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Analyzing America's new elite

Current system perpetuates inequality, division

By Matt Haemmerle
On May 2, 2012

 

The original position is a hypothetical situation and thought experiment imagined by John Rawls in his book, "A Theory of Justice," whereby individuals select the principles and rules which will determine the basic structure of their society. The catch is that these choices are made from behind a veil of ignorance. Participants do not know their social class, gender, ethnicity, religion, inherited wealth or genetic disposition. Unaware of these traits and characteristics until the veil is lifted, individuals are more likely to distribute wealth and power equally.

Rawls is not arguing for strict wealth equality. He recognizes that people are governed by incentives and that impairing individuals' incentives would reduce the total wealth in society. 

However, Rawls identifies the tendency for wealth to accrue on one end of the social spectrum while many others are left worse off. Many of the opportunities a person has or does not have are accidental, the result of life's greatest lottery called birth.

For better or for worse, American society was not designed out of the original position. Recently, America has witnessed the rise of political plutocracy. 

Opportunity is increasingly tied to education, and educational performance is increasingly tied to wealth. In 2007, the top 20 percent of Americans owned 85 percent of the country's wealth and the bottom 80 percent owned 15 percent. 

Contrary to defenders of the current system, a rising tide has not lifted all boats. Today, the top 1 percent of Americans control 40 percent of the nation's wealth and has seen incomes increase 18 percent over the past decade.

Membership in the new American elite usually begins by attending one of the nation's most prestigious colleges and universities. Elite schools have sought academically talented students from all backgrounds, but they still draw overwhelmingly from affluent suburbs and the upper middle class. Only about one out of 20 students come from the socioeconomic bottom half of society.

The elite live in unprecedented geographic and social isolation from poor and working people. After graduation, they attend a small number of top graduate schools or find work in elite professional fields. The elite marry the elite, combine their incomes and education, and produce offspring who benefit from both. 

The lives of the elite do not intersect with mainstream America. It is not that they lack goodwill for their fellow citizens. They are just isolated and ignorant.    

Growing inequality is the flipside of shrinking opportunity and a waste of the nation's best resource--its people. In societies which are increasingly divided by wealth, the wealthy become more reluctant to spend money on common needs. The consequences of inequality are fragmentation and social unrest.

The new American elite has helped to design a self-reinforcing system that further entrenches their privileged position in society. Economist Joseph Stiglitz writes in an article for Vanity Fair, "Wealth begets power, and power begets more wealth." 

 During the past 30 years the United States has adopted the view that politics and economic markets are allies which ensure each others' freedom. The result has been the increased influence of business within politics and policies that deregulated national currencies and banking systems. 

Decreased tax rates on capital gains and the manipulation of the financial system have exacerbated inequality. In the Citizens United case, the Supreme Court enshrined the right of corporations to buy government by removing limitations on campaign spending. Moreover, virtually all U.S. senators and most of the representatives in the House are members of the top 1 percent, whom they serve and from whom they are rewarded.  

Politics must be understood in terms of interest groups----ever-shifting alliances that seek things from government. 

Certainly, James Madison recognized this when he spoke of the "violence of faction" in Federalist No. 10. He warned against groups projecting their own self-interest onto everybody else and against the interests of the community. What this means under the current political framework is that the 99 percent is too big a category to be an effective political force.       

Alexis de Tocqueville understood American society as "self-interest properly understood." It is the idea that everyone's self-interest in a narrow sense is interconnected. What is "properly understood" is that paying attention to everyone else's self-interest and the common welfare is a precondition for one's own well-being. The fate of the new American elite is tied to how the 99 percent live, and the current conditions of structural inequality are challenges that must be solved. Because the "original position" imagined by Rawls is an idealistic impossibility, the question still remains: How? 


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