Inequality and the New Aristocracy

Tuesday, February 17, AD 2009

Running into this article the other day, I was startled to find how many of my own intellectual hobby horses it touched upon. Arnold Kling and Nich Schulz are economists, and their topic is in equality in the modern economy. They cite Google co-founder (and billionaire) Sergey Brin as an example of many of the forces they believe are driving inequality and list the following major forces:

Technology: Brin’s wealth comes from the famous search engine he pioneered with cofounder Larry Page. Their company is a mere ten years old. And yet in the blink of an eye, he has become one of the richest men in the world.

Winners-take-most markets: Certain mass-market fields tend to simulate tournaments in that they produce just a few big winners along with many losers. These include technology/software, as in the case of Google, but also entertainment (Céline Dion), book publishing (Stephen King), athletics (Tiger Woods), and even some parts of academia, finance, law, and politics (as the impressive post-presidential earnings of George H. W. Bush and Bill Clinton demonstrate).

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14 Responses to Inequality and the New Aristocracy

  • So really bright people from egghead families tend to succeed. Maybe not on Sergey Brin’s level, but still likely for success. Say this is something the Church could emphasize in defense of the families. As I work each day in one of America’s toughest neighborhoods, I see sad evidence of this fact. In fact, much of this data would look remarkably similar two hundred or so years ago in transition from agrarian to industrial-based economies. Meaning- the other information and commentary tends toward boo hoo hoo we don’t like change. Deal with it. Coming atcha faster and harder than before. You can thank Brin and his fellow Internet innovators for that fact. Will even surpass what our all wise and loving congresspersons have cooked up for us in the Porkapalooza bill. A major gift we can provide for our younguns is to train for change. It is impossible to imagine what their world will be like two decades hence. Just as our current stuff was impossible to thunk up twenty five years ago. But some factors never change. The role of the family. The need to nurture and train youngsters in a stable, loving home environment- with hugs and boundaries in equal measure. Sweat not this stuff. The Church has seen worse. The world will eventually catch up to us. Even bright people on the Sergey Brin level.

  • I think a major problem in our world today is our near worship of “productivity” and “growth”. We have made man a slave to our machines, which increase productivity at the expense of making workers redundant. The ability to produce more widgets, faster is not a gain to society if it increases unemployment or makes men into mere “machine minders”.

    E.F. Schumacher said it best when he said “If that which has been shaped by technology, and continues to be so shaped, looks sick, it might be wise to have a look at technology itself. If technology is felt to be becoming more and more inhuman, we might do well to consider whether it is possible to have something better – a technology with a human face.” What he called “intermediate technology”.

    We fail in living our faith when we allow and encourage the growth of huge companies and complex technology that creates few “winners” and many “losers”. I think you are wrong in thinking that the barriers to economic “success” can be overcome with determination. Those who don’t read by fourth grade are never fluent. And you really can’t pass on what you have never had. Those who feel they cannot succeed will rarely redouble their efforts. Most will rightly perceive that the deck is stacked against them and instead rage against the injustice that has made them useless. Which is exactly what our economy has done to those who are not inclined to the work of the mind.

    Cheaper goods in ever more quantities is not a solution but rather a problem as it has made millions of honest hard working people redundant and useless without hope for good employment. Those in the bottom tier of work are treated worse than children, looked down on, treated with suspicion. Their work is soul deadening and mind numbingly repetitive. Their bodies are destroyed and to top it all off, they have to listen to their economic “betters” tell them that their failure is their own fault. If they only had enough “determination” they could succeed.
    Sorry for the rant, I’ll stop now.

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  • Jessie,

    I’m sympathetic to what you’re saying in broad terms, since as a traditionalist sort of conservative I’m strongly disposed to look fondly on the ways of the past and be suspicious of that which is “modern”. At the same time, though, I think it’s important to be realistic about the sorts of realities that we get past by increasing productivity and becoming “slaves to machines”.

    What I’d question, though, is whether increased productivity necessarily means being enslaved by machines, or rather being freed from servile work. In the American folk tale of John Henry and the steam driver, John Henry is a symbol of humanity striving against having a machine take his job — yet in the long run isn’t driving a steam driver generally an occupation more contributing to human thriving than swinging a sledge hammer by hand?

