1 PERCENT PATHOLOGIES Nearly all of the commentary on America’s growing inequality focuses on the ways in which skewed distribution of income and wealth is bad for those on the bottom of the pyramid: the way it leads to stagnating wages and competition for scarce positional goods, how it alienates the middle and working classes and the poor. But we largely ignore the effect of extreme inequality that may, in the long run, prove to be the most destructive: the way it makes those at the top of the social pyramid worse. Desmond Tutu, the heroic archbishop who helped lead the triumphant battle against South African apartheid, made a similar observation about the effects of the apartheid system on the white ruling class. “Even the supporters of apartheid were victims of the vicious system which they implemented and which they supported so enthusiastically,” he wrote in his book No Future Without Forgiveness. “In the process of dehumanizing another, in inflicting untold harm and suffering, inexorably the perpetrator was being dehumanized as well.” What Tutu was referring to was the moral and spiritual damage that extreme inequality inflicted on even those who dominated the apartheid system. But there are actual cognitive, organizational, and social costs to such systems as well. The slave economy of the antebellum South conferred massive material gains on a very small number of extremely wealthy white plantation owners. But it also severely stunted the development of the region. With a steady supply of low-cost human labor, there was no incentive to invent and industrialize, so that by the time of the Civil War the North was far richer than the South, though the South contained far more of the nation’s richest men. Though it’s obviously a far cry from the antebellum South, extreme inequality of the particular kind that we have produces its own particular kind of elite pathology: it makes elites less accountable, more prone to corruption and self-dealing, more status-obsessed and less empathic, more blinkered and removed from informational feedback crucial to effective decision-making. For this reason, extreme inequality produces elites who are less competent and more corrupt than those in a more egalitarian social order would. This is the fundamental paradoxical outcome that several decades of failed meritocratic production has revealed: As American society grows more elitist, it produces a worse caliber of elites. The kind of inequality that’s at the core of the problem is what we might call “fractal inequality.” Fractals are nifty shapes rendered by computers based on recursive mathematical formulas that exhibit the characteristics of self-similarity. They have a psychedelic look and are often characterized by a series of spirals of tentacle-looking cornices. If you look closely at a fractal and zoom in on one of those tentacles, you’ll see that it, too, features a set of smaller, identical tentacles, arranged in the exact same way as the larger ones off of which it shoots. Zoom in again and the pattern repeats. You could, theoretically, zoom in infinitely and keep seeing the same images over and over, each tentacle sprouting smaller identical copies, and on and on. Fractal inequality functions the same way, with the same vast inequality reinscribing itself at every level of analysis. If you look at the broad distribution of income gains, you’ll see that the distance between the top 1 percent and bottom 99 percent is similar to the distance between the top 0.01 percent and the top 0.99 percent, which is similar to the gap between the top 0.0001 percent and the top 0.0099 percent. You can think of it as a strange, surreal M. C. Escher–style tower, the top of which recedes ever upward the higher you climb. Such a distributional structure reliably induces a dizzying vertigo among those ambitious souls who aim to scale it. The successful overachiever can only enjoy the perks of his relatively exalted status long enough to realize that there’s an entire world of heretofore unseen perks, power, and status that’s suddenly come within view and yet remains out of reach. I caught a glimpse of this in 2011 when I attended the Davos World Economic Forum, the annual gathering of the global ruling class that takes place each January in Switzerland. When you arrive in the Zurich airport, your first instinct is to feel a bit of satisfaction that you are one of the elect few chosen to hobnob with the most powerful people on earth. Airport signs welcome and direct you to a special booth where exceedingly polite staff give you a ticket for a free shuttle bus that will drive you the two hours to the small ski-resort town in the Alps. But you can’t help but notice that other guests, the ones who landed on the same plane but who were sitting in first class, are being greeted by an army of attractive red-coated escorts who help them with their bags before whisking them off in gleaming black Mercedes S-Class sedans for the two-hour drive. Suddenly your perspective shifts. At first you had viewed yourself as special and distinct from all those poor saps who would never be allowed into the inner sanctum of global power that is the World Economic Forum. But now you realize that, in the context of Davos attendees, you are a member of the unwashed masses, crammed into a bus like so much coach chattel. And while you’re having this realization, those same special VIPs whom you’ve quickly come to envy are enjoying their ride inside their plush leather confines. But later that night they will find out over cocktails that those who are the true insiders don’t fly on commercial flights into Zurich, they take private jets and then transfer to helicopters, which make the trip from Zurich in about thirty minutes and feature breathtaking views of the Alps. This constant envy is the dominant experience of the Davos conference, an obsessive looking over the shoulder instilled by the participants’ knowledge