America is separating into peasants and scholar-gentry

http://noahpinionblog.blogspot.ch/2013/12/america-is-separating-into-peasants-and.html

by npalli • 13 years ago

86 101 13 years ago

noahpinionblog.blogspot.ch

morenoh149• 13 years ago

I like this post. How do we solve this as a society? Sometimes I wonder when the earth will reach it's maximum number of human inhabitants. Will there me a meritocratic system for reproduction? What factors will/can be taken into account?

nly• 13 years ago

When the Earth reaches peak human occupancy, it's likely nobody will feel the need to do anything about it. Whatever reproduction rate we're at at equilibrium will then be perceived as completely normal.

ams6110• 13 years ago

Just the other day I got my hair cut in a poor white neighborhood, and the barber spent the whole time telling me about "that bitch" who was the mother of his children.

Hm. My barber talks that way too, in fact that could easily be a direct quote. And his shop is in a very liberal, progressive university town. Maybe that's just the way guys talk when there's no women around?

icarus1272• 13 years ago

None of the guys I'm around, nor myself, think that's okay just because women aren't present.

beachstartup2• 13 years ago

plenty of the guys i'm around do, and plenty don't.

i would posit that you're not getting as whole a picture (definitely of men, possibly of women) as you could if nobody you know does.

coldtea2• 13 years ago

Sure.

tsotha2• 13 years ago

You must be young.

busterarm• 13 years ago

Interesting post. I pretty much agree on all points and don't see solutions either.

It's not always so easy to peg down where we're at though. I grew up with a Fishtown income and family life but got the Belmont education. I've been wedged in between both groups my whole life and don't really feel a belonging to either. I know very well how both live.

There are a lot of problems; class divide is rapidly getting worse. It looks like this is something that a lot of people are worried about too, so some large change in either direction might be on the horizon. I'd like to hope that change is the right one, but I can't.

alexeisadeski32• 13 years ago

If he thinks the split is bad now, he'd have loved the 1830's!

coldtea2• 13 years ago

Or ancient Rome or Persia.

Which is beside the point -- the point being that modern society was supposed (for most of the 20th century) to be moving AWAY from all that, not back to Dickensian times or worse.

alexeisadeski32• 13 years ago

Given that worldwide equality is falling each year, I'd say that all is well.

Also I'd note that the "educated sophisticates" are a far higher proportion of population today than before.

devilshaircut6• 13 years ago

I am no sociologist, but I think it would be rather safe to say that to it is going to take a lot for this to change. We've clearly adapted to the divide between the mega-rich and the "middle" class, so I am not sure it is a matter of survival so much as a matter of principle.

I think it would take a lot of people collectively thinking and acting differently than we do now. I am just one person, but it is my goal to live my life with the intent of turning this situation around. I believe the spirit of entrepreneurship, which is generally well-supported on HN, is a piece of this - designing and building the next generation of companies who choose to conduct business in ways that support (rather than exploit) the middle class. Hence, I am an entrepreneur.

mhurron• 13 years ago

Hence, I am an entrepreneur.

Petite bourgeoisie. How wonderful, everything that was old is new again.

devilshaircut6• 13 years ago

I suppose that is a derogatory remark, but I never claimed that to be an entrepreneur is a new thing. It is demonstrably not. What I did try to suggest is that it is perhaps a good way to deconstruct this problem.

bmelton6• 13 years ago

The progressive left would solve this problem with increased taxation on the rich, which would ostensibly be used to fund more social programs for the poor. Take from the Belmonts, give to the Fishtowners. Raise the minimum wage, increase regulation, enforce stricter laws that encourage equity for all. Perhaps some form of guaranteed income.

The libertarians would solve this problem by eliminating barriers to success. Lessen business owner regulatory burdens, eliminate federal income taxes, eliminate the minimum wage, and impose as few hurdles as possible to whomever wants to hang their own shingle and provide a service.

I'm not sure what the Republicans would want, really, or at least not specifically enough to enunciate it here on their behalf, but let's say it's somewhere in the middle.

