The New Aristocracy feat. Matthew Stewart

Summary

Matthew Stewart is a philosophy PhD and author. He’s also a Princeton guy and former management consultant so he knows rich people. 

His new book, The 9.9%, is about them. Not the super-rich, but the doctors, lawyers and managers that go to good colleges and live in nice neighbourhoods. The “nearly rich and not-famous,” as he puts it. 

We talk about how these people raise their kids, get their money and block the poorer element from their neighbourhoods. Matthew reckons the 9.9% are a new kind of aristocracy that’s entrenching inequality and making everyone hate parenting. In the end, it’s not really the white collar player he hates; it’s the game of inequality. Though he doesn’t sound very fond of the players either. 

Transcript

Note: this is transcribed using an online transcription service so it’s probably going to have a lot of errors. We do don’t have time to go through these all carefully but still thought that it would be more helpful than having no transcript at all.

Clif Mark: Today: private schools, Princeton plutocrats, and how economic inequality broke the American brain. I’m Clif Mark and this is Good in Theory.

[00:00:00] Clif Mark: Today on good. In theory, we have Matthew Stewart. He's the author of six books, including his most recent called the 9.9%. The new aristocracy. That's entrenching inequality and warping our culture. This is a book about class in inequality in America. And. Matthew. I want to thank you for coming on and thank you for writing this book because not only is it full of insight and great arguments in analysis, but.

[00:00:30] Unlike a lot of books about inequality. It's actually a lot of fun to read. It's got all this. Rich anthropological detail about the upper-middle-class in America. You're having a lot of fun. It reads almost like satire. So. I would recommend. And this book to anyone interested in the topic. Of inequality and I've already recommended to other people.

[00:00:52] Thanks for writing it. Too. Begin our discussion. I'd like you to explain why it is your book is about the 9.9%. why are we talking about them and not the 10% or the 1% or any other group?

[00:01:09] Matthew Stewart: Right. So, uh,

[00:01:11] thanks. Thanks for the comments about the routing so that the 9.9% is just a kind of mathematical heuristic, but let me, let me lay it out. So it doesn't sound mysterious. Um, um, the story about rising inequality is pretty Well, known now for the last half century it's been increasing dramatically, especially in the United States.

[00:01:29] And I apologize, the book is focused mainly on the United States, but some of it does have global implications. Um, uh, and it's usually told as a story of us versus them with us being the 99% and then being the 1%. But when you look at the numbers that that's not actually what they tell us. So the wealth distribution numbers show that all of the relative increase in wealth concentration has gone to the top 0.1%.

[00:01:54] So it's really just that sliver at the top. And even within that, it's the top 0.01% that have gotten the lion's share. Um, and then conversely, all of the relative decline and. Gone to the bottom 90%. So everybody in the, or every decile or centile below the 90th percentile has a lost relative wealth share, which is quite an astonishing fact.

[00:02:17] But then of course, that leaves this group in between the 9.9%. Um, uh, and that's the, the focus of the book. Um,

[00:02:26] Clif Mark: actually just let me interrupt you for a second there and, um, summarize the class structure that you've just laid out. So. You're dividing up America into three groups, right at the bottom 90% of people. They're pretty much stagnant. They haven't enjoyed any of the growth in the economy over the past 40 years. They're stuck. And at the tippy tippy top, there's the 0.1%.

[00:02:51] Billionaires are in here. People just getting fabulously, rich, all the, you know, people just killing it over the same time period. In between the super rich and the vast majority. There's still the 9.9%. They're not nearly as rich as the billionaires, but they're still doing a lot better. Than 90% of people.

[00:03:15] These are your upper middle-class people, your doctors, your lawyers, management consultants, people like that. Right? So. You took this group of people as the subject of your book. Why are they so important? Why are they more important to the story than say the 0.1% super rich.

[00:03:34] Track 2: Yeah, so, so the 9.9%, first of all, is actually in wealth terms bigger than those other two groups.

[00:03:41] so they're important for that reason. Um, but there, there, there's a general abstract point that I think is very important to get across and that's that, um, inequality is about a lot more than dollars and cents. So, um, we tend to think of it just as the fact that, you know, there are a few billionaires running around, lost people with not, enough money, but in fact it, it, it gets into us in a significant way.