that the reality of fractal inequality means there are infinite receding layers of networking happening that one doesn’t even know about! “The point about Davos is that it makes everyone feel wildly insecure,” observed Anya Schiffrin, the wife of Nobel Prize–winning economist and frequent Davos attendee Joseph Stiglitz. “Billionaires and heads of state alike are all convinced that they have been given the worst hotel rooms, put on the least interesting panels, and excluded from the most important events/most interesting private dinners. The genius of World Economic founder Klaus Schwab is that he has been able to persuade hundreds of accomplished businessmen to pay thousands of dollars to attend an event which is largely based on mass humiliation and paranoia.” The irony here is that if you didn’t attend Davos, you wouldn’t know what you were missing, but it is the nature of the endless meritocratic scramble that each success brings into view some new higher status level to envy. Davos is fractal inequality in its purest form, but so much of American life, particularly in elite circles, is similarly structured. A social hierarchy that extends ever upward instills a potent combination of egomania and insecurity. The experience of being just outside the place where we think real success is creates an even more intense desire to ascend and cultivates a dangerous willingness to do anything to pass each successive checkpoint, scale each next flight of stairs, always hoping that you’ll finally arrive at the penthouse or somewhere you can call home. In a far different time and place, C. S. Lewis articulated the emotional structure of such a hierarchy and the moral stakes of succumbing to it. Speaking to the students of the University of London in 1944, he warned them of the siren call of what he called “The Inner Ring.” “You have met the phenomenon of an Inner Ring,” he told them. “You discovered one in your house at school before the end of the first term. And when you had climbed up to somewhere near it by the end of your second year, perhaps you discovered that within the Ring there was a Ring yet more inner.… You were beginning, in fact, to pierce through the skins of the onion.” Lewis recognized that as we learn of inner rings, that knowledge provides a welcome bed into which the seeds of corruption might fall. For the experience of being just outside the elusive “inner ring” produces such a keen sense of self-doubt that it makes one disposed to do evil just to achieve entrance. “In the whole of your life as you now remember it,” Lewis asked the students before him, “has the desire to be on the right side of that invisible line ever prompted you to any act or word on which, in the cold small hours of a wakeful night, you can look back with satisfaction? If so, your case is more fortunate than most.” So forceful is the pull of the inner ring that Lewis contends that “unless you take measures to prevent it, this desire is going to be one of the chief motives of your life, from the first day on which you enter your profession until the day when you are too old to care.” The hierarchies of postwar England were different in many crucial ways from the hierarchies of twenty-first-century America, but what is the meritocracy if not an endless series of inner rings? It is quite consciously designed not only to funnel “the right people” into successively smaller inner rings, but also to stoke in them an insatiable desire for achievement, the need to penetrate farther and farther into the elusive center. But Lewis saw decades ago that a system that requires passing through a near endless series of such inner rings will also provide a near endless series of opportunities for moral corrosion. Societies whose upper class is marked by birth, title, and lineage do not tend to cultivate a voracious appetite for competition in the same way ours does. There is a certain security that comes from being at the top, but in a society of fractal inequality there is no top. There is always another height to which to ascend, more competitors to vanquish, more money to obtain. Which is why our elites display a destructive and combustible combination of egomania and entitlement on the one hand and insecurity on the other. A 2011 poll of millionaires commissioned by Fidelity found that fully 42 percent of the more than one thousand who were surveyed did not feel rich. Those who qualified for the survey had at least a million dollars in investable assets, excluding retirement funds and real estate, which placed them in the top 1 percentage of wealth. But in order to truly feel wealthy, those surveyed said they would need, on average, $7.5 million. The reason, according to Sanjiv Mirchandani, who oversaw the poll for Fidelity, was that “they compare themselves to their peer group.” Keeping up the with Joneses has been a staple of postwar American life, but the current generation has seen what was once implicit made explicit: competition is now the model for American life, and “winning” the model of success. Because competition is the central engine in the model of both meritocratic and capitalist achievement, affection for it and acclimation to its spiritual and psychological demands are inculcated from a young age. To be successful, one must never be satisfied, and so no one ever is. Our elites are conditioned to fight for every last inch of beach, to parry and thrust their way forward no matter how much they have already achieved, all of which produces two rather nasty psychological side effects. One is that it tends to make people believe they have absolutely earned what they have achieved. A legacy student at an Ivy League university certainly doesn’t feel as if she has coasted in on her father’s coattails. She feels instead that she’s killed herself for four years at her prestigious high school to earn her grades, her internships, and her postgraduate job opportunities. As was said