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American Beliefs about Economic Opportunity and Income Inequality

Leslie McCall spoke in the sociology department here the other day to discuss changes in attitudes about income inequality as well as changes in attitudes about attitudes about income inequality. (That is, she talked about what survey respondents say, and she talked about what scholars have said about what survey respondents say.)

On the plus side, the talk was interesting. On the downside, I had to leave right at the start of the discussion so I didn’t have a chance to ask my questions. So I’m placing them below.

I can’t find a copy of McCall’s slides so I’ll link to this recent op-ed she wrote on the topic of “Rising Wealth Inequality: Should We Care?” Her title was “Americans Aren’t Naive,” and she wrote:

Understanding what Americans think about rising income inequality has been hampered by three problems.

First, polls rarely ask specifically about income inequality. They ask instead about government redistributive polices, such as taxes and welfare, which are not always popular. From this information, we erroneously assume that Americans don’t care about inequality. . .. Second, surveys on inequality that do exist are not well known. . . . Third . . . politicians and the media do not consistently engage Americans on the issue. . . .

It is often said that Americans care about opportunity and not inequality, but this is very misleading. Inequality can itself distort incentives and restrict opportunities. This is the lesson that episodes like the financial crisis and Great Recession convey to most Americans.

What follows is not any attempt at an exposition, appreciation, or critique of McCall’s work but rather just some thoughts that arose, based on some notes I scrawled during her lecture:

1. McCall is looking at perceptions of perceptions. This reminds me of our discussions in Red State Blue State about polarization and the perception of polarization. The idea is that, even if American voters are not increasingly polarized in their attitudes, there is a perception of polarization, and this perception can itself have consequences (for example, in the support offered to politicians on either side who refuse to compromise).

2. McCall talked about meritocracy and shared a quote from Daniel Bell (who she described as “conservative,” which surprised me, but I guess it would be accurate to call him the most liberal of the neoconservatives) about how meritocracy could be good or bad, with bad meritocracy associated with meritocrats who abuse their positions of power and degrade those below in the social ladder.

At this point I wanted to jump up and shout James “the Effect” Flynn’s point that meritocracy is a self-contradiction. As Flynn put it:

The case against meritocracy can be put psychologically: (a) The abolition of materialist-elitist values is a prerequisite for the abolition of inequality and privilege; (b) the persistence of materialist-elitist values is a prerequisite for class stratification based on wealth and status; (c) therefore, a class-stratified meritocracy is impossible.

Flynn also points out that the promotion and celebration of the concept of “meritocracy” is also, by the way, a promotion and celebration of wealth and status–these are the goodies that the people with more merit get:

People must care about that hierarchy for it to be socially significant or even for it to exist. . . . The case against meritocracy can also be put sociologically: (a) Allocating rewards irrespective of merit is a prerequisite for meritocracy, otherwise environments cannot be equalized; (b) allocating rewards according to merit is a prerequisite for meritocracy, otherwise people cannot be stratified by wealth and status; (c) therefore, a class-stratified meritocracy is impossible.

In short, when people talk about meritocracy they tend to focus on the “merit” part (Does Kobe Bryant have as much merit as 10,000 schoolteachers? Do doctors have more merit than nurses? Etc.), but the real problem with meritocracy is that it’s an “ocracy.”

This point is not in any way a contradiction or refutation of McCall. I just think that, to the extent that debates over “just deserts” are a key part of her story, it would be useful to connect to Flynn’s reflections on the impossibility of a meritocratic future.

3. I have a few thoughts on the competing concepts of opportunity vs. redistribution, which were central to McCall’s framing.

a. Loss aversion. Opportunity sounds good because it’s about gains. In contrast, I suspect that, when we think about redistribution, losses are more salient. (Redistribution is typically framed as taking from group A and giving to group B. There is a vague image of a bag full of money, and of course you have to take it from A before giving it to B.) So to the extent there is loss aversion (and I think there is), redistribution is always gonna be a tough sell.

b. The path from goal to policy. If you’re going to cut taxes, what services do you plan to cut? If you plan to increase services, who’s going to pay for it? Again, economic opportunity sounds great because you’re not taking it from anybody. This is not just an issue of question wording in a survey; I think it’s fundamental to how people think about inequality and redistribution.

I suspect the cognitive (point “a” above) and political (point “b”) framing are central to people’s struggles in thinking about economic opportunity. The clearest example is affirmative action, where opportunity for one group directly subtracts from opportunity for others.

4. As I remarked during McCall’s talk, I was stunned that more than half the people did not think that family or ethnicity helped people move up in the world. We discussed the case of George W. Bush, who certainly benefited from family connections but can’t really said to have moved up in the world–for him, being elected president was just a way to stand still, intergenerationally-speaking. As well as being potentially an interesting example for McCall’s book-in-progress, the story of G. W. Bush illustrates some of the inherent contradictions in thinking about mobility in a relative sense. Not everyone can move up, at least not in a relative sense.