    Automating a factory further can result in eliminating jobs, but in a deeper sense: is standing in a factory all day where those people should really be in the first place?

    So while I don’t think that ever cheaper and ever more goods in and of themselves are a “solution” in life, I’d tend to see increased productivity as a good thing nearly all of the time, since it frees us up to engage in increasingly skilled work rather than servile work.

    The challenge, as I would see it, is in trying to make sure that people are able to thrive in that increasingly complex environment. As you say, people who don’t learn to read and learn well early in life can find themselves trailing permanently. That’s an area in which I see few easy answers, as all the research I’ve seen suggests that the most key time is very, very early in development: often birth to four years old. I see little ability for larger social institutions than the family to influence that period, and that increases the danger of people whose parents were not educated not being educated themselves either.

  • Why should the choice be between standing in a factory all day or being left behind in the “complex” environment. If we eliminated the outlandish automation, then we could have men employed in a factory doing real work in producing real things and not just repetitive machine minding. The choice is not between machines and men, the choice is between using machines to replace men and using them to enhance man’s creative abilities.

    I would further argue that a steam driver would be not be a positive contributor to humanity if it meant that one person now had a nicer job at the expense of the dignity of many men now left hopeless with no employment prospects and thus little left to offer their families. First, such men are not likely to step up and BE family men. Men humiliated by an inhumane economic environment are not going to be good family men and will thus most likely contribute to a poor social environment. And in fact, we see this played out in economically “blighted” areas.

  • I’ve long thought that the reason winner-take-all occupations would be increasing inequality (compared to the past) is at least in part just because our country is bigger and richer. Being the best basketball player in 1950 is very different from being the best basketball player today, simply because today there are more people who have more money to spend on you. Whereas janitors don’t have the same opportunity to sell their services to more and richer people.

  • Jessie,

    What you’re describing is often called the “lump of labor” fallacy. Man vs. machine is a false opposition, as is the idea that there are only so many jobs to go around. The mistake is in thinking that no new jobs are created by productivity gains. The problem is the education differential, as Darwin points out. People who don’t have enough education or job skills, especially when they lose their career field in middle age, are in a difficult position to switch careers.

  • j. chrisitian, I wasn’t pitting man against machine. I was pointing out that when we stop using tools to enhance the work that men do and start using machines to replace the men themselves, than we have begun moving down a path that leads us to start treating men as machines. Indeed, we are no longer called citizens but our leaders now call us consumers.

    Saying we will re-educate those now redundant men to flip burgers, make lattes, and sell more stuff is not really a solution. And it further dehumanizes those real people who are really unemployable due to ever increasing worship of technology and gigantism. They are not just numbers and we can’t just wave an educational wand at them and, voila, they are now skilled in another career they did not choose but we are sure is just as rewarding.

    Those graphs show that the people needed to actually produce real items is decreasing. So what are all those people doing now? They are pushing wealth around in the health and education fields. But those fields don’t actually produce wealth, they merely facilitate its transfer. How many CNAs do we need (and they have crappy jobs for lousy pay) How many underpaid “para educationist” do we need?

    I don’t think it is a good for us to ever forcefully reduce the number of people who are allowed to work in actually making things and growing food. Its especially wrong to not debate the appropriate level of technology and just assume that more must be better because it has gotten us to where we are. Because where we are is not necessarily good. Machines are tools and they should serve our greater good, we should never be sacrificed to the machines.

  • Jessie,

    “[U]sing tools to enhance the work that men do” and “using machines to replace the men themselves” are just two different ways to describe the same phenomenon. When I type these words into a keyboard instead of having them written down by scribes and carried to you by messengers, I am using tools to enhance the work I do, but I am also using machines as a replacement for men who would otherwise have to do those tasks (if they were to be done at all).

  • Blackadderiv,

    Yes that is true, but you missed the main thrust of my comment. There is a difference between the evolution of tools making certain jobs unnecessary and the goal of eliminating workers in order to decrease “labor costs”. I am glad for my modern household tools and they eliminate the need for servants, but they have merely made the homemakers job easier, not redundant. Likewise, we have technology that has made your writing easier, but you are still needed to do the writing. But that said, you cannot ignore that many jobs have not been made easier but eliminated or made soul deadening by machines. Machinist have been replaced, weavers have been replaced, farmers have been replaced, craftsmen of all stripes have been replaced and our society is less for it.

