of sandwiches and cultural exclusion

David Brooks, liberals’ favorite conservative, came out with an(other) entirely Brooksian column today, this one riffing on Richard Reeves’s important, if flawed, book, Dream Hoarders. Reeves essentially argues that there are lots of structural barriers to the bottom 80% of the US income ladder moving into the top 20%, and that we should therefore pay less attention to the 99%/1% division than to the 80%/20% division. (A better version of a similar argument is in Chris Hayes’ fantastic book, The Twilight of the Elites.)

Brooks, though, knows better than all those zoning laws, rigged college admissions, and so on. Really:

I’ve come to think the structural barriers he emphasizes are less important than the informal social barriers that segregate the lower 80 percent.

Okay, well, not to get too academic about it, but what’s your evidence for rejecting the main thesis of the book in favor of, well, every Brooks column of the past umpteen years?

Recently I took a friend with only a high school degree to lunch. Insensitively, I led her into a gourmet sandwich shop. Suddenly I saw her face freeze up as she was confronted with sandwiches named “Padrino” and “Pomodoro” and ingredients like soppressata, capicollo and a striata baguette. I quickly asked her if she wanted to go somewhere else and she anxiously nodded yes and we ate Mexican.

American upper-middle-class culture (where the opportunities are) is now laced with cultural signifiers that are completely illegible unless you happen to have grown up in this class. They play on the normal human fear of humiliation and exclusion. Their chief message is, “You are not welcome here.”

Most of my Twitter sphere has pilloried this (correctly, I think) as mistaking the cause for the expression (or, at most, mechanism) of class-based exclusion. But then there’s a backlash (e.g., here), claiming insensitivity; that cultural capital is “real,” and that those making fun of Brooks are just showing that he’s right.

But here’s the thing. Brooks’ claim isn’t just that cultural capital exists, or that it is one of the ways inequality is expressed. He specifically claims that cultural capital causes the persistent inequality between the 20% and the 80%. That’s utterly implausible, if for no other reason than that learning the names of sandwiches is free (unlike expensive housing and college prep tutors). I believe that people with working-class backgrounds feel uncomfortable in the face of massified sophistication. That doesn’t mean the discomfort causes the inequality.

Other points on the column:

  • It’s not plausible that the sandwich names are “completely illegible unless you happen to have grown up in this class.” Most people, regardless of class background, are able to learn new terms for things (tweet, iPhone, MAGA, e.g.).
  • Because of that, cultural capital is particularly susceptible to “inflation” — today’s highbrow signifier is tomorrow’s Beanie Baby.
  • To wit, those fancy Italian names are kind of passe at this point–at least in my area, it’s stylized working-class food that signifies upper-class hip. Places like Merritt’s Grill and the Saxapahaw General Store.
  • Food is a signifier, yes. It’s also an art form. Like other art forms, its function as signifier can’t be separated from its function as art. That’s the genius of Bourdieu (can’t believe I used those two words in the same sentence). But the way food-as-art is discussed leaves it more open to crudely anti-intellectual/anti-intraceptive positions than other forms of art would be. Could we imagine Brooks claiming that the chief message of Monet is “You are not welcome here?” Of Beethoven, or Hamilton? I’m not saying that whatever second-rate overpriced sandwich shop he went to is the Emperor’s Concerto, but there’s no particular virtue in bad tex-mex any more than in Muzak due to their similar accessibility.

Bottom line: culture matters, and cultural exclusion is real. But structure matters more in reinforcing inequality. If you want a much more serious take on how culture and comparison play in inequality, I’d recommend my colleague Keith Payne’s new book, The Broken Ladder.

prestige trumps quality in faculty hiring? not so fast

This article (Clauset, Arbesman, and Larremore. “Systematic inequality and hierarchy in faculty hiring networks”) has been making the rounds lately. The article uses a network method to extract prestige rankings from the set of graduate degrees and faculty hires. It shows “that faculty hiring follows a common and steeply hierarchical structure that reflects profound social inequality.”

