Economic Mobility: Latest Ruse of the Rich

Posted by Bob Lord

Great piece by Sean McElwee in Salon yesterday, Listen up, talking heads: Upward mobiity isn't the answer. McElwee identifies and exposes the latest ruse of the rich, implemented through their proxies in the punditocracy and Congress: It's not inequality, but upward mobility, that we need to address. In other words, if we can just improve the odds of going from rags to riches, it would be just fine if most Americans were in rags. McElwee:

A new “bipartisan consensus” is brewing: 2014 will be the year in which Very Serious People argue that America’s primary economic goal should be increasing social mobility, not decreasing inequality. “Shame on Obama and De Blasio for talking about class, and trying to divide us,” they’ll smarm. “Let’s focus on something everyone can agree on: upward mobility.”

It’s already happening. At the Brookings Institution, Richard Reeves argues that while inequality is important, the defining issue of our era is “the shocking, illiberal, immoral transmission of poverty and affluence from one generation to the next.” Social mobility is the new deficit reduction, and luminaries from the left (Kirsten Gillibrand) and right (Paul Ryan) can both agree it’s a problem. Even David Brooks is concerned. Marco Rubio has already sketched out the battle lines: “It is this lack of mobility, not just income inequality, that we should be focused on.” At the core, the question about whether our society should focus on inequality or mobility gets to a significant schism built around one central question: Is inequality fundamentally immoral?

McElwee's piece is thought provoking, to say the least. He demolishes the underlying premise of those promoting the "it's not inequality, but upward mobility" position, that markets are inherently just and a society where property is distributed according to merit is optimal.

To accept that upward mobility alone can cure society ill’s, to accept meritocracy as the ultimate goal, is to accept markets as the means of determining merit. When we talk about “upward mobility” and “meritocracy,” we implicitly assume that those who succeed have “merit,” while other do not. However, it was Friedrich Hayek, a free-market champion, who noted that capitalism should not be considered a “meritocracy,” because markets don’t distribute based on merit, but rather demand. Jamie Dimon and Lloyd Blankfein, markets have decided, deserve more than Hannah Gay, Katherine Luzuriaga and Deborah Persaud — the scientists who cured a newborn of HIV this year. Thus, when we accept upward mobility as a goal we must also be willing to accept that markets determine who goes up and who falls down, rightly or not. And when we accept “growth” as a goal, we assume that GDP is a useful metric to determine social progress (which it is not).

This illusion of  “meritocracy” poisons the way we talk about inequality, and how to fix it. In discussing “redistribution,” my colleague Matt Bruenig points to Murphy and Nagel’s work on “everyday libertarianism,” or what Marx might call “false consciousness”: People who live in capitalist societies make assumptions like the idea that a market distribution is inherently legitimate, and therefore that a government involved in economic matters is “re-distributing” resources. In the same way, we talk about “upward mobility” in terms of “merit,” assuming that markets determine rewards justly, according to some abstract notion of what “merit” means. The first right in a capitalist society appears to be “thou art entitled to the market’s distribution.”

The mobility vs. equality debate is directly tied to how we define the American dream. And conservatives have had tremendous success on that front. In recent years, the American dream increasingly is described as the possibility in America of going from rags to riches. But, historically, the American dream has been the ability of any American who works hard to have a decent life. Many on the left, particularly establishment Democrats, have quietly acquiesced to the redefinition. If we're going to keep the focus on inequality, we need to reboot the definition of the American dream.  

Comments

[Thucydides]

Excuse me, Mobility is equality, if its done through strengthening human capital. Unfortunately, we,ve had six years of weakening of human capital and inequality is worse and getting worse stillyet.

Only 58 percent of our adults are in the work force a loss of 16 million jobs. This blog lapses into euphoria when 200,000 jobs are created. Thats not even rounding error on the number of jobs that have been lost. Young workers, minorities and women have been brutalized by these policies. Wages for 19 to 24 year olds have fallen dramatically for six straight years.

Labor force participation for teenagers has dropped from 45 prrcent to 22 prrcent.

The median duration of unemployment is 30 percent higher than any time in recorded history (50 years).

And, now you want more of the poison that created all this and you want to call it a cure.

[Bob Lord]

You speak of this problem as having developed in the last 6 years. But GW Bush was President 6 years ago, and for the 7 years preceding. We know there's a lag between policy implementation and impact, so the numbers during not only the last year of Bush's presidency, but also the first several years of Obama's would have to be attrbuted to Bush-Cheney policies. And those policies were to cut taxes and deregulate. So, to say the numbers you posted in your comment are intellectually dishonest would be to say the weather in Siberia in the winter is a bit chilly.

But really your analysis is worse than that. Inequality has been worsening since the early '80s, when we were cutting taxes and deregulating industries. Mobility has declined, if at all, only recently. So, if mobility is equality, why didn't mobility decline along with equality since the early '80s. In any case, why is it that inequality began to worsen shortly after the onset of Reaganomics?

In any case, over the past 30 years, the share of our wealth held by just 400 Americans has increased from under 1% to a whopping 3%. That concentration of wealth, 3% of our wealth held by about one one-millionth of the population, has nothing to do with mobility, but everything to do with inequality. In fact, mobility into the Forbes 400 actually would increase inequality, not decrease it.

Finally, my point in posting about articles like McElwee's piece here is to encourage readers to click on the link, read it for themselves, and perhaps comment. You didn't bother to read McElwee's piece before rejecting it and posting your tired old talking points. I can't stop you from doing that, but, frankly, that's not welcome here. I have no problems with a conservative posting comments that are germane and thoughtful. But your comments are neither germane nor thoughtful.

If you feel the need to get your talking points out there, the appropriate vehicle would be start your own blog.