it is so disruptive and produces creative destruction in excess of what a society can handle. There’s plenty of market regulation coming out of conservative philosophical circles. They’ve regulated prostitution, drugs, immigration, and even speech, when it’s speech in the form of pornography, blasphemy, or religious radicalism. It’s conservatives that have tried to ban short-selling and leveraged speculation. Conservative banned interest on debt!
“relationships… lack something appropriate to them when they are confined to a nexus of supply and demand and allow no room for the intrusion of the loyalties and attachments which spring from familiarity.”
In contrast, liberals tend to be capitalist by default. It takes a lot of work to persuade the average liberal that some voluntary market activity is actually oppressive or coercive and needs to be regulated or banned. All most liberals take away from Marx and Engels is a call for safety regulations and a minimum wage.
Reification and totemization of small differences obscures the vast agreements among partisan ideologues, but among philosophers it is unforgiveable: discounting the conservative intellectual tradition just feeds conservative anti-intellectualism. Both parties have their favored subalterns, and representatives of both parties are willing to use populist language to justify their privileges. I find it especially disturbing when smart well-meaning conservatives are caricatured as elitist, or somehow in the pocket of privilege in a way distinct from liberals, while liberals enjoy most of the wage and status benefits of education, the cultural capital of cities, and intellectual capital of technological savvy.
Speaking only from my own experience: there are far too many BMWs in faculty parking lots.
Most academics know some version of the critique of elite rule, administrative power, and centralized regulation by experts. Hannah Arendt called bureaucracy the “rule of No Man;” Michel Foucault described the overlap of legislative power, knowledge-production, and the apparatus of discipline and control; Iris Marion Young defended simple street activism against the demand that political participation meet elaborate standards of reasonableness in the name of pluralism and in so doing laid the groundwork for current theories of agonistic democracy like Chantal Mouffe; Roberto Unger suggested that we ought to embrace democratic destabilization, experimentalism, and a radical institutional creativity belied by the supposed necessity of expert judgments; Anthony Giddens and Ulrich Beck have diagnosed the relationship between risk-aversion and governmental responsibility for emergency management as a modern form of legitimacy that both generates hazards and takes responsibility for managing them. Other criticisms came from conservative circles: Friedrich Hayek, Michael Oakeshott, and even Antonin Scalia.
Phillip Tetlock’s work on expertise is very illuminating here: in some fields, the avowed experts’ predictions actually are no better (and sometimes worse!) than a coin flip. That’s why David Estlund criticized the epistocratic tendency to ignore the systematic biases that underwrite invidious comparisons between evaluations of competence and incompetence in his book Democratic Authority.
And yet, some matters of expertise are unavoidable. David Estlund called these “primary bads”: war, famine, economic collapse, political collapse, epidemic, and genocide. In some cases, increased participation decreases the risk of such catastrophes: literacy and universal suffrage decrease the risk of famine, for instance. ”No famine has ever taken place in the history of the world in a functioning democracy,” Amartya Sen wrote in Development as Freedom, because democratic governments ”have to win elections and face public criticism, and have strong incentive to undertake measures to avert famines and other catastrophes.” Yet democracies still go to war and face economic crises (if not yet collapse) and the temptation is always there to imagine a system that will decrease the likelhood of such events.
The standard line is that democracies must keep experts “on tap, but not on top.” But consider a common example that Steven Maloney and I articulated in our paper “Foresight, Epistemic Reliability and the Systematic Underestimation of Risk:”
all citizens are affected by the Federal Reserve funds target rate (the rate that banks charge each other for overnight loans to cover capital reserve requirements) as it ultimately determines the availability of credit and thus the balance between economic growth, inflation, and unemployment. Most experts agree that the range of viable options for this rate is limited. Further, they agree that direct or representative democratic control of the rate would encourage non-optimal outcomes, including price bubbles that could lead to economic collapse. As a result, decisions on the target rate, which affect every citizen, are nonetheless denied to the public. Some citizens thus argue that the Federal Reserve ought then to be abolished as illegitimate. [These] citizens charge that members of the Federal Reserve Board, who are drawn from the management of a few investment banks, allow systematic biases for their home institutions to color their decisions… [I]t makes (1) findings of fact (2) in an exclusive and closed manner that (3) have coercive effects on citizens because (4) democratic decision-making would lead to cataclysmic primary bads….
Now, it is amusing to point to the financial crisis of 2008 and argue that the Federal Reserve failed to prevent economic collapse. But though the crisis was and remains severe, the Federal Reserve actually played a major and undemocratic role in preventing a true collapse. David Runciman’s recent piece in the London Review of Books makes a similar point:
When democracies are in serious trouble, elections always come at the wrong time. Maynard Keynes, the posthumous guru of the current crisis, made this point in the aftermath of the First World War, and again in the early 1930s. When something really momentous is at stake, the last thing you need is democratic politicians trawling for votes. Keynes readily accepted that democracies were far better at renewing themselves than the supposedly more efficient dictatorships. He just wished they wouldn’t try to do it when they were struggling to stop the world descending into chaos.
Matthew Yglesias discussed the implications of the Federal Reserve for Progressives early last year:
No public institution can or should be truly independent of the political process. The Supreme Court is an independent branch of government, and rightly so. But its decisions are subject to hot political debate, and the nomination of judges to sit on the high court is considered an important presidential power. This, too, is as it should be. The assumption that monetary policy is too important to hold central bankers accountable through the political process should have come to an end along with the illusory great moderation.
Perhaps he is right; but perhaps politicizing the Fed will have the same de-legitimizing impact that politicizing the Court has had, which could be dangerous for an institution whose only power is its capacity to make credible counter-cyclical commitments.
Too often, we have the tendency to reduce these questions into a battle between “democrats” and “elitists.” But there are few serious radical democrats who advocate the dissolution of the administrative state, let alone the liberal rights that restrict majoritarian rule.
Objections to elite status and epistemic privilege more often reflect a kind of partianship about which experts to respect, as a proxy for in-group solidarity. It is difficult not to reduce matters of scientific expertise and superstition to in-group/out-group tribalism: after all, as much as I respect the opposition to intelligent design in public schooling, there is little reason to believe it has important implications for biology curricula, and it also has massive public support in many school districts. A pure democracy would allow the people to set their own standards.
We all fear some out-group, whether it be the white supremacists’ fear of non-white incursions, or the secularists’ fear of theological domination. Many people without a college degree resent the wage premium and social status associated with it; many people with a college degree resent the democratic power of the uneducated and the pandering they receive by politicians and media. Regardless of education, there is the sense of irreconcilable differences. Many people believe that we do not inhabit the same world, even as our disputes over how to constitute our shared world erupt over a very narrow band of possible policies.
Who among us is not an elitist or a vanguardist in some sense? We all think we’re right and that we could run things better than the status quo. Even my fellow fallibilists think we’ve got a recipe for institutional humility that would enhance outcomes!