If you're able to succeed as an entrepreneur enough to be able to have some degree of influence on the problem, then you'd be a spokesperson for either the democrats or the libertarians. By your success, you'll be advocating the possibility of one to pull themselves up by their bootstraps, hang their own shingle, and become financially stable in the process, but by having attained that success, you would similarly be the target of progressive taxation, and would now be a sympathetic Belmont, from whom riches will be collected and distributed to Fishtown.

devilshaircut6• 13 years ago

I think your assessment is more or less accurate.

I see it this way:

What practices have resulted in things being the way they are now? These practices are largely attributable to businesses whose policies are endorsed and enacted through government. Government politics are a complete morass and you've done an excellent job of painting how various parties might try and solve the problem.

So if government is a morass, how do you approach the problem? Certainly a career in politics is out of the question based on this presupposition. One might consider simply adapting how they act in their daily interactions with others. Personally I think this idea is too small-scale.

In my opinion, one strategy would be through the business side. Create a business whose policies create the type of change necessary for closing the gap between the mega-rich and "middle" class. The argument has been made in this thread that in order to compete, it is impossible to instate these types of policies. However, I believe this to be a false assumption. Certainly companies, even large ones, fall into a spectrum of "good" and "bad" practices. There appears to be no bound to either side. I take the David Deutschian view that any problem can be solved with the right knowledge¹. So the question is, can we think creatively, critically, and intelligently enough to solve this problem in business?

I believe the answer is yes.

¹ EDIT: Any problem whose solution is not explicitly prohibited by the nature of reality.

rosser2• 13 years ago

Those are some incredibly broad brushes you're wielding there.

tikhonj• 13 years ago

Basic income or a negative income tax actually generally seem to be libertarian ideas, suggested as a way to radically simplify the welfare system and limit how much discretion the government had over whom and how much to pay. They are also usually coupled with eliminating the minimum wage since everyone is already guaranteed an income.

My understanding is that liberals prefer welfare programs with significantly more oversight and targeting. They want fine control over who gets the money and how they can spend it, promoting specific causes like education or environmentalism.

benaston2• 13 years ago

People with education and good parents are at the table playing the game. The poor and disadvantaged are playing a different game, with its own pressures and psychological frame. Decision making is dependant on psychological frame, and decisions made by players either game look strange to players in the other. The OP makes the mistake of moralising when he should be empathising.

IanDrake• 13 years ago

The problem with that thinking is the poor and uneducated make demands on the educated and productive. If they want to live in squalor, who am I to judge. If they want what I have, I have something to say about that.

benaston2• 13 years ago

Surely you don't begrudge them wanting/aspiring to something better. I presume you mean that if they expect to have the trappings of success without putting in any effort then you have something to say. But even then, that is merely an expectation that will remain unfulfilled. If a group of people actually receives the trappings of success without effort then, I agree with you, but this is not born out by everyday experience. The poor and disadvantaged are comparatively, well, poor and disadvantaged when compared to the successful. So, if my anecdotal experience matches reality then the problem becomes, "how best to help?".

judk6• 13 years ago

You were born poor an educated before wealth and educaion where poured on your head.

OK, this is HN, so I'm sure you lifted yourself by your bootstraps out of the dirt. But the majority of your neighbors did not.

mcantelon• 13 years ago

the American government was responsible for much of the social equality

The people that fought for social equality are the ones who are responsible for making it politically desirable. After their fight came the post-war economic boom which made US labor an economically valuable resource worth treating well. Globalization and the rise of automation now brings us back to considering US labor a surplus to be had cheap. Government policy will likely claw back expenses that contribute to social equality accordingly until unrest grows.

rodgerd• 13 years ago

The people that fought for social equality are the ones who are responsible for making it politically desirable.

Absolutely, but I'm pretty sure when writing for a US audience it's foolish to so much as hint that good working conditions may in any way relate to the work of union organisation.

amerika_blog• 13 years ago

The scholar-gentry are false elites who have no idea how disconnected from reality they are.

Source: former one, fall from grace, mostly by choice.

thenerdfiles• 13 years ago

OP's picture of our economic reality is overly simplistic.

The Urban Archipaelogo[0] is the new era of politics, not this false stratification/dichotomy of proletariat, bourgeoise, and archetypes in between, which cannot explain network effects.

    Class is a spectrum condition/disorder of society.

Or to put it another way:

    Poverty is a disease of economies.