    And of course, my main point has not been addressed, and it is simply this; that we need to have a debate about the appropriateness of different levels of technology and how they affect us.

  • From the article quoted above: “Given the other forces driving inequality, there may be less that government can do than one might hope. Research from Heckman suggests that education is a relatively feeble remedy for the effects of family background (although Heckman believes that early intervention, in preschool or even before, shows promise).

    In order to make a dramatic impact on inequality, government would have to do something about the fundamental causes: technology and marriage patterns. However, putting a brake on technological progress seems hardly feasible or desirable. And forcing people to select mates at random rather than on the basis of similar backgrounds and tastes seems similarly unlikely. As much as inequality may be a problem, no real solution is in sight.”

  • There is a difference between the evolution of tools making certain jobs unnecessary and the goal of eliminating workers in order to decrease “labor costs”. I am glad for my modern household tools and they eliminate the need for servants, but they have merely made the homemakers job easier, not redundant.

    There might be a difference in one’s personal intent, I guess I’m unclear, though, whether there’s necessarily a difference in the visible action or process.

    I would hope that people weren’t thinking, “We’ll buy that modern washing machine and dryer and dish washer, and then we’ll fire old Mrs. Smith who always did our housekeeping for us. Good thing that’ll save us 5% a year.” Indeed, perhaps many household which bought “conveniences” did so in order to make the lives of the “the help” easier. But somewhere along the way the vast numbers of people who were “in service” in 1900 dwindled away. I suspect part of it is that people came to expect more out of their livelihoods than being “in service” could provide. And also as a new generation of people moved out on their own, they found that they could afford the conveniences that allowed them to do their own housework much more easily than hiring help, and so young families never hired servants.

    Whatever the millions of individual motivations that added up to the trend: the career of being “in service” is pretty much no longer available, and while I enjoy watching Upstairs Downstairs as much as the next bloke, I’d tend to think that’s a good thing.

    Similarly, the forklift allows a company to move things around a warehouse much faster than they could have with teamsters carrying things by hand. And it allows people to work later in life at their warehouse jobs without suffering the disabling injuries that would put most hard laborers out of work by 40. But at the same time, it allows a company to ship much larger volume with fewer people. Which at some point means less jobs for hard laborers.

    So while I do agree that we have a human and moral duty to those who work with us and for us to, I think the tendency towards productivity is not only overall a good thing, but probably also pretty much an inevitable factor that we need to work with rather than against.

  • Jessie,

    In order to make a dramatic impact on inequality, government would have to do something about the fundamental causes: technology and marriage patterns. However, putting a brake on technological progress seems hardly feasible or desirable. And forcing people to select mates at random rather than on the basis of similar backgrounds and tastes seems similarly unlikely. As much as inequality may be a problem, no real solution is in sight.”

    The inequality is not based on marriage patterns or technology. Every study shows that it is almost entirely based on moral choices – principally out of wedlock births. The only thing that government could do to help resolve this is to get out of the business of enabling it.

    I notice that in providing examples of how technology has eliminated the need for menial work (scribes and servants) the posters suggested that they would not need these workers… I submit that most of us unless to the manor born would actually be doing these jobs if it weren’t for technology, not hiring others to do so….

    There are so many issues with our society that are at the root cause of injustice. With the proliferation of double income families, we nearly double the workforce. This drives down wages making it difficult for a single wage earner to support his family.

  • I think the tendency towards productivity is not only overall a good thing, but probably also pretty much an inevitable factor that we need to work with rather than against.

    I don’t think the argument is that productivity is a bad thing, just that we don’t have a lot of thought about when there is to much. At some point, the increase in productivity fails to bring any real help, and actually may cause harm. Much of the negative environmental conditions can be directly attributed to the side effects of productivity gains.