5. McCall talked about survey results on Americans’ views of rich people and, I think, of corporate executives. This reminds me of survey data from 2007 on Americans’ views of corporations:

Nearly two-thirds of respondents say corporate profits are too high, but, according to a Pew research report, “more than seven in ten agree that ‘the strength of this country today is mostly based on the success of American business’ – an opinion that has changed very little over the past 20 years.” People like business in general (except for those pesky corporate profits) but they love individual businesses, with 95% having a favorable view of Johnson and Johnson (among those willing to give a rating), 94% liking Google, 91% liking Microsoft, . . . I was surprised to find that 70% of the people were willing to rate Citibank, and of those people, 78% had a positive view. I don’t have a view of Citibank one way or another, but it would seem to me to be the kind of company that people wouldn’t like, even in 2007. Were banks ever popular? I guess so.

The Pew report broke things down by party identification (Democrat or Republican) and by “those who describe their household as professional or business class; those who call themselves working class; and those who say their family or household is struggling.”

Republicans tend to like corporations, with little difference between the views of professional-class and working-class Republicans. For Democrats, though, there’s a big gap, with professionals having a generally more negative view, compared to the working class. Follow the link for some numbers and some further discussion for some fascinating patterns that I can’t easily explain.

6. In current debates over the federal budget, liberals favor an economic stimulus (i.e., deficit spending) right now, while conservatives argue that, not only should we decrease the deficit, but that our entire fiscal structure is unsustainable, that we can’t afford the generous pensions and health care that’s been promised to everyone. The crisis in the euro is often taken by fiscal conservatives as a signal that the modern welfare state is a pyramid scheme, and something has to get cut.

When the discussion shifts to the standard of living of the middle class, though, we get a complete reversal. McCall’s op-ed was part of an online symposium on wealth inequality. One thing that struck me about the discussions there was the reversal of the usual liberal/conservative perspectives on fiscal issues.

Liberals who are fine with deficits at the national level argue that, in the words of Michael Norton, “the expansion of consumer credit in the United States has allowed middle class and poor Americans to live beyond their means, masking their lack of wealth by increasing their debt.” From the other direction, conservatives argue that Americans are doing just fine, with Scott Winship reporting that “four in five Americans have exceeded the income their parents had at the same age.”

From the left, we hear that America is rich but Americans are broke. From the right, the story is the opposite. America (along with Europe and Japan) are broke but individual Americans are doing fine.

I see the political logic to these positions. If you start from the (American-style) liberal perspective favoring government intervention in the economy, you’ll want to argue that (a) people are broke and need the government’s help, and (b) we as a society can afford it. If you start from the conservative perspective favoring minimal government intervention, you’ll want to argue that (a) people are doing just fine as they are, and (b) anyway, we can’t afford to help them.

I won’t try to adjudicate these claims: as I’ve written a few dozen times in this space already, I have no expertise in macroeconomics (although I did get an A in the one and only econ class I ever took, which was in 11th grade). I bring them up in order to demonstrate the complicated patterns between economic ideology, political ideology, and views about inequality.

9 Comments

  1. zbicyclist says:

    "I was stunned that more than half the people did not think that family or ethnicity helped people move up in the world."

    Often the people whose family ties or ethnicity most helped them, but in the background — like "old money" you don't really realize how different you are.

  2. numeric says:

    Meritocracy does not imply (to me) abolition of status, distinction, etc. It's more a Pareto or Ricardian type concept, with efficiency or comparative advantage driving getting "the best people in the best jobs." Maybe sociologists/Flynn define it differently.

    The obvious point to make is that providing resources to the next generation is decidedly inefficient, as those with the highest incomes provide the best upbringing, private schools, opportunities (think of W), to their offspring. So to me the big conflict with meritocracy is not that meritocracy implies equality (it obviously does not) but that there is tremendously unequal opportunity,
    brought about by the differential success of one's parents. Eventually, this would lead to feudalism, and it's not hard to see elements of that in America, as our meritocracy has lead to a distribution of income so unequal that it matches or exceeds the Gilded Age and the unifying principle of one of the major political parties is the alteration of tax and regulatory policies to further the concentration of resources in the hands of an ever-smaller elite.

  3. Andrew Gelman says:

    Numeric:

    That's exactly Flynn's (and my) point. Meritocracy is inherently not an abolition of status, distinction, etc. Hence meritocracy leads to preferential treatment of meritocrats' children, etc. You're echoing what Flynn wrote. Perhaps I just gave too short an excerpt from Flynn to make that clear.

  4. Henry Harpending says:

    I have stared at James Flynn's two arguments, the
    psychological and the sociological, and I cannot make even a shred of sense of either one. I can parse the sentences but fail to see how they related to each other.

