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"The bottom line here is simple. Both capitalists and workers have cause for complaint. Capitalists have lost pricing power - the degree of monopoly has fallen - which has tended to depress the profit share. But this has not benefited workers because instead the "wedges" of other incomes and higher imports have depressed their share. "
"I think Murray and I are basically in agreement about the facts here. If you take narrow enough slices and focus on the media, academia, and civilian government, you can find groups of elites with liberal attitudes on economic and social issues. But I’m also interested in all those elites with conservative attitudes. Statistically, they outnumber the liberal elites. The conservative elites tend to live in different places than the liberal elites and they tend to have influence in different ways (consider, for example, decisions about where to build new highways, convention centers, etc., or pick your own examples), and those differences interest me."
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One way to see this is to consider Murray’s political quiz, “How thick is your bubble,” where he challenges his upper-class readers to assess their points in common to the ordinary Americans. One of Murray’s questions is, “Have you ever participated in a parade not involving global warming, a war protest, or gay rights?” The bit about gay rights is cute, but it also serves to separate out the liberals in the audience. After all, lots of non-elites go to gay rights parades. What if Murray had asked, “Have you ever participated in a parade not involving the pro-life or Tea Party movements?” This might not be the best example; my point is that there are lots of ways to separate the elites from the non-elites. Elites are more likely to know a business executive, more likely to buy a new SUV, more likely to fly business class, more likely to attend professional sporting events (those tickets are expensive!), less likely to rent rather than their homes, less likely to ride public transportation, and so on. Murray’s quiz is interesting but he chooses to separate elites from non-elites in a particular way that makes me think he’s sensitive to the attitudes of politically liberal elites in particular.
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The point of these examples is not that Murray is wrong, either in his prescriptions or in his recommendations—much here depends on one’s economic views about taxation and government spending—but rather that his argument keeps going in two opposite directions at once. From one side he argues that the upper class has good habits that they should transmit to ordinary Americans; on the other side he says that the upper class should become more like the rest of the country. But I can’t see how you can have it both ways. This connects to my earlier point that much could be gained by considering the diversity of attitudes among the upper class.
"Another reason is that I was (and remain to some extent) guilty of what science fiction writer Bruce Sterling calls acting dead: being irrationally averse to spending money where it matters, in a misguided attempt to “save” money to the point that the behavior paralyzes you. A large segment of the middle class is starting to act dead these days. Which makes sense since the class itself is dying. To stop acting dead, you have to resolve to exit the traditional middle class as well, unless you want to go down with it."
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Not acting dead involves a strategic spending pattern that marketers are starting to call trading up: buying premium in some areas of your life, while buying budget or entirely forgoing spending in other areas. This pattern of conscious, discriminating consumption defines the emerging replacement for the middle class. As the picture above illustrates, there isn’t really one “New Middle Class.” Instead, it is a fragmented social space, with each little island being defined by a specific pattern of trading-up, and an associated lifestyle design script.
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- Civil War generation (1870s): If I Go West as a Young Man, and work hard, I have as good a chance as anyone else of making it (gold miner, wildcatter)
- Gilded Age generation (1890s): If I work hard, I can make it (Horatio-Alger-inspired young people working for Robber Barons)
- Gatsby generation (1920s): Anybody can make it (Gatsby type easy money)
- New Deal generation (1930s): Together, we can make it* (worker building Hoover Dam)
- GI Bill generation (1940s): Any American can make it if he fights hard (WW II veteran, college-educated and starting high-responsibility job white collar job with young, growing American post-war companies)
- Organization Man generation (Silents, 1950s): I already have it; if I don’t screw it up, I can keep it (employee of mature, wealthy post-war company)
- Peace Corps generation (Boomers, 1960s): Americans already have it; we should share it (progressive, generous child of Cold War prosperity)
- Deregulation generation (X, 1980s): We’re losing it. If I keep my head down and step around the falling rubble smartly, I may escape (entering workforce among layoffs and uncertainty in manufacturing)
- Net generation (Y, late 1990s): We’re losing it. I don’t know what to do, I’ll go Occupy Wall Street (this generation lived through a boom and a bust and 9/11 while coming of age, turning the pig narrative into garbage at the starting gate, leaving a harsh, anomic landscape)
- Next generation (coming of age right now ): If I Go East as a Young Person, and work hard, I have as good a chance as anyone else of making it (lifestyle entrepreneur in Asia or Eastern Europe — this script will likely take shape with the 2016 election, when the generation is first courted by politicians).