Blog posts, tweets, and stories about the article (e.g., this one from the Monkey Cage) have mostly picked up on the idea that the fact that prestigious departments generally hire Ph.D.s from other prestigious departments must mean that “academia is not a meritocracy.” While I would certainly not claim that academia is a meritocracy, I don’t think the Clauset et al. paper demonstrates that.

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all persons are fictional

In the wake of the Hobby Lobby decisions, there have been renewed discussions of corporate personhood. The argument is relatively simple: the 19th century Supreme Court made a mistake when it created the legal fiction that corporations are persons. I don’t want to get into that argument here. Instead, I want to make a slightly different argument: all persons are fictions.

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no austrians near fiscal cliffs

The commonplace saying “there are no atheists in foxholes” — while probably technically false — seems apt to describe the so-called “fiscal cliff” situation the United States government finds itself in. Deficit hawks and Austrian economics purists ought to be happy, as the automatic cuts produce the first significant deficit reduction in 12 years and reduce government involvement in the economy more substantially than essentially anything since Bretton Woods.

But, with important exceptions, most commentators agree that the fiscal cliff is likely to lead to major economic problems because of the withdrawal of substantial government money from key economic functions and of tax rates returned to those that existed during the last economic boom. Let’s recognize this for what it is: an admission that government’s involvement in the economy actually does create jobs, Mitt Romney notwithstanding.

snarky qotd about voting and economics

The prize goes to Peter T:

[Steven] Levitt has millions of brain cells. The activity of any one of them cannot possibly matter. So he doesn’t bother thinking.

It’s all part of a(nother) post by Andrew Gelman on why it might be rational to vote if you care about the outcome because there’s a nonzero chance of your vote being decisive, estimated at roughly 1 in 10 million depending on what state you live in. Since the chance of being killed by a car on your way to voting is probably much higher than that, I think the rationality calculus is still way off, since there are very few people who would prefer dying in a car accident to failing to cast the decisive vote. But hey, I’ve objected to Gelman’s approach to this for a while.

FWIW, I voted Wednesday. Early. In a swing state.

nerd alert: krugman and the primacy of a concept

Paul Krugman writes:

It wasn’t until the Arabs invented Arabic numerals that the liquidity trap became a possibility.

Very erudite, very intellectual, very historically astute. But is it true? The liquidity trap describes a point at which a central bank’s infusion of cash into an economy fails to stimulate the economy because returns are already so low that people prefer to hoard cash. (Feel free to elaborate on, or correct, my amateurish description.) I’m very happy with the idea that the concept of zero has to predate economic behavior that worries about (sub)zero returns, but I would have thought economists would think it’s the actual existence of zero, not the concept of it, that drives the liquidity trap.

is pink slime a moral panic?

Today’s Wall Street Journal carries a story about defenders of so-called “pink slime,” the mixture of beef scraps disinfected with ammonia that has been the subject of major derision since Jamie Oliver “exposed” it on his show. Important elements of the story:

  • “lean finely-textured beef” (the technical identifier) has been used for a long time
  • the stuff is much less fatty than regular ground beef
  • it’s actually beef, not a filler, starch, etc., as some other meat extenders are.

So, is pink slime getting a bad rap just because of the name it’s been given? Is anybody really surprised that industrial food producers use every scrap of meat they can? Is anybody upset that higher-risk bits of meat are disinfected before entering the food supply? What unintended consequences will result from the moral panic surrounding the stuff?

I take for granted here that we are talking about an industrial food supply, and we can have a separate discussion about the virtues of organic, free range, etc., meat. But should consumers of industrial meat be surprised or upset at the presence and use of this product?

wsj: 3x the income share is remarkable similarity

Today’s Wall Street Journal carries an opinion piece by Allan Meltzer based on a 2006 study by Roine and Waldenstrom. The piece reprints a graph showing the income share of the top 1% in several countries between 1900 and 2000. (The graph is quite interesting in itself.) Meltzer’s interpretation: “…the share of income for the top 1% in these seven countries generally follows the same trend line.” The pullout quote: “The remarkable similarity in income distribution across countries over the past century means domestic policy has less effect than many believe on who gets what.” The remainder of the piece is pretty much the same stuff we always see in the WSJ: additional taxes on the rich will reduce investment and therefore jobs and income for the other 99%, therefore it’s really in the best interests of the whole country for the obscenely rich to be left alone to become even richer.