    For a start there is this:" (a) Allocating rewards irrespective of merit is a prerequisite for meritocracy, otherwise environments cannot be equalized." Fair enough, but Flynn seems to be assuming that family and social environments are important ingredients in the dynamics. Perhaps so, in the past, but I would think that one's GRE is much more important and that GRE reflects ones DNA rather than one's familly and social environment.

    You say, in your response to Numeric, "Hence meritocracy leads to preferential treatment of meritocrats' children, etc. " Yes, of course, but are you assuming here that this treatment of meritocrats' children is what _causes_ parent-offspring correlations in merit?

    Thanks, Henry Harpending

  5. Phil says:

    Henry, parents with more education and more money are able to provide their kids with better education (better schools; tutoring if needed; help with their homework; tuition at a good college; the economic freedom to choose something like an internship rather than maximizing short-term economic gain). Also better business contacts. Other advantages, too. These are far from the _only_ things that affect a child's chance of success, but they are certainly significant!

  6. numeric says:

    Then who defines meritocracy as an abolition of status?
    McCall? You write:

    2. McCall talked about meritocracy and shared a quote from Daniel Bell (who she described as "conservative," which surprised me, but I guess it would be accurate to call him the most liberal of the neoconservatives) about how meritocracy could be good or bad, with bad meritocracy associated with meritocrats who abuse their positions of power and degrade those below in the social ladder.

    At this point I wanted to jump up and shout James "the Effect" Flynn's point that meritocracy is a self-contradiction.

    It doesn't sound like she's arguing that meritocracy
    leads to an abolition of status (maybe she does and you
    don't quote it). I suppose the Marxist ideal ("from each according to his ability, to each according to his needs") is sort of a claim for meritocracy ("ability"),
    and the Marxists claimed to eliminate status (I won't go into how that didn't work out, though of course party members had the most status), but it would seem even a Marxist would recognize that a meritocracy in and of itself did not eliminate status.

    So my question is–who defines meritocracy as an abolition of status? It seems yours and Flynns (and mine, which is a restatement of some sort) indicates that meritocracy is evolutionarily unstable (we have evolutionarily stable strategies so we must have evolutionarily stable societies). Unless we adopt a Rawlsian technique of handing out children at random without regard to their biological parents.

  7. Andrew Gelman says:

    Numeric:

    I don't know who if anyone defines meritocracy as "abolition of status." That is your phrase, not McCall's, not Bell's, Flynn's, and not mine. I think we're all in agreement here that meritocracy is not an abolition of status. I don't know where you got this phrase from but it wasn't here!

  8. Paul says:

    And dictatorships are impossible, because no single man could ever control every aspect of a society. Is true republicanism or democracy possible in a state requiring bureaucrats? A free market both forbids government intervention, and requires it in contract enforcement, or at the least the avoidance of an armed insurrection eliminating the free market.

    State run child rearing would solve the meritocratic issue. It can be alleviated by leveling educational opportunities. And the issue can even be defined away by focusing on adult merit. Some may have had better education, some also lucked into better genes. But a brilliant lower class individual is likely to outperform an untalented high class individual, regardless of the latter's private tutoring. Over the long run, wouldn't we expect the family fortunes to average out? A few generations of underperformers losing the accumulated advantages. A single brilliant ancestor rising a family into the advantaged circle.

    So while there is a valid point that an inheritance-based society is in conflict with a meritocracy, I personally don't see it as any more self-contradictory then anything else as complicated as a political philosophy.

  9. Saari says:

    Thank you for this discussion and for tying perception of wealth inequality to the idea of meritocracy. This is an important connection that seemed absent from the NYT discussion, where I don't think they used the word at all. If a true meritocracy doesn't exist, what is interesting is the effect of people believing in meritocracy on political outcomes, and the possible use of meritocratic ideology in legitimating inequalities, both social and economic.

    John Jost's systems justification theory seems particularly to the point here. In a paper with Jaime Napier (Why are conservatives happier than liberals?) it is suggested that differences in meritocratic ideology are behind varying rates of happiness: meritocratic beliefs provide a comforting narrative that rationalizes inequality. Similarly, the psychologist Brenda Major has done experiments that suggest people `primed' for meritocratic beliefs are more likely to blame themselves when encountering discrimination. Meritocratic ideology, then, might lead to the poor acquiescing to current structures, to the rich feeling more entitled to current privileges, and perhaps ultimately to justifying limiting assistance to the unfortunate.

    While championed as an ideal today, `meritocracy' is only a young idea, the name of a future British dystopia thought up by Michael Young in the 1950s . While a progressive, and one of the founders of the Open University, his commentary in the Guardian (http://www.guardian.co.uk/politics/2001/jun/29/comment) suggests that he feared that inequality, where justified by meritocratic ideology, would be all the more cruel: the downtrodden would only be getting what they deserve. This also seems to be the effect of meritocratic ideology suggested by Jost and Major's research, and perhaps another reason why (some) Americans are untroubled by growing wealth inequality.

    Thanks again for highlighting this connection.