[00:04:07] So by framing the issue this way in, in a complicated three-part scheme where we, some of us may be members or aspiring new members, I want to reframe inequality as a, as not an us versus them issue, but as a. We're all implicated to some degree. Um, and I suppose the second more concrete reason is that this 9.9% is what really drives our culture.

[00:04:30] I mean the 0.1% they do drive the culture, but, um, they're kind of idiosyncratic, they're bizarre. They're they're alien creatures. For day-to-day, . You know, what people aspire to in the United States is to become a member of the 9.9%. That's what defines our life goals. It, it, it seeps into our culture.

[00:04:48] It, it sets our values. It tells us what's good, what's bad. And who's doing well and who's not. Um, and that's it's only, um, it's not directly tied to, to the money and the S in absolute quantity terms. It's just, that's what constitutes success. And the broader point in, in, in the historical analysis is that as that 9.9% has gotten significantly wealthier with respect to the 90.

[00:05:14] Because that's what's happened. So the ratio of the wealth, the name put names into the 90% has, has grown dramatically. The hill is a lot harder to climb as that has happened. The value systems that dominate all of society, not just the 9.9%, but everybody have, have changed. It changed dramatically.

[00:05:32] Clif Mark: Right. Great. I mean, one of the ways that you put it in the book that I found. Really nice was you say that the 9.9% being a member of this class or group? It's not so much about a bank balance, but it is a way of life. So. Maybe let's talk about the life of your. Archetypical 9.9 percenter.

[00:05:56] Where do they start? Where do they go to school? Who are their parents? And we can talk about how those values at each stage of life kind of infiltrate the whole of the culture.

[00:06:05] Matthew Stewart: So there there's, um, there, there they're the people who are basically able to do it, who are, you know, the paid-up members, the 9.9% and let's start with them and then we'll see how that, how the values filter down below. Um, and you know, I opened the book in a way with the, the easiest part of the, um, social analysis that at least for anybody who's been.

[00:06:26] Yeah, it was living in my neighborhood for example, um, which is the kind of craziness about parenting. right.

[00:06:35] Um, you know, um, and I had some fun with this. I admitted, um, you know, the, the ads for the Navy. Um, they're, you know, they, they are over the

[00:06:45] Clif Mark: let's tell us a little bit about

[00:06:47] Matthew Stewart: but they're real. They're real. I mean, that's the thing.

[00:06:49] I didn't make this stuff up and I have to say I put it in there because I kind of seen that, sort of behavior. And yeah. So just so that, um, your listeners get what I'm talking about. Uh, I mean, these are ads where, you know, you have a hyper successful business. People who are very, very busy, too busy to really raise their kids.

[00:07:10] Track 2: And yet they, um, are absolutely fanatically committed to raising the best possible child who is, you know, from the beginning, they're aiming straight for the Ivy league. Um, and they are gonna invest everything to make sure that, this the little one had, is fully developed spiritually, emotionally, and intellectually, uh, and ends up with a good resume.

[00:07:32] How do they do that They put out these ads for these, these nannies and these ads are insane. They basically asked for a nanny who has, um, university level education and child development who is capable of, um, running spreadsheets. So she can do clear analysis of household budgeting and household expenses.

[00:07:51] Uh, you know, one of them wanted the nanny also to be able to sort of, uh, uh, you know, essentially be a decathlete because she wanted to have the kids go river swimming and, um, engage in other kinds of exotic sports. Um, you know, and, and this is not just, you know, one kind of crazy parent. This is, uh, it's happening in all the major metropolitan centers.

[00:08:13]

[00:08:13] But look here. So all that's kind of fun and games with, um, you know, the, the, the foibles of the successful members of the 9.9% and really arguably at the, at that sort of top end of that spectrum. Um, but a lot of the same ideas about parenting a filter down, it just, they filter down to people who can't afford it. So, so, so then you, and this is backed up with a fair amount of, um, sociological evidence surveys. And so on that parents. At, even at lower levels of the welfare distribution are still investing huge amounts of time. And they'd love to have an Annie. They can't afford