This is not likely to be a popular post. Just warning you.
I have a bias that modernity is more fragile than commonly believed. One aspect of that is income/wealth distributions. Inequality was far more pronounced in the past, and was fairly stable in being so. So why should the last 150 or so years not be viewed as a possible aberration?
Let me give you five or so reasons why the middle class should shrink:
1) Education — middle classes in the developed world were relatively large when the education systems produced a large portion of the educated people of the world. That is no longer so, and relative education levels have tipped against the US. Any surprise that we fall behind?
2) Lazy choices for majors/jobs — “follow your bliss” is stupid advice if no one wants to fund your bliss. All prosperity comes through serving the needs of others. Follow their bliss, not yours, and you will do well.
3) Technology — some technological advances aid equality, and some aid inequality — we have been getting more of the latter lately. If a technology aids one person to serve many at low marginal costs, it will aid inequality, unless the technology is broadly shared and used.
4) Global Conditions — Resources are scarce. Capital is somewhat scarce. Unskilled labor is not scarce. Skilled labor is somewhat scarce. For those that have not prepared themselves to be productive by having needed skills, it is a tough time. You won’t be carried along by the prosperity of your nation, because there are many others competing against you overseas, which was not true in the 50s, 60s, and 70s. (Nor even the 80s and 90s, in degree…)
5) Personal Ethics — Societies that tolerate many children conceived out of wedlock, and no-fault divorce create an underclass of poor women with children, and the children are far less able to compete because they have no father figure.
6) Politics won’t change things — this is yet another hard reality. People may vote, but money/resources “vote” more. Especially in societies where education has slumped, power gravitates to those that will better the whole, even if it means the elites get more.
Someone please send the memo to the “Occupy” crowd, and tell them that have succeeded at being the “freak show” amid changing times, but utterly irrelevant to the changes happening around the globe. If they have jobs, get to them, if not, go find one. You might be relevant then.
Appreciate the note about “Lazy choices for majors.” As a physics teacher, I’m constantly fighting the “it’s too hard!” reaction from students. It’s hard for you, but it’s also hard for Indian and Chinese students (and many of them study harder)! Ultimately, only “hard-to-get” knowledge is of any benefit in education. I wish you weren’t right about the historical uniqueness of a large middle class. “give me neither poverty nor riches, but only my daily bread.”
1/2) My study hall just had a discussion about this. The kids who care about learning (or at least understand that a good education is their ticket to a bigger paycheck) are furious that they have to be saddled with classmates who will disrupt their learning and (therefore) steal from their education as teachers have to stop lessons to deal with the malefactors. I also now have a regular stream of juniors & seniors asking me for college major advice. Every discussion ends with “oh that’s too hard” as I note what’s required for this week’s interest. I don’t know how many more home-grown engineers we’re going to have…
3) On the AP Physics email-forum there’s been a discussion recently about the Khan Academy and online schools. That’s a technological “innovation” that several teachers on the forum fear will further divide the wealthy (who will pay for classroom teachers) from everyone else (who will get classroom baby-sitters & online teachers). There are significant practical difficulties (see #5) but then there’s #6: “money / resources vote more”. Any thoughts on the odds of this actually happening?
I agree 100% with your points. But given human nature I think its difficult to expect majority of the people in a country to vigilantly work on point 1, 2 and 5 after living through 40-50 years of unrivalled material comfort in history.
We have had leaders that have been eagerly pandering to a naive/ignorant electorate for their own benefit instead of leading the people to do what is better for the future at the cost of today. At the same time, I am not sure we can elect anyone who doesn’t pander either.
I think the first two sentences and the last paragraph were unnecessary. David, I think you might have cut it yourself had you slept over it. Otherwise, couldn’t agree more with you. Thank you
I agree. I see the OWS as an emotional response to realizing what a harsh world we live in after being fooled by our leaders/media/society as well as our own self-delutions. I think its an understandable response and its a voice that needs to be heard.
Apologies. It is hard to focus something to the precise level of critique. I often get criticized for being too light/forgiving in my words.
With your logic, if a large middle class is an anomaly, then that makes something like OWS a normal and historically frequent occurrence.