    A good analogy would be medicine. Medical advances have been staggering and wonderful. Medical advances are not wonderful when the violate the Hippocratic oath. Medical advances are not wonderful when they break people rather than heal them. Medical advances are not wonderful when they are used in the service of eugenics to create a race of ‘super-men’. Could society benefit in some ways if we lifted these restrictions – yes. Would society as a whole benefit – no.

    A good tool is a good tool, and productivity does help humanity. However, tools scaled to monstrous proportions with the intent that people be molded to fit the machine, rather than the machine to the people should be as abhorrent as eugenics.

Just An Observation

Monday, February 16, AD 2009

Wyoming recently has passed legislation that “bans” smoking in public places (except for a list of particular establishments where smoking is still permitted, and except for any county or municipality that doesn’t want to participate in the ban).  There once was hope of increasing the “sin tax” on chewing tobacco.  Elsewhere in the nation, we have had strong campaigns to reduce smoking for sake of health and public expenditure.  Now the campaigns are shifting gears and targeting refined sugars, transfats, and calorie-laden meals.

I understand, to an extent, why people are so concerned about how many times we vist McDonald’s, or much fat is in that bag of potato chips, or whether or not we buy “Biggie”-sized soft drinks.  As we continue to pay for insurance, either private or governmental, the effects are clear.  Bad health practices lead to increase in expenses.  Yet what I find odd is how the whole matter is couched almost as a moral dilemma, a moral crusade.  Isn’t just unhealthy to partake of deep-fat-fried potatoes–it is an abomination that should be punished.

Now, I seem to remember a certain gentlemen who came around saying something like: “Do you not realize that everything that goes into a person from outside cannot defile, since it enters not the heart but the stomach and passes out into the latrine?”

Is it just me, or is our society unwittingly attempting a reversion back to the Old Covenant (though we’ll pick different foods to declare “unclean”)?

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11 Responses to Just An Observation

  • Worst of all, bacon is unclean under both regimes.

  • OH NO!! That means I’m going going to have to make my Bacon Explosion (http://www.bbqaddicts.com/blog/recipes/bacon-explosion/) in secret!

  • We live in an odd era. Having extra-martial sex? No big deal (don’t forget that condom). Eating a Big Mac – for shame, do you know how many fat grams are in that thing? Abort your child – no problem. Light up a cigarette within 50 feet of non-smokers and you’re a pariah. (I am an ex-smoker and don’t like when people light up around me either, mainly because it makes me want to have one.)

    When health becomes a religion, well, it follows that government officials decree “clean” and “unclean” foods. Maybe we’ll see a return to the “Scarlet Letter.” Instead of punishing people for adultery, the New Puritans will make them stand on the street corner with contraband twinkies or chocolate bars sticking out of their mouths.

  • Bill, my heart went into palpitations just looking at the finished product! Yikes! I can’t wait to try it…

  • A soon-to-retire gent that I take the evening train with just returned from a two-week trip to Alaska. He and his wife went there and put an offer in on a house because, in his words, We just want to be left alone and the states in the Northeast don’t seem to understand that”

    I understand.

  • I am firmly of the conviction that all bars ought to be smoke-filled and that there ought to be a two smoke minimum for certain establishments. I want a state to pass that law!

  • Donna V.

    Perhaps not a scarlet letter, but some golden arches will be the badge of dishonor. Then they will be “boiled in their own pudding,” and buried with a steak on their heart.

  • S.B,

    I saw that Mark Shea had linked to that on his blog, and that started me thinking. The observation comment comes out of that article, but I felt was enough of its own thought that it stood alone without the trace back. Perhaps I was wrong.

  • This may sound a bit shocking coming from an otherwise conservative Catholic who’s never intentionally inhaled anything for amusement (other than helium balloons), but if we’re going to crack down on alcohol, tobacco and fattening food to the point where they are almost illegal, why not treat marijuana the same way — legalize it, but tax and regulate it to death, don’t allow it to be smoked in public places, and save the “war on drugs” for the really dangerous stuff like crack, heroin, and meth.

    Yes, pot is mind-altering but so is alcohol and that’s legal. From what I understand it’s not any more addictive or harmful to one’s physical health than tobacco, and that’s legal too. From a moral point of view I don’t see where a pothead is that different from an alcoholic or chain smoker. No material thing or substance is evil in and of itself; it only becomes so when misused.