I’m not interested in refuting the obviously self-serving argument about the “job creators,” but the interpretation of the graph is important. First, while there is an overall trend line, dispersion around it is substantial. Even during the time period of the least dispersion (the postwar era, about 1945-1975), the difference between the share of income held by the top 1% in the top country (the Netherlands) and the bottom (Sweden) is about 5 percentage points, which is hardly negligible when it’s percentage of national income! Second, since about 1980 the dispersion between countries is quite marked, with the US share climbing from about 8% to about 17% (reading from the graph) between 1980 and 2000 and large increases in the UK and Canada but much less increases in France, Sweden, Australia, and the Netherlands. Thus by 2000 the difference between the share claimed by the top 1% in Sweden (5%) and the US (17%) is a factor of greater than three! The conclusion, then, ought to be just the opposite of Meltzer’s: even in the era of globalization and the decline of the state, nation-to-nation differences persist and even increase. Thus this is evidence that national policy can make a difference in income inequality.

bageant, rainbow pie

I very much appreciated Joe Bageant‘s previous book, Deer Hunting With Jesus, so eagerly looked forward to reading Rainbow Pie: A Redneck Memoir. Bageant, who died last year, was a political and social commentator whose overall goal in both books was to explain the political and social effects of white working class despair. Deer Hunting was set in Bageant’s hometown of Winchester, Virginia, and followed people there as they sought to cling to dignity in the face of economic desparation.

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fallacies of a market approach to public higher ed

In the wake of big debates about rising tuition, North Carolina’s trusty right-wing blog carries a snide analysis of the rising cost of tuition. The gist:

the market for a college education is highly distorted by government subsidies to the schools, direct student aid, and cheap government loans. These factors artificially inflate demand, and create a sizable wedge between what the consumers (students) pay for the product and the income taken in by the producers of that product (the universities). The inevitable result is skyrocketing prices completely out of line with true consumer demand.

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stocks, flows, and capital gains

Disclaimer: I am not an economist. Really, really not. Any comments as to why I am wrong here would be welcome!

There is a common meme in the discussion of capital-gains taxes that the income from capital gains has “already been taxed” when it was business income, taxing it when it becomes increased value in investments is unfair or at least double taxation. You can find this claim all over the place; one typical example is here:

…wealthy tax filers make most of their income from investments. Such income is taxed once at the corporate rate of 35% and again when it is passed through to the individual as a capital gain or dividend at 15%, for a highest marginal tax rate of about 44.75%.

Various commentators have noted that this distinction means little to “average Americans,” and that it shows just how disconnected the very wealthy are from the rest of us. I largely agree.

However, I think there’s a good analytical case to be made (separate from the political case) that the double-taxation thesis misunderstands the nature of capital and taxes. That’s because it conceptualizes the funds being taxed as a stock[1] when they are really a flow. Income taxes, sales taxes, etc. (but not property taxes) are imposed on flows: essentially, on the transfer of money from one party to another.  When a company pays a worker a salary for her work, the money it uses to pay her has also already been taxed, either as prior profit for the company, or as income from sales before, etc.  So if we conceptualize that money as a stock, liable to be taxed once and only once, the same argument applies to regular income taxes as to capital gains taxes.

On the other hand, if we recognize that income taxes are imposed on the transfer of money from one party to another, capital gains is no more double taxation than is any other form of income tax. Investors realize profits from capital gains as income from a distant source; indeed that’s why the IRS defines it as “passive gains!”  It’s perfectly reasonable to understand the company as paying taxes on its profits, and the stockholders as paying taxes on their income, because most elements of the economy, emphatically including this one, are best understood as flows, not stocks.