“If they have jobs, get to them, if not, go find one.” Isn’t the fact that there aren’t jobs why we’re in the current predicament? If the bailouts produced jobs, there would be no OWS.
I wrote extensively against the bailouts, and how they did not preserve jobs. Where I differ with OWS is that protest can’t create jobs; neither can the government, on net. An effective protest, in my opinion, would generate a third party… OWS shows little ability to gather its strength and focus it effectively.
David,
Regarding your comment “I have a bias that modernity is more fragile than commonly believed”, it would be great to see a post elaborating on your thoughts here. I agree with the thought but would be very interested in seeing your reasoning.
This is somewhat related to the whole question of what time period to use in parameterizing economic models; up until the financial crisis the post WWII era was often regarded as the only relevant period for determining parameters based on historical experience. Since then at least some modelers have sought to include some pre-WWII experience. In a broader context much of what we regard as nornmal today is true only for the period since the industrialization of Britain circa 1800. It is not clear that trends over that time period should be projected into the future.
huskercr
This seems a reasonable riff on the chronological fallacy, assuming that the most recent history is most relevant simply *because* it is most recent. However, I don’t see why pre-modern economics should be normative, either.
We live in a capitalist economy in which improvements in productivity continue to surprise to the upside. Such developments as improved technology and gains from trade show no tendency to slow, and they are the foundation upon which much of our global wealth has been built.
If inequality is growing, you need to show why, since 1980, this has been so. Galbraith claims that it is due to the growth of the financial sector, but that is an argument from correlation. Trade and the rise of services explain some of the inequality, but not all of it.
It’s good to acknowledge your biases, but to paraphrase Kissenger, just because you’re biased doesn’t mean you’re right.
“Inequality was far more pronounced in the past, and was fairly stable in being so.So why should the last 150 or so years not be viewed as a possible aberration?”
Is there some factual basis for this broad statement or is it merely a convenient premise for starting your tirade?
“Lazy” choices? When really smart people can barely guess what is going to happen to the market even seconds into the future how can you “blame” young adults for making “wrong” choices when choosing majors that they will be completing four or more years into the future?
Then just throw in the veiled “welfare mom” reference in point 5.
To the chronological fallacy I would also add simple Survivor Bias. The arrogance of those lucky enough to have made the “right” choices who must justify their success in a way that eliminates any sense of responsibility to anyone other than themselves.
As for the first point, I didn’t think anyone would question that. Agricultural societies, Monarchies, Aristocracies of old had far more income/wealth inequality than we do now.
And, this is not a tirade. This is something that I have wondered about for a long time. I genuinely hope that having large middle classes is normal. I fear that it is not so, perhaps you have read my post, “Rethinking Comparable Worth?” That one is even more controversial, though it didn’t generate the heat that it did with you.
Yes, lazy choices. I have seen it in my own children, and in children my children associate with. This is a common problem, as Duran and Alex, two high school teachers who are quite bright, would tell you about. It is all too easy to avoid math and the sciences, and engineering, and settle on lesser areas like economics, business, philosophy, etc. I single those out, because that is the way I went. If I had it to do all over again, I would have stayed in Chemistry, and you wouldn’t be reading me now, most likely.
You show your own bias with your welfare mom comment. I always fault the man. I have adopted five children that men would not take responsibility for, in addition to the three that I sired with my wife. Men create poverty through their unwillingness to own up to their actions, the results of which create female and child poverty.
Your last comment presumes too much. Some of us work in the trenches, trying to aid the poor, most of which is trying to change ingrained life habits, and it isn’t easy. You try helping people who have made a hash of their lives, and you will find that it is hard work. The government can offer various types of assistance, but that is valueless without changing the attitudes of people so that assistance is a desirable thing to them.
My wife would be annoyed with you, because she looks at my hard work with pride that I made the right decisions for the good of all of us, and all those around us that we aid. Me? I understand. It is unpopular to suggest that some people are lazy, though we all know it is so. I knew that when I wrote this, but I took the risk anyway, because it needed to be said.
If you still have more to add, go ahead. My friends and I are conservative, but have been active in poverty ministry.
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