Class Matters

The myth of the self-made man is American culture's own special heart of darkness, helping to explain both its infectious optimism and ruthless greed.

The idea holds enough truth and seductiveness to make it easy to forget its delusional dangers. To reprise Marx's famous formulation, individuals, like humankind, do make their own personal history, but not under conditions they choose. But in America, we choose to ignore the caveat about conditions at our peril.

The myth, or belief, that people are solely what they make of themselves is useful to keep in mind while reading two ongoing series: the New York Times' on class and the Wall Street Journal's on social mobility. Both focus attention on a truth about American society that runs counter to most people's deep-seated beliefs: There is less social mobility in the United States now than in the '80s (and less then than in the '70s) and less mobility than in many other industrial countries, including Canada, Finland, Sweden and Germany.

Yet 40 percent of respondents to a Times poll said that there was a greater chance to move up from one class to another now than 30 years ago, and 46 percent said it was easier to do so in the United States than in Europe.

Although the news about social mobility has not been widely reported, it is generally recognized that inequality has grown over the past thirty years. The Times series highlights how much the super-rich have made out like, well, bandits.

While the real income of the bottom 90 percent of Americans fell from 1980 to 2002, the income of the top 0.1 percent--making $1.6 million or more--went up two and a half times in real terms before taxes. With the help of the Bush tax cuts, the gap between the super-rich and everyone else grew even larger.

The American people accept this, it is argued, because they think not only that there's more social mobility than there is, but also that they'll personally get rich. Indeed, a poll in 2000 indicated that 39 percent of Americans thought they were either in the wealthiest one percent or would be "soon." The Times poll was slightly less exuberant: 11 percent thought it was very likely they would become wealthy, another 34 percent somewhat likely.

"It is okay to have ever-greater differences between rich and poor, [Americans] seem to believe," David Wessel wrote in the Wall Street Journal, "as long as their children have a good chance of grasping the brass ring."

This view is problematic. First, the greater the inequality, the less likely the possibility of mobility. Increased inequality worsens the large disparities in resources that families can devote to education -- resources that are increasingly important for both entering many careers and for social mobility. A college degree, it should be stressed, is important not just because of the knowledge acquired, but because college serves as a class-biased sorting mechanism for entry to certain jobs. In contrast, the record suggests that countries with greater equality also have greater mobility. Substantive equality creates more equality of opportunity.

But even if there were mobility, such inequality would be problematic. Is it fair that society's wealth be divided so unevenly? Isn't there a decent standard of living -- rising as economies become wealthier -- to which everyone who "works hard and plays by the rules," in the Clintonian formulation, should be entitled? Great social disparity means that the financially well-off use their money and greater political leverage to protect their privilege rather than to design policies for the common good.

In defense of the rich getting richer, former Bush economic advisor Gregory Mankiw wrote in response to the Times series that the richest increased their share when the economy boomed; so if we want prosperity, let the plutocrats prosper. But the economy grew faster in the first three decades after World War II when equality was increasing than in the next three decades when equality was decreasing. In any case, if the income from growth is captured by the very rich, as it largely has been for a couple decades, this path to prosperity offers little to most people.