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May 15, 2005

Class, Status, Prada

Matthew Yglesias is unhappy with the New York Times:

http://yglesias.typepad.com/matthew/2005/05/huh.html: I'm glad someone decided to write about class in America -- an important subject -- but the Times's first take is just filled with baffling assertions:

http://www.nytimes.com/2005/05/15/national/class/OVERVIEW-FINAL.html?pagewanted=print: There was a time when Americans thought they understood class. The upper crust vacationed in Europe and worshiped an Episcopal God. The middle class drove Ford Fairlanes, settled the San Fernando Valley and enlisted as company men. The working class belonged to the A.F.L.-C.I.O., voted Democratic and did not take cruises to the Caribbean. Today, the country has gone a long way toward an appearance of classlessness. Americans of all sorts are awash in luxuries that would have dazzled their grandparents. Social diversity has erased many of the old markers. It has become harder to read people's status in the clothes they wear, the cars they drive, the votes they cast, the god they worship, the color of their skin. The contours of class have blurred; some say they have disappeared....

Why does it appear that class is fading as a force in American life? For one thing, it is harder to read position in possessions. Factories in China and elsewhere churn out picture-taking cellphones and other luxuries that are now affordable to almost everyone. Federal deregulation has done the same for plane tickets and long-distance phone calls. Banks, more confident about measuring risk, now extend credit to low-income families, so that owning a home or driving a new car is no longer evidence that someone is middle class.

Obviously, those things are happening. But if you can't tell who owns the expensive stuff and who owns the less expensive stuff you're not paying very much attention. Surely we all know the difference between a really fancy car and a less-fancy one, no? A gigantic house and a small house?

I think Matthew has misread Janny Scott and David Leonhardt. They are, I believe, trying to make three points: (a) consumption is more "middle class" than ever before, so that (b) it appears as though class is unimportant, but (c) in reality choosing the right parents matters more than ever in America today:

The economic advantage once believed to last only two or three generations is now believed to last closer to five.... [I]n the past, Professor Solon added, "people would say, 'Don't worry about inequality. The offspring of the poor have chances as good as the chances of the offspring of the rich.' Well, that's not true. It's not respectable in scholarly circles anymore to make that argument." One study, by the Federal Reserve Bank of Boston, found that fewer families moved from one quintile, or fifth, of the income ladder to another during the 1980's than during the 1970's and that still fewer moved in the 90's than in the 80's. A study by the Bureau of Labor Statistics also found that mobility declined from the 80's to the 90's.

The incomes of brothers born around 1960 have followed a more similar path than the incomes of brothers born in the late 1940's, researchers at the Chicago Federal Reserve and the University of California, Berkeley, have found. Whatever children inherit from their parents - habits, skills, genes, contacts, money - seems to matter more today.... But there is broad consensus about what an optimal range of mobility is. It should be high enough for fluid movement between economic levels but not so high that success is barely tied to achievement and seemingly random.... [T]here should remain an incentive for parents to cultivate their children. "Most people are working very hard to transmit their advantages to their children," said David I. Levine, a Berkeley economist and mobility researcher. "And that's quite a good thing."

One surprising finding about mobility is that it is not higher in the United States than in Britain or France. It is lower here than in Canada and some Scandinavian countries but 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.... [T]he United States differs from Europe in ways that can gum up the mobility machine. Because income inequality is greater here, there is a wider disparity between what rich and poor parents can invest in their children. Perhaps as a result, a child's economic background is a better predictor of school performance in the United States than in Denmark, the Netherlands or France, one recent study found.

"Being born in the elite in the U.S. gives you a constellation of privileges that very few people in the world have ever experienced," Professor Levine said. "Being born poor in the U.S. gives you disadvantages unlike anything in Western Europe and Japan and Canada."

This argument--that rising standards of living as a whole are making it appear that class is unimportant while in fact class matters more than ever--is an old one. It is one of the centerpieces of George Orwell's The Road to Wigan Pier. Orwell is distressed by the consumption of "cheap " by the relatively poor. He thinks: The system is taking advantage of the relatively poor by enabling them to consume commodities that they think are luxuries, but that in fact are not or are no longer so. It is conning them.

In the middle of the Great Depression in Britain, Orwell expected that the economic catastrophe would bring dismay, discontent, protest, and revolt. Yet it did not do so. Why? Orwell thought that even though "whole sections of the working class... have been plundered of all they really need" by high unemployment, they had also been "compensated... by cheap luxuries which mitigate the surface of life": fish and chips, artificial-silk stockings, tinned salmon, cut-price chocolates, movies, radio, tea.

Note the words: "palliative," "mitigate," "surface." Orwell is in the final analysis not pleased at all by the fact that:

the youth... for two pounds ten on [installments]... can buy himself a suit which... at a... distance looks... tailored on Saville Row. The girl can look like a fashion plate at an even lower price.... [I]n your new clothes you can stand on the corner, indulging in a private daydream of yourself as Clark Gable or Greta Garbo."

For Orwell writing in the 1930s this pattern of cheap middle-class consumption masks the reality--that the working class has lost relative income, relative wealth, and relative power. It makes tolerable what should not be tolerated: that the upper class has much too large a share of the pie.

Part of what is going on is that it is a mistake to say that the shop-girl of today has the same standard of living as a duchess of a century ago because the key element of being a duchess is being exceptional. To the extent that goods are valued not for the services they provide by themselves but as indices of exclusivity, it is pointless to produce them for more people because then they become less exclusive and so less valuable. Paul Krugman, for example, has placed himself on Orwell’s side: he would rather be middle-class in the fifties than working poor in the nineties-—even though the material standard of living of America's working poor in 1990 is higher than that of America's middle class in 1950. He:

know[s] quite a few academics who have nice houses, two cars, and enviable working conditions, yet are disappointed and bitter because they have never received a [job] offer from Harvard and will probably not get a Nobel Prize. The live very well... but they judge themselves relative to their reference group, and so they feel deprived. And on the other hand, it is an open secret that the chief payoff from being really rich is, as Tom Wolfe once put it, the pleasure of "seeing ‘em jump." Privilege is not merely a means to other ends, it is an end in itself.

It may be a very big mistake to think that human happiness is necessarily and significantly increased by piling up larger and larger heaps of material goods. Richard Easterlin in his Growth Triumphant points to evidence from public-opinion surveys that suggests that money does not buy happiness over time or across countries, and believes (though I think he is wrong) that people are no happier in the U.S. today than they are in India today, or were in the U.S. a century ago. Happiness is attained when you achieve your dreams and solve your problems. Material abundance helps you do so, but it also teaches you to dream bigger dreams and pose yourself more complicated problems. Easterlin thus concludes that modern economic growth is a "hollow victory": the "triumph of economic growth is not a triumph of humanity over material wants; rather, it is the triumph of material wants over humanity."

On the other hand, it may not be a very big mistake to think that human happiness consists in expanding our powers and capabilities to accomplish things (not the least of which are maintaining our comfort and satisfying our curiosity), and that wealth is a powerful tool to those ends. There is a standard American response to the claim that money doesn't buy happiness: "Your money doesn't buy you happiness? Then send it all to me. It will help buy me mine."

Posted by DeLong at May 15, 2005 06:59 PM