[0]: http://www.thestranger.com/seattle/Content?oid=19813

zw123456• 13 years ago

I saw that article as well and almost posted it. Very interesting cross thoughts between the Stranger article and the Noah Smith article. Everyone agrees that there is this is happening but no one seems to know what to do about it.

frooxie• 13 years ago

scholar-gentry

We prefer to be called "Eloi-American".

jeorgun• 13 years ago

Going by Neal Stephenson, surely the scholar-class would be the Morlocks in this particular analogy :P

MarkPNeyer• 13 years ago

what book is that from?

r0s• 13 years ago

Please, Mentat.

jfb• 13 years ago

Of course, we're still just the shoe-shine boys of the ruling elite.

judk6• 13 years ago

No room for false humility here.

The upper middle class are collaborators, taking part in the oppression of the working class in exchange for being lifted above it. The mercenaries of class warfare.

clarkm• 13 years ago

The book is really good and definitely worth a read, especially for the analysis he presents in the first few chapters. The "Fishtown" vs. "Belmont" graphs are brilliant. They do a great job illustrating just how much trends in marriage vary between classes. The upper 20% still marry and divorce at the same rates they did in the 60s, but the bottom 30% has changed dramatically.

Murray also does great analysis on what he calls "SuperZIPs": the zip codes in the top 5% of combined income and education. You can see you score here:

http://www.washingtonpost.com/sf/local/2013/11/09/washington...

It's not just neighborhoods where the elites cluster -- it's entire regions.

aidenn0• 13 years ago

Apparently, I grew up in 96th percentile zip-code, but bordered on a 99 and 2 98s.

redthrowaway2• 13 years ago

Counterpoint from David Frum, a guy I disagree with on many issues but nonetheless respect immensely:

http://www.thedailybeast.com/articles/2012/02/06/charles-mur...

tesseractive2• 13 years ago

Thank you for this link. I've only gotten through part 1 so far, but it's a devastating critique of Murray's framing of the problem.

One particularly interesting bit:

As I looked backward and forward in time, however, I had to face this awkward fact: America became more culturally stable between 1910 and 1960 as it became less economically and socially libertarian. As it became more economically and socially libertarian after 1970, America became culturally less stable:
"The greatest generation was also the statist generation. Like them or loathe them, the middle decades of the twentieth century were an entirely anomalous period in American history. Never had the state been so strong, never had people submitted as uncomplainingly, never had the country been more economically equal, never had it been more ethnically homogeneous, seldom was its political consensus more overpowering."

AndrewKemendo4• 13 years ago

This is another example of caging the eyes to a nation when the network effects are global.

Worldwide inequality is falling, that is well documented. So the Keynesian prognostication about a life of desirable idleness based on re-investment of capital into local markets and automation was slowed because the capital found cheaper means than automation for growth.

So when you want to talk about social equality look at the impact global capitalism had on South Korea from 1950-today (as just one example).

notdrunkatall• 13 years ago

This is another example of caging the eyes to a nation when the network effects are global.

Nicely said.

warfangle2• 13 years ago

Let's also talk about the impact of global capitalism on Nigeria (as a counter-example)[0].

0. http://news.bbc.co.uk/2/shared/spl/hi/picture_gallery/04/afr...

AndrewKemendo4• 13 years ago

Depends on your measure.

The Nigerian GDP is a hockey stick from 2000 to today while the GINI is mixed.

http://data.worldbank.org/country/nigeria

capisce3• 13 years ago

Where is the documentation for worldwide inequality falling? According to this page for instance GINI (a measure of inequality) has been rising in most countries since the 1980s: http://geo-mexico.com/?p=5044

nostrademons2• 13 years ago

The stat I've heard (in soundbite form; I don't have solid data for this) is that inequality within countries is rising across the board, but inequality between countries is falling. In other words, a rich Chinese person is now much richer than a poor Chinese person, a rich Mexican is now much richer than a poor Mexican, and a rich American is much richer than a poor American. However, a rich Chinese person or Mexican is now almost as rich as a rich American, while a poor American is now nearly as poor as a poor Mexican. And a rich Chinese person is significantly wealthier than a poor American, while it used to be that poor Americans were significantly wealthier than even wealthy Chinese.

