Tuesday, August 30, 2005

Social Mobility

Quoting Paul Street.
"Rags to Rags, Riches to Riches The American Dream is More Livable in the Old World"
by Paul Street;
May 28, 2005

Hey, guess what: the social class into which you are born matters a lot when it comes to where you stand on the American socioeconomic ladder. It matters more in the United States, the supposed land of upward mobility, than it does in Europe. The American Dream of "rags to riches" is less livable in America than it is in the aristocratic Old World that America rejected when its founding document proclaimed that "All Men Are Created Equal." If you don't believe me, check out the front page of the capitalist Wall Street Journal two weeks ago. In an article titled "As Rich-Poor Gap Widens in the U.S., Class Mobility Stalls: Those on Bottom Rung Enjoy Better Odds in Europe" (May 13th), Journal reporter David Wessel notes that recent scholarship does NOT bear out "the notion that the US is...a meritocracy where smarts and ambition matter more than parenthood and class." In reality, Wessel finds, the odds that a child born into poverty will climb into the middle or upper class are slighter in the U.S. than they are in "class bound Europe." According to the latest and best research, the Journal reports, the U.S. and its junior partner England are "the least mobile societies" among the world's "rich countries." France and Germany "are somewhat more mobile than the U.S.; Canada and the Nordic countries are much more so."These are interesting findings on the front page of the world's leading business class newssheet, whose editors believe that evil social-democratic and regulatory policies mire European economies and societies static "sclerosis." Two days after Wessel's article, the New York Times noted that mobility up from poverty is less common in the U.S. than in Britain, France, Canada and "some Scandinavian countries." The best the Times could say about America was that American upward mobility is still "not as low as in developing countries like Brazil, where escape from poverty is so difficult that the lower class is all but frozen in place" (Janny Scott and David Leonhardt, "Shadowy Lines That Still Divide," New York Times. 15 May, 2005). Rags to Rags, Riches to RichesHow fixed is class position in the supposedly hyper-fluid "land of opportunity?" The best current research determines, the Journal reports, that "at least 45%" and "perhaps as much as 60%" of "parents' advantage" is "passed on to their children." If you go with the 60% estimate, Wessel notes, then rich peoples' inherited edge - and poor peoples' inherited disadvantage - go back as far as five generations. That happens to take us back to the end of the Civil War and the constitutional abolition of slavery.According to Chicago Federal Reserve economist Bhashkar Mazumdor, who matched government survey data with the Social Security records of thousands of men burn during the 1960s, just 14% of American men born to fathers in the bottom tenth of the wage structure have risen to the top 30%. Conversely, just 17% of men born to fathers in the top tenth have fallen into the bottom 30th. It gets worse, Wessel notes, when you factor in race. He cites economist Tom Hertz's finding that fully 42% of blacks born into the bottom tenth of families for income fail to escape the lowest ten percent. By contrast, just 17% of whites born into the bottom tenth stay there as adults. It Gets Worse When You Look At Wealth It should also be noted that the Wall Street Journal's focus only on income mobility leads it significantly understate the real degree of socioeconomic immobility in the U.S. The astonishing extent of American socioeconomic and related racial disparity becomes more fully evident when you factor in wealth. In the U.S., the most unequal nation in the industrialized world, the top 1 percent owns more than 40 percent of the wealth. The top 10 percent owns two-thirds of US wealth, leaving the rest of us - 90 percent of the population - to fight it out for one third of the nation's assets. Things get worse, again, when you factor in race. By 1999, economist Thomas Shapiro finds, the "net worth (all assets minus all liabilities) of typical white families was $81,000 compared to $8,000 for black families" in the US. By the recessionary year of 2002, black net worth fell to seven cents on the white dollar. Encouraging InequalityMass popular ignorance of these and other facts indicating a predetermined and immobile class-race structure holds dark ideological significance in the U.S. False perceptions of the U.S. as a special land of rampant upward socioeconomic progress encourages many of its citizens to be more tolerant than Europeans of the deepening economic inequality that results from U.S.-led corporate globalization. As Wessel describes mainstream American wisdom, "it is ok to have ever greater differences between rich and poor, as long as [your] children have a good chance of grasping the brass ring." People who accept the dominant U.S. mobility myth are more prone, Wessel notes, "to elect politicians who oppose using the muscle of government to restrain the forces of widening inequality" through such measures as an increase in the minimum wage. More...http://www.zmag.org/content/print_article.cfm?itemID=7954&sectionID=10"

I agree with the data, however I reject the solution that most of the democratic conservatives (as they all are) propose. Reduction of class inequality could potentially be somewhat beneficial, but the elimination or reduction to the point of triviality of social class would be a mistake.
Class inequality is positive in a society operating according to the principals of power. The principal of power is that actions that increase the ability of a state/coalition/civillization to destroy rivals and avoid destruction are the ONLY legitimate actions it will take. States not operating on this principal have the tendency to be destroyed quickly and thoroughly. Following from this, and realising that power can only be measured in relative terms, one must get the most power into the hands of the most talented people one can access. Therefore necessitating that they become the upperclass whilst the dullards of everyday life become mere cogs in the system. As such, there is a direct relationship between a society's utilization of the talent available to it and its power. This is why social stratification is necessary.
However, the inheritance poisoned US and its similarly poisoned western affiliates, with rare exception, leave the positions of power to only those with sufficient inheritances. This is a huge waste of talent, and leaves your ruling class with a random smattering of people. As I think we can all agree, most people are far too stupid and unimaginative for power. This means that random is a very poor sample for your power class.As such I advocate the elimination of inheritance. The proceeds could easily supply start up money to all 18 year olds regardless of heritage and would be infinitely preferrable for getting talented individuals into the ruling class where they belong.