Coming off the heels of my previous post concerning inequality (yes, I’ve discuss the issue a lot), is an analysis on the origins of our distinctly high rate of wealth disparity. One of the more interesting explanations I’ve read comes from a somewhat old but still relevant article in theNew York Times, “The Paradox of the New Elite” by Alexander Stille.
In it, he suggests that the difference between the rates of equality between countries lies more in the nature of a given society, and its cultural values, than in any particular fiscal or political development. As I’ve long supported a connection between culture and overall national prosperity, I’ve taken a particular interest in his claim.
IT’S a puzzle: one dispossessed group after another — blacks, women, Hispanics and gays — has been gradually accepted in the United States, granted equal rights and brought into the mainstream.
At the same time, in economic terms, the United States has gone from being a comparatively egalitarian society to one of the most unequal democracies in the world.
The two shifts are each huge and hugely important: one shows a steady march toward democratic inclusion, the other toward a tolerance of economic stratification that would have been unthinkable a generation ago.
The United States prides itself on the belief that “anyone can be president,” and what better example than Barack Obama, son of a black Kenyan immigrant and a white American mother — neither of them rich.
And yet more than half the presidents over the past 110 years attended Harvard, Yale or Princeton and graduates of Harvard and Yale have had a lock on the White House for the last 23 years, across four presidencies. Thus we have become both more inclusive and more elitist.
It’s a surprising contradiction. Is the confluence of these two movements a mere historical accident? Or are the two trends related?
Indeed, we Americans historically derived our sense of exceptionalism not only our democratic and constitutional traditions, but from the idea that socioeconomic barriers were virtually nonexistent; a hardworking and responsible person could transcend their humble origins and prosper like nowhere else – that is, if they were white males.
But there seems to have been a reversal in this narrative, for as more formerly disenfranchised groups gain ground politically and socially (albeit with more to be done), the overall socioeconomic picture looks grim. Wealth and income are more unequal, average wages have remained stagnant, and there’s a sense that things like healthcare and education are financially out of reach to the average person. Are political and socioeconomic equality mutually exclusive?
Other nations seem to face the same challenge: either inclusive, or economically just. Europe has maintained much more economic equality but is struggling greatly with inclusiveness and discrimination, and is far less open to minorities than is the United States.
European countries have done a better job of protecting workers’ salaries and rights but have been reluctant to extend the benefits of their generous welfare state to new immigrants who look and act differently from them. Could America’s lost enthusiasm for income redistribution and progressive taxation be in part a reaction to sharing resources with traditionally excluded groups?
“I do think there is a trade-off between inclusion and equality,” said Gary Becker, a professor of economics at the University of Chicago and a Nobel laureate. “I think if you are a German worker you are better off than your American equivalent, but if you are an immigrant, you are better off in the U.S.”
The article goes on to highlight some examples of this tradeoff, such as the fact that most students at our top schools – regardless of their ethnic, gender, or racial origins – are of affluent backgrounds (the same pertains to our average member of Congress). Yet foreigners prosper far more in the US than in most European states, hence why we remain a beacon of immigration, and why our universities remain robustly international in their make-up.
The problem is that regardless of your origin, education is widely considered to be the main avenue for socioeconomic development, yet more and more of the people that need it most are shut out by financial restraints, creating a cycle of self-perpetuating elites. Certain minorities gain in relative terms, yet the average American on a whole seems to be facing barriers to upward mobility.
Removing the most blatant forms of discrimination, ironically, made it easier to justify keeping whatever rewards you could obtain through the new, supposedly more meritocratic system. “Greater inclusiveness was a precondition for greater economic stratification,” said Professor Karabel. “It strengthened the system, reinvigorated its ideology — it is much easier to defend gains that appear to be earned through merit. In a meritocracy, inequality becomes much more acceptable.”
THE term “meritocracy” — now almost universally used as a term of praise — was actually coined as a pejorative term, appearing for the first time in 1958, in the title of a satirical dystopian novel, “The Rise of the Meritocracy,” by the British Labour Party leader Michael Young. He warned against the creation of a new technocratic elite in which the selection of the few would lead to the abandonment of the many, a new elite whose privileges were even more crushing and fiercely defended because they appeared to be entirely merited.
Therein lays the catch: we defend a person’s wealth and privilege, no matter how high or disproportional it may be, under the pretext that it was earned and they’re therefore entitled to it. Even poorer Americans do this, mostly out of a commitment to the principle of merit that underpins economic mobility (and also because they hold out the possibility that based on this system, they too could be at the top one day).