There's plenty of anecdotal evidence to support this, eg. the richest person in the world was Mexican from 2010-2013, and it also makes a lot of sense when you consider how globalization works.

AndrewKemendo4• 13 years ago

World Bank report 2012[1]: For the first time since this monitoring task began, the data indicate a decline in both the poverty rate and the number of poor in all six regions of the developing world

Kings College 2013[2]: In this paper we explore who have been the winners and losers from global growth since 1990

Economist Special Section 2012[3] - More nuanced and could offer a slightly alternative if generally positive example

[1] http://siteresources.worldbank.org/INTPOVCALNET/Resources/Gl...

[2] http://www.kcl.ac.uk/aboutkings/worldwide/initiatives/global...

[3] http://www.economist.com/node/21564414

towski• 13 years ago

I would think that computers will continue to increase social inequity, since now just a few people can run a multi-million dollar company.

mrxd• 13 years ago

Worldwide inequality has been rising continuously since the 1820s http://en.wikipedia.org/wiki/Gini_coefficient#World_income_G...

sien• 13 years ago

From your own link....

2002 0.71 2005 0.68

AndrewKemendo4• 13 years ago

What GINI misses is that the floor is rising across the board. So while internal to a country it may be spreading, between nations is shrinking: meaning a higher quality of life at the mean. See my other comment for documentation.

eli_gottlieb5• 13 years ago

Worldwide inequality is falling, that is well documented.

I was under the impression that this is mostly or solely due to extravagant growth pulling hundreds of millions of Chinese out of poverty, and that once you factor this out (which you should, since the Chinese are employing protectionist, state-capitalist policies rather than standard IMF/WTO-flavored neoliberal ones), global inequality has been rising.

steveplace• 13 years ago

Remember when HN was about programming and startups, not class warfare and income inequality?

That was nice.

fiatmoney• 13 years ago

What does it say that HN is becoming increasingly aware of these issues?

For that matter, a hell of a lot of startups are predicated on the existence of a large middle class as a mass consumer market.

tesseractive2• 13 years ago

Indeed. And middle-class consumer demand not only drives significant parts of the economy directly, it has major spin-off effects that impact the health as the economy as a whole and the potential healthy growth rate of the economy.

For anyone who depends on a healthy, growing economy for their livelihood and/or wealth, there's a pretty good case to be made that it is in your enlightened self-interest to do anything within reason to promote a large, prosperous middle class with the surplus purchasing power to drive future economic growth.

tsotha2• 13 years ago

What does it say that HN is becoming increasingly aware of these issues?

All it says is HN is more of a general social media site instead of one with a laser focus on startups.

eli_gottlieb5• 13 years ago

For that matter, a hell of a lot of startups are predicated on the existence of a large middle class as a mass consumer market.

And an economy dominated by the Finance, Insurance and Real-Estate sector can't support the mass consumer market start-ups need.

redthrowaway2• 13 years ago

HN is for things hackers find interesting. I, for one, find ruminations on the deepest problems facing society to be more interesting than SnapCrush's Series B or the latest Javascript that isn't Javascript.

knackernews• 13 years ago

Many people now use the 'hn is for anything hackers find interesting' excuse to post whatever is hot on reddit.

KGZotU• 13 years ago

A year or so ago I felt that the discourse on HN was so expert, I was afraid to join in. If a topic such as this came up, I would wonder, "Christ, is everyone on this board an economist too?" Time was, the pathos, the me-toos, and the ad-homs were unwritten.

I think that a lot of less qualified people recognized the quality of HN and began browsing here. When a general interest topic comes up, it's their opportunity to have an opinion.

With that comes upvotes and comments. I really don't care about your passionate, unnuanced assessment of American politics, or the articles you want me to read because they echo your beliefs. I want the stuff that doesn't make sense to me so I can make it make sense. I want to follow the economic and professional climate of this engine of innovation.

I found HN by following a link in a comment on reddit, to which someone had directed the admonishment, "Please don't ruin that." I won't say that HN has been ruined since I came here but it has undeniably changed.

dualogy• 13 years ago

Christ, is everyone on this board an economist too?

