land of opportunity

Yet another Economist article, this one about the decline of American social mobility:

A growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the Gilded Age, around the 1880s. But social mobility is not increasing at anything like the same pace: would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap. The United States risks calcifying into a European-style class-based society.

...

Thirty years ago the average real annual compensation of the top 100 chief executives was $1.3m: 39 times the pay of the average worker. Today it is $37.5m: over 1,000 times the pay of the average worker. In 2001 the top 1% of households earned 20% of all income and held 33.4% of all net worth. Not since pre-Depression days has the top 1% taken such a big whack.

Most Americans see nothing wrong with inequality of income so long as it comes with plenty of social mobility: it is simply the price paid for a dynamic economy. But the new rise in inequality does not seem to have come with a commensurate rise in mobility. There may even have been a fall.

...

This is not the first time that America has looked as if it was about to succumb to what might be termed the British temptation. America witnessed a similar widening of the income gap in the Gilded Age. It also witnessed the formation of a British-style ruling class. The robber barons of the late 19th century sent their children to private boarding schools and made sure that they married the daughters of the old elite, preferably from across the Atlantic. Politics fell into the hands of the members of a limited circle—so much so that the Senate was known as the millionaires' club.

Yet the late 19th and early 20th centuries saw a concerted attempt to prevent America from degenerating into a class-based society. Progressive politicians improved state education. Philanthropists—many of them the robber barons reborn in new guise—tried to provide ladders to help the lads-o'-parts (Andrew Carnegie poured millions into free libraries). Such reforms were motivated partly out of a desire to do good works and partly out of a real fear of the implications of class-based society. Teddy Roosevelt advocated an inheritance tax because he thought that huge inherited fortunes would ruin the character of the republic. James Conant, the president of Harvard in 1933-53, advocated radical educational reform—particularly the transformation of his own university into a meritocracy—in order to prevent America from producing an aristocracy.

The evils that Roosevelt and Conant worried about are clearly beginning to reappear. But so far there are few signs of a reform movement. Why not?

Comments

[lobbygow]

Most Americans see nothing wrong with inequality of income so long as it comes with plenty of social mobility: it is simply the price paid for a dynamic economy. But the new rise in inequality does not seem to have come with a commensurate rise in mobility. There may even have been a fall.

We need a party that represents true mobility, rather than a deferred dream of immeasurable wealth. The new afterlife for many Americans is life after the dismantling of our decrepit "welfare state." Just as soon as all of the pesky taxes and regulations are removed, Josephine and Joe Sixpack will enjoy an embarassment of riches in the new promised land.

It's an open secret that Karl Rove wants to build an America modelled after the McKinley era. I'm sure most Americans missed this detail, but even if they were aware of it, would they care?

I think not.

They should care, because that era was obviously not an equilibrium state. It won't last long and is likely to lead to an equally virulent counter-ideology. What happens when the masses figure out Rove's dream isn't working for them?

Ironically, this time around the revolutionaries will be better educated, better connected and better armed. They also won't be starving. It won't be Communism, but it will be something very unpalatable to the majority of Americans.