But the question is if such wealth and power is really earned through merit rather than birth. As noted before, access to education, public office, or higher paying jobs seem increasingly contingent on one’s wealth, as well as the connections that come with it. A causal dilemma ensues: to be better off, we increasingly rely on the kind of education and networking that is mostly limited to the better off.
This isn’t to say that there aren’t exceptions, or that people born to well-monied families don’t also work hard and persevere through personal challenges. But if being born within an exclusive socioeconomic level appears to significantly better your chances of attaining wealth and political power, then you have to wonder to what extent merit alone is going to cut it. This is where the balance between inclusion and inequality comes in.
Of the European countries, Britain’s politics of inequality and inclusion most resemble those of the United States. Even as inequality has grown considerably, the British sense of economic class has diminished. As recently as 1988, some 67 percent of British citizens proudly identified themselves as working class. Now only 24 percent do. Almost everybody below the Queen and above the poverty line considers himself or herself “middle class.”
Germany still has robust protections for its workers and one of the healthiest economies in Europe. Children at age 10 are placed on different tracks, some leading to university and others to vocational school — a closing off of opportunity that Americans would find intolerable. But it is uncontroversial because those attending vocational school often earn as much as those who attend university. In France, it is illegal for the government to collect information on people on the basis of race. And yet millions of immigrants — and the children and grandchildren of immigrants — fester in slums.
In the United States, the stratification of wealth followed several decades where economic equality was strong. The stock market crash of 1929 and the Great Depression that followed underscored the excesses of the roaring ’20s and ushered in an era in which the political climate favored labor unions, progressive taxation and social programs aimed at reducing poverty.
From the 1930s to the 1960s, the income of the less affluent Americans grew more quickly than that of their wealthier neighbors, and the richest 1 percent saw its share of the national income shrink to 8.9 percent in the mid-1970s, from 23.9 percent in 1928. That share is now back up to more than 20 percent, its level before the Depression.
Inequality has traditionally been acceptable to Americans if accompanied by mobility. But most recent studies of economic mobility indicate that it is getting even harder for people to jump from one economic class to another in the United States, harder to join the elite. While Americans are used to considering equal opportunity and equality of condition as separate issues, they may need to reconsider. In an era in which money translates into political power, there is a growing feeling, on both left and right, that special interests have their way in Washington. There is growing anger, from the Tea Party to Occupy Wall Street, that the current system is stacked against ordinary citizens. Suddenly, as in the 1930s, the issue of economic equality is back in play.
In short, one probable factor is that our focus on identity politics, coupled with a lack of class consciousness, has diverted our attention away from matters of economic equalitarianism. When we do discuss social and economic matters, it pertains to giving people the path to bettering their condition on their own, rather than having those conditions bettered directly (e.g. through tax-funded social programs).
Inequality and inclusion are both as American as apple pie, says Jerome Karabel, a professor of sociology at the University of California, Berkeley, and author of “The Chosen,” about the history of admission to Harvard, Yale and Princeton. “I don’t think any advanced democracy is as obsessed with equality of opportunity or as relatively unconcerned with equality of condition,” he says. “As long as everyone has a chance to compete, we shouldn’t worry about equality. Equality of condition is seen as undesirable, even un-American.”
The key phrase being “as long as everyone has a chance to compete;” as I’ve stressed numerous times before, most people wouldn’t mind enduring the challenges of upward mobility if they felt that they could overcome them through personal perseverance. We’re a highly individualistic society, and we pride ourselves at achieving prosperity on our own. Again, that sentiment is what underpins the American Dream.
But if people continue to be shut out of avenues for economic improvement – such as a good education or a professional career – or find themselves unable to prosper even when they attain both, then the issue of self-perpetuating inequality could return in full-force. If no amount of hard work is getting us any better off, then questions are raised about the nature of the economic and political system, just as we see happening now.
Most Americans aren’t asking for socialism or a welfare state. What they want is a political and economic environment that actually gives them room to prosper on their own terms – for equality of opportunity to actually mean something. Many people are still doing well for themselves, and we’ll always know of someone who rose from rags to riches. But the concern is whether this ostensibly merit-based system is being eroded, and whether future generations, regardless of their identity and origin, are going to have the same opportunities as their parents.
I’m wondering: is inclusion and equality really mutually exclusive? Could it be that we’ll always have to choose between one and the other? A few other diverse countries, such as Canada and Australia, have maintained relatively higher income equality. But maybe they’re outliers, and maybe the average scenario necessitates a choice between an egalitarian society and an inclusive one.
What are your thoughts and experiences in this matter? I’m not even beginning to address the probable solutions, though I welcome feedback on that regard too.