Photo Credit: Jennifer McMillan
So, then, to ever man his chance-
to every man, regardless of his birth,
his shining, golden opportunity-
to every man the right to live,
to work, to be himself,
and to become
whatever thing his manhood an his vision
can combine to make him-
this, seeker,
is the promise of America.
Thomas Wolfe
Yesterday I delved into questions of how vibrant American meritocracy remains, in this essay I want to look at another facet of the American Dream, something that de Tocqueville noted when he came to America: “equality of outcomes.” While such equality is now considered anathema, it used to be an integral part of the American Dream, especially during the famous “Great Compression” of the 40s and 50s. Michael Sandel, in his delightful and insightful What Money Can’t Buy argues that today the poor and the rich interact less frequently. He provides an example a Yankees game; when he was a teenager he remembered rubbing shoulders with even the richest Wall Street banker, now they loom overhead in skyboxes. This, he argues has permeated society, the “skyboxification of American life.” He riffs off of Michael Walzer’s seminal work Spheres of Justice (although this is a discussion for another essay).
Sandel’s insight is correct – the “equality of outcomes” has been replaced by the “skyboxification.” Increasingly, the richest Americans have earned more and more of national income creating a visible chasm.
So, the two arms of the American Dream: “equality of outcomes” and meritocracy, are in decline. Further, they’ve been in decline during the same general period (since around the 1970s and 1980s). Could it be that these correlated events could have a causal link? I’ll begin by showing the evidence for correlation. Below is chart that was presented by Alan Krueger during the 2012 President’s Report to Congress Speech. He constructed the chart with data from Miles Corak, which I obtained from Mr. Corak during e-mail correspondence. The verticle axis shows IGE in 2006 (the measure of mobility discussed in the previous essay) and the horizontal axis shows Gini Coefficients (measure of inequality in society with 1 meaning absolute inequality and 0 absolute equality).
We see that societies that were more unequal in 1985 were less likely to have seen social mobility by 2006. These facts (declining mobility, increasing inequality and there correlation) have been almost universally accepted by the left and right, but each has a drastically different interpretation of the evidence. The left, lead by thinkers like Paul Krugman has presented an institutional critique: as inequality rises, institutions, like education, healthcare, and politics perpetuate inequality and damper mobility. The right has only recently formulated its response. Charles Murray, in his book Coming Apart argues that it is culture, and not institutions which entrenches poverty and inequality, and institutions, like welfare, only further incentivize poverty.
To see the difference, consider a 2004 study by Bhashkar Mazumder, which finds
It may be especially surprising to note that even measures of physical attributes such as height and weight which presumably have a strong genetic component, are not as highly associated between brothers as is the permanent component of wages.
His finding was surprising, siblings are more likely to share an income bracket than a similar height and weight. Both instituionalists and culturalists can explain these findings. Institutionalists point that those in a similar income bracket are likely to have similar access to education and healthcare. Culturalists argue that more likely the similarity comes from internalizing familial values.
The coming essays in this series will first present the institutional explanation, based on “channels” of mobility. “Channels” are institutions, like healthcare, education, and politics which in unequal countries prevent mobility, but in equal countries encourage it. Then, it will examine the cultural critique offered by Charles Murray.
This is the second essay in a series. Part one.