Economic Mobility: Latest Ruse of the Rich

Posted by Bob Lord

Great piece by Sean McElwee in Salon yesterday, Listen up, talking heads: Upward mobiity isn't the answer. McElwee identifies and exposes the latest ruse of the rich, implemented through their proxies in the punditocracy and Congress: It's not inequality, but upward mobility, that we need to address. In other words, if we can just improve the odds of going from rags to riches, it would be just fine if most Americans were in rags. McElwee:

A new “bipartisan consensus” is brewing: 2014 will be the year in which Very Serious People argue that America’s primary economic goal should be increasing social mobility, not decreasing inequality. “Shame on Obama and De Blasio for talking about class, and trying to divide us,” they’ll smarm. “Let’s focus on something everyone can agree on: upward mobility.”

It’s already happening. At the Brookings Institution, Richard Reeves argues that while inequality is important, the defining issue of our era is “the shocking, illiberal, immoral transmission of poverty and affluence from one generation to the next.” Social mobility is the new deficit reduction, and luminaries from the left (Kirsten Gillibrand) and right (Paul Ryan) can both agree it’s a problem. Even David Brooks is concerned. Marco Rubio has already sketched out the battle lines: “It is this lack of mobility, not just income inequality, that we should be focused on.” At the core, the question about whether our society should focus on inequality or mobility gets to a significant schism built around one central question: Is inequality fundamentally immoral?

McElwee's piece is thought provoking, to say the least. He demolishes the underlying premise of those promoting the "it's not inequality, but upward mobility" position, that markets are inherently just and a society where property is distributed according to merit is optimal.

To accept that upward mobility alone can cure society ill’s, to accept meritocracy as the ultimate goal, is to accept markets as the means of determining merit. When we talk about “upward mobility” and “meritocracy,” we implicitly assume that those who succeed have “merit,” while other do not. However, it was Friedrich Hayek, a free-market champion, who noted that capitalism should not be considered a “meritocracy,” because markets don’t distribute based on merit, but rather demand. Jamie Dimon and Lloyd Blankfein, markets have decided, deserve more than Hannah Gay, Katherine Luzuriaga and Deborah Persaud — the scientists who cured a newborn of HIV this year. Thus, when we accept upward mobility as a goal we must also be willing to accept that markets determine who goes up and who falls down, rightly or not. And when we accept “growth” as a goal, we assume that GDP is a useful metric to determine social progress (which it is not).

This illusion of  “meritocracy” poisons the way we talk about inequality, and how to fix it. In discussing “redistribution,” my colleague Matt Bruenig points to Murphy and Nagel’s work on “everyday libertarianism,” or what Marx might call “false consciousness”: People who live in capitalist societies make assumptions like the idea that a market distribution is inherently legitimate, and therefore that a government involved in economic matters is “re-distributing” resources. In the same way, we talk about “upward mobility” in terms of “merit,” assuming that markets determine rewards justly, according to some abstract notion of what “merit” means. The first right in a capitalist society appears to be “thou art entitled to the market’s distribution.”

The mobility vs. equality debate is directly tied to how we define the American dream. And conservatives have had tremendous success on that front. In recent years, the American dream increasingly is described as the possibility in America of going from rags to riches. But, historically, the American dream has been the ability of any American who works hard to have a decent life. Many on the left, particularly establishment Democrats, have quietly acquiesced to the redefinition. If we're going to keep the focus on inequality, we need to reboot the definition of the American dream.