The same misunderstanding is, I believe, involved in the meme that claims that focused government spending is like “moving money around in the ocean” (I can’t find a reference online but I’ve heard it orally). The simile works because anybody can understand that moving money in an ocean doesn’t change the stock of water. But economic growth is actually about increasing the flow of money, not the stock;  so moving “water” around may[2] actually contribute to economic growth because moving money around increases the likelihood that it will flow further.

[1] As you probably figured out, I mean stock as opposed to flow, not in the sense of a piece of paper conferring share ownership in a corporation.

[2] Note that I wrote “may”, not “will.”

stuff i don’t get about the european debt crisis

All right – in general I don’t think I’m particularly dense, even in matters economic (though perhaps more so in that than other areas). But I’m confused about several pieces of the European debt crisis and comparisons that get drawn to American issues.

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hearing voices: can a corporation speak?

The Wall Street Journal carried an op-ed last week by Simpson and Sherman about Stephen Colbert’s difficulties in setting up a PAC post-Citizens United. I wrote a letter to the Journal but (no big surprise) they don’t seem eager to print it, so I am posting it here. It has sociological as well as political content, since the essential question is whether an administrative collectivity can be said to “speak”.

To the Editors-

The op-ed in Thursday’s paper appropriately demonstrated that there remain hurdles to forming PACs, even in the post-Citizens United environment. But the authors have missed a more fundamental point: corporations cannot “speak.” People speak. Corporations can pay–or inspire–people to speak on their behalf, and they can even organize groups of people to speak (or, for that matter, to write op-eds). In the case of media companies, they can provide spaces in which real people
can speak.

The “real people who want to speak out during elections” do not in fact run into the barriers Stephen Colbert encountered, because real people have a battery of opportunities to speak: conversations, town meetings, telephone calls, petitions, campaign work, street demonstrations, individual contributions, even letters to the editor! All of these and more are available to “real people,” including Mr. Colbert and the shareholders, CEOs, employees, customers, and critics of corporations
across the nation.

Andrew J. Perrin

Chapel Hill, NC

civitas’s naivete on democracy

On North Carolina’s Civitas Institute’s blog, Cameron Harwick provides a clear and concise description of the libertarian approach to democracy: democracy is bad because it is collective:

we have a mechanism for giving people what they want – and that isn’t the political process: it’s the market…. The more things we subject to the political process, the more people lose. And that is unambiguously bad.

In other words: deciding by fiat that there is no social or common good leads very directly to the subsidiary claim that democracy itself is bad. But in many of the examples offered in the post, individual decisions have nonreducible social effects. Perhaps the most immediately relevant of these is the health care mandate, since uninsured individuals represent social costs both because they tend to show up for care when sick even if uninsured, and because of the moral hazard problem. But busing for desegregation, taxing for public goods, and so on are all examples where democratic decision making may well result in a better decision than aggregate individual decision making, even from the perspective of individuals. Harwick’s post lays out this position nicely, and thereby demonstrates the silliness of the libertarian approach. It’s a very similar argument to that in Pincione and Teson’s absurd book, Rational Choice and Democratic Deliberation, which pursues very much the same argument: that deliberation is bad because democracy is bad.

Note that this question goes directly to the other conversation going on here, since the tenability of the libertarian position rests on the question of whether collectivities are ever more than the sum of their individual parts. Generally, sociological theory and research suggest that, indeed, they are often more than the sum of their parts. It is therefore reasonable to expect sociologists to reject this libertarian position at greater rates than nonsociologists.

is civic literacy fiscal literacy?

From The Monkey Cage, I took the American Civic Literacy quiz. It’s tough but interesting – I got 100% right, which puts me slightly ahead of John Sides and Mike Munger. Which is kind of ironic, because Munger is a libertarian, indeed formerly a libertarian candidate for governor of NC (I don’t know Sides), and the quiz shows a marked libertarian bias in questions 25 on. Frankly there are empirical and theoretical disputes about some of the claims, so one has to sort of engage in temporary suspension of disbelief in order to figure out what answers they’re looking for! It’s not that hard to figure out, though, since the very fact that 8 of 33 questions are fiscal in character.