Well everyone on the Internet "is-an-economist-too" -- so by implication: of course!

loomio• 13 years ago

Surely inventing new technology to disrupt markets requires a deep understanding of those markets, and the social fabric they are woven in? Surely software is made by people, and understanding people is key to understanding the process of making software? It's not an accident that the greatest inventors were renaissance men and women, with broad and deep understanding across many areas.

misterjangles• 13 years ago

I've noticed the HN hive mind becomes interested in certain types of non-tech topics for a few days and then moves back to tech.

I find the non-tech links to usually be an interesting diversion but I have to resist the temptation of adding my own hot air to all of the arm chair philosophy in the comment section. I often fail in this attempt.

jseliger• 13 years ago

Basically, America is separating into aristocrats and peasants.

There's one very, very important difference: aristocrats were generally in a heritable position that couldn't be taken from them, and peasants were generally in a heritable position from which they couldn't rise. In the U.S., at least, relatively wealthy / successful people can fall and relatively poor / unsuccessful people can rise. In classic feudal societies, this was basically impossible without revolutions.

To be honest, I have no idea what will do the trick. There is unlikely to be another WW2, another G.I. bill, another 50s-type broad-based economic boom.

This is really true, and it's arguably the most important part of this blog post, of Tyler Cowen's recent book Average is Over, and in many of the more honest discussions by people who are trying to get a handle of what's going on in the larger world.

smtddr• 13 years ago

>There's one very, very important difference: aristocrats were generally in a heritable position that couldn't be taken from them, and peasants were generally in a heritable position from which they couldn't rise. In the U.S., at least, relatively wealthy / successful people can fall and relatively poor / unsuccessful people can rise. In classic feudal societies, this was basically impossible without revolutions.

That's true for now. But the way things are heading; the rich get richer and the poor get poorer. The barrier dividing the 2 gets a little harder to cross every year.

Spooky233• 13 years ago

You're right -- Ye olden aristocrats had land, and land produced rents and taxes. Today's plutocrats aren't in as stable a position as a feudal lord, but many are in effect landlords, either literally or figuratively via control of critical businesses.

The postwar US was a totally different story. Europe and Asia's losses were our gain. The government had billions of dollars in off book debt, (ie. social security trust fund) and used that capital to launch the computer revolution.

Will it happen again? I wouldn't dismiss it... No nation is more strategically embedded in the new information economy than the US. At the end of the day, the US is the devil the world knows and needs.

userulluipeste2• 13 years ago

"At the end of the day, the US is the devil the world knows and needs."

Probably easy to grasp and agree with this political thought when you're being part of the US, bot otherwise... could you elaborate?

jshen2• 13 years ago

Economic mobility is declining in the US. So which rung of the ladder you are born on is having a greater influence on where you end up.

InclinedPlane• 13 years ago

Some reasons why this is becoming so:

Labor laws make it difficult for people in lower income tiers to climb up the income ladder. It's difficult for people who are working less than fulltime jobs to work more hours because of the "40hr = benefits" laws, so instead folks have to work multiple jobs which adds transportation costs and scheduling complexities. The preponderance of regulations and complex taxes has made it more difficult to start many types of companies as an individual, putting them out of reach of folks who don't have significant savings and existing income.

Public education is no longer as much of a guarantor of basic literacy as it once was, so college education is increasingly becoming a necessary credential for many office work, knowledge work, and "professional" jobs, putting those out of the reach of many low income folks who are put off by taking on so much student loan debt or can't afford to support themselves and put themselves through college at the same time.

Similarly, anti-blue-collar sentiment has grown, devaluing such jobs culturally and discouraging people from pursuing such positions, even though many are well paying and can serve as spring boards to even higher paying jobs (e.g. self-employment). Moreover, the reduction in vocational training, shop classes, and so forth in public schooling has pushed a lot of those jobs even farther away from the average American adult.

The War on Drugs: which impacts lower income, blue-collar, and non-white people more. If you get caught with weed as a sub-urban white teen you'll face different consequences than if you're an inner-city black teen.

Some of these trends will hopefully turn around, especially with the help of the internet in terms of education, crowd funding, and so forth, but it's still going to be a pretty difficult problem for some time.

America is separating into peasants and scholar-gentry

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