of George W. Bush, it is tempting for those born on third base to believe they’ve hit a triple. This means we are cursed with an overclass convinced it is composed of scrappy underdogs, individuals who are obsessed with the relative disadvantages they may have faced rather than the privilege they enjoyed. It is remarkable how under siege and victimized even the most powerful members of society feel, how much they tout their own up-by-their-bootstraps story. In fact, a basic ritual associated with entrance into the circle of winners is constructing a personal story about how it was through grit, talent, and determination that you fought your way into it. Mitt Romney, the multimillionaire son of a car company CEO and governor of Michigan, told an audience at a 2012 Republican debate that if you squinted hard enough, he looked like a figure right out of a Horatio Alger tale. “And I—I mean—you know, my dad, as you know—born in Mexico, poor, didn’t get a college degree—became head of a car company. I could have stayed in Detroit, like him, and gotten pulled up in the car company. I went off on my own. I didn’t inherit money from my parents. What I have, I earned. I worked hard, the American way.” Or look at Roger Ailes. One could say, without hyperbole, that Ailes is one of the most powerful men in America. He’s been a close confidant and adviser to several presidents. He earns upward of $20 million a year. He runs Fox News, the most watched and politically powerful cable news network in the country. And yet Ailes seems to genuinely view himself as a persecuted underdog, a man surrounded by elitist snobs who look down at him. The son of a factory worker who taught him to distrust “college boys,” Ailes has a persona entirely constructed around evidently sincere populism. “He really believes that he is an average American,” observed journalist Tom Junod in a long 2011 Esquire profile. “He really believes that he is looked down upon by those who admire and fear him.” In midtown Manhattan, the hottest lunch spot for the media elite is a restaurant called Michael’s. Ailes of course has his own table there, in the most prime location, reserved for him every day. Yet it is not enough. “You’ll be sitting at his table at Michael’s,” one of his guests told Junod, “and he’ll grouse about not getting any respect and being an outsider while everybody is lining up to kiss his ring. And you’ll be like, Roger, you’re at Michael’s, you’re at the best table—what more do you want?” This is a recurring trope of meritocratic elites. Here’s Bernie Madoff whining to a New York magazine reporter about the injustices of Wall Street he had to overcome: “It was always a business where you had to have an edge, and the little guy never got a break. The institutions controlled everything.… I realized from a very early stage that the market is a whole rigged job. There’s no chance that investors have in this market.” This penchant to view oneself as an outsider is coupled with the other psychological side effect produced by ceaseless competition, which is a kind of compulsive self-obsession. One of the most interesting psychological trends over the last four or five decades is a marked increased in the population’s self-esteem. According to psychologist Jean Twenge, who studies longitudinal trends in Americans’ mental dispositions, in 1950 12 percent of teenagers agreed that “I am an important person.” Three decades later, that percentage was 80 percent. But among those who assert their own self-worth, psychologists found two distinct personality types. One group are those who report high self-esteem and also high levels of happiness, fulfilling friendships, and social relations. The other group report high self-esteem but also display a host of antisocial tendencies, including violence, racism, and lack of empathy. In their book The Spirit Level, authors Richard Wilkinson and Kate Pickett describe this latter kind of self-esteem as “primarily defensive, a kind of internal attempt to talk oneself up”: People with insecure high self-esteem tend to be insensitive to others and to show an excessive preoccupation with themselves, with success, and with their image and appearance in the eyes of others. This unhealthy high self-esteem is often called “threatened egotism,” “insecure high self-esteem,” or narcissism. At its most extreme, the constant perception of competition rather than privilege, the need to insulate one’s psyche from the possibility of failure, produces a tendency toward this kind of threatened egotism. Fractal inequality means that status is never fixed, no success ever final. It means always looking at the next rung up on the social ladder, a posture that makes it very difficult to empathize with those on the rungs below. Twenge’s long-term data show a marked increase in precisely this psychological profile. Ralph Waldo Emerson once observed that “each man carries in his eye the exact indication of his rank in the immense scale of men, and we are always learning to read it.” In twenty-first-century America, this basic human instinct has been cultivated into a guiding ethos. Our culture is overrun with lists and rankings: the most beautiful people, the most influential politicians, the top 500 wealthiest moguls. Anyone who’s ever worked as an editor at a magazine website knows that such stories are what is called in the business “click bait”: readers cannot get enough of them. The obsession with rank reflects deep cultural anxiety over and simultaneous addiction to the ceaseless war for top status, the never-ending treadmill of competition and achievement that we’ve set as our ideal. What was once sublimated is now very public. We have jettisoned any vestigial affection for civic equality in exchange for the false promise of a hierarchy of merit. From Chris Hayes: Twilight of the Elite
Posted on: Wed, 01 Oct 2014 19:13:58 +0000
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