That’s merely the brand. Here are the actual premises of the 9 scripts between the 1870s to the 1990s, and the archetypical life stories they informed. I am playing fast and loose with generational and cohort analysis here to make a broad point, so please don’t hold me to very precise sociological details.
Note that the dates are the coming-of-age windows for each generation (i.e. when they were between 15-21 and impressionable), not birth decade. Subtract 15-21 years to get the birth year range.
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- Risky vs. risk-free
- Effort-ful vs. effortless
- Individualist vs. collectivist
- Upturn vs. Downturn vs. Cusp
- Scarcity vs. Abundance vs. Surplus
- Mine to Make vs. Mine to Lose (Make/Lose) framing
The Key Narrative Variables
Hidden in this messy evolution, you can spot a few key variables that change value as the narrative gets tweaked generation by generation. Here are the main ones I can see (you can think of them as on/off variables or sliding scale).
Seven studies using experimental and naturalistic methods reveal that upper-class individuals behave more unethically than lower-class individuals. In studies 1 and 2, upper-class individuals were more likely to break the law while driving, relative to lower-class individuals. In follow-up laboratory studies, upper-class individuals were more likely to exhibit unethical decision-making tendencies (study 3), take valued goods from others (study 4), lie in a negotiation (study 5), cheat to increase their chances of winning a prize (study 6), and endorse unethical behavior at work (study 7) than were lower-class individuals. Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed.
A series of studies conducted by psychologists at the University of California, Berkeley and the University of Toronto in Canada reveal something the well off may not want to hear. Individuals who are relatively high in social class are more likely to engage in a variety of unethical behaviors.
We can see, then, that the tax system in the United States violates the fundamental principles of income taxation. Those are “vertical equity,” which says that those with upper incomes should pay a higher effective tax rate than those with modest incomes — as far back as Adam Smith, ability to pay has always been a core principle of taxation — and “horizontal equity,” which says that those with roughly the same income ought to pay roughly the same taxes.
"Bank bosses have played a trick which countless ordinary workers do. The IT support guy who introduces lots of “security features” to his firm’s IT systems, or the secretary who has an incomprehensible filing system, make themselves indispensable by inconveniencing others."
" Consider that we trust military and homeland security personnel with our lives, yet we don’t give them lavish bonuses. They get promotions and the honor of a job well done if they succeed, and the severe disincentive of shame if they fail. For bankers, it is the opposite: a bonus if they make short-term profits and a bailout if they go bust. The question of talent is a red herring: Having worked with both groups, I can tell you that military and security people are not only more careful about safety, but also have far greater technical skill, than bankers. "
"One second thought, it probably can't be called that, the 99% is a way of thinking class, without thinking class, of addressing inequality without thinking about exploitation. It is inclusive to a fault, rather than deal with the antagonism of class it presents a society against a 1% seen as the epitome of greed and wealth."
" A study from the National Bureau for Economic Research says that the income gains from specifically vocational majors (as opposed to liberal arts majors) peter out relatively early in life. By midlife, the liberal arts majors are actually out-earning the vocational majors, on average. The most dramatic fades occur in apprenticeship programs."
"Luckily, research (pdf) by Guido Heineck tackles just this question. Unluckily, his findings are depressing.
He looked at the correlations between UK individuals’ earnings and “big five” personality traits, controlling for other things such as age, education, marital status and region."
"Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret."
"Essentially, economic policy has not supported good jobs over the last 30 years or so. Rather, the focus has been on policies that were thought to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards including the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to erode the bargaining power of most workers, widen wage inequality, and deplete access to good jobs. In the last 10 years even workers with a college degree have failed to see any real wage growth."
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