The 9.9%

I wanted to draw your attention to an article by Matthew Stewart in the Atlantic, remarking on the development and divergence of the 9.9%:

By any sociological or financial measure, it’s good to be us. It’s even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below. But we do have a blind spot, and it is located right in the center of the mirror: We seem to be the last to notice just how rapidly we’ve morphed, or what we’ve morphed into.

The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we’re playing, everybody loses badly in the end.

Read the whole thing. Those of you who are regular readers here may notice that this is a subject to which I’ve returned a number of times. I’m much more concerned about the allegedly meritocratic 9.9% than I am about the .1%.

Bill Gates is the son of a physician as is Mark Zuckerberg; Jeff Bezos’s father owned a bicycle shop (his mom’s second husband was an engineer). None of them were part of the old plutocratic aristocracy but grew up among the 9.9%. We’re always going to have those ultra-rich high-achievers with us. There are only a small number of them. If I were king, there’d be a lot more downwards mobility; the barriers, not just economic but social, to the high-achievers leaving their offspring enough money to be idle should be formidable. But that’s a different subject.

What concerns me is the 9.9%. As documented by Mr. Stewart we control 60% of the wealth and an enormous proportion of the total national income and they’re highly dependent on subsidies. When you combine that wealth and dependence on government with a possibly realistic sense of entitlement and assortative mating it’s deadly to the sort of egalitarian society I’d like to live in and which has been more the norm in American life.

That’s not the only danger we pose. What if Schumpeter was right? Joseph Schumpeter was an early 20th century economist. He coined the phrase “creative destruction” to describe the effects of the capitalist system. One of his most famous claims was that the “intellectual class”, which is what the 9.9% is, would destroy the capitalist system that brought it into being. That’s not a prospect that I think any of us should relish.

9 comments… add one
  • Modulo Myself

    ‘King’ is the operative word. Your ideal is a feudal society, Dave. There’s nothing unique about the meritocracy–it’s just slightly more cynical and sophisticated, which has caused the rest of America to delude themselves into believing a really bleak fairy tale. America has never been egalitarian. It has always taken and taken. There has always been assertive mating, clubs, societies, fraternities, and sororities, and good families and bad families.

    If capitalism literally can not deal with people making money and then acquiring social capital, then it’s truly feeble and should burn to the ground.

  • Your ideal is a feudal society, Dave.

    Nonsense. My ideal is more like Jefferson’s. I value independence. I’d just like independence extended to more people.

    However, it’s noble of you to leap to the defense of the richest people in the world.

  • steve

    Some odd things here you should probably sort out. The 9.9% has about the same amount of wealth, a bit less actually as it has had since 1930. Are you making the case that government subsidies have been there keeping them in that place for the last 90 years? I find that a little hard to believe. How much is that group able to influence policy? Some, but those in that top 0.1% can now finance campaigns, think tanks and control big chunks of the media, all by just one person or family.They now have so much wealth that there a lot of people in the top 0.1% who can do that, and we now have a bunch who want to do so.

    So, I can see some issues with the top 9.9% and some of these points ring true, but I still think it is the change in the top 0.1% which has resulted in the changes that have been bad for us over the last 30-40 years. Just based upon the wealth data, the top 9.9% has not changed in almost 100 years.

    Steve

  • Gray Shambler

    Yeah, and many of us learn that as we get older. There’s nothing we can do about it except do without and take pride in being poor.
    It does hurt when it comes to our childs and grandchilds though.

  • Andy

    ” How much is that group able to influence policy? Some, but those in that top 0.1% can now finance campaigns, think tanks and control big chunks of the media, all by just one person or family.”

    One can argue that hasn’t changed much either.

    I think what has changed is the ability of government to influence outcomes and put a hand on the scale.

  • Jack

    The video conveniently failed to mention that the world population has doubled since the late 1980’s. The 9.9% (of which I am happily a part) hasn’t changed much in 100 years aside from the fact that we’re now barely breeding at maintenance levels. The less educated and more religious, conversely, are having kids like rabbits. The question is, how is that my fault?

    A person has no money but against all logic, has children anyway, making more people who have no money and thus more people with limitations on upward mobility. But somehow the rest of society is responsible for that poor choice?

    Of course if you start with something, you’re likely to be better off than others who start with nothing on average. But forcing “nothing” on the children of the 9.9% (including the 0.1%) through some wealth redistribution scheme doesn’t solve anything in the context of ever-growing need, does it? You could distribute all the wealth of the 0.1% in the US to all US citizens and illegal aliens residing here illegally (the way illegals do) and each person would have an extra…what…$2K?. I guess everyone can afford that mansion and yacht they’ve always dreamed of now, right?

    The poor, as a demographic, are only going to grow. And grow. And grow. There’s only so much beer and fried chicken (earth) available but you think the people who have learned to hold onto their money and use it to make more are the issue?

    I assure you, it’s not a “system” that’s responsible. Plenty of Friday millionaires have gone broke on Saturday when they didn’t need to. That’s poor decision making ingrained in culture. That can be changed generationally but it takes a lot of effort. In short, good luck legislating away human nature.

    As for me, I don’t care about socialists like you because I’m already old and it will take a decade or two for your ilk to ensure everyone is living a lowest common denominator and paying 95% income tax to a bloated, wasteful government that wants to control where and when people can fart. No one will have any reason to work hard or invent the next best thing because people like you will have negated any benefit to doing so (along with expressing intelligence, aptitude or just good old fashioned elbow grease). Welcome to an idiot’s utopia!

  • Don Salmon

    I’ve been looking for someone to provide a less black and white view of the so called 9.9% (of which I’m not a member) but I guess I’ll have to settle or Jack’s note. I’m assuming Jack spent hours crafting a satirical take down of an entitled 9.9%-er, because nobody could have written that except tongue in cheek.

  • Mark

    The wealth range cited in the article for the 9.9% is 1.2M to 10M. That is a large range and I would say being at the lower end is not the same as the high end at all. Maybe the 4.9% is the real focus.

  • It has been said that income and wealth in the U. S. are fractal meaning that for any given fraction of earners the top .1% of that fraction account for a disproportionate amount of the whole.

    IMO there’s a qualitative difference between the topmost .1% of income earners and the next 9.9% and the difference is how dependent that next 9.9% is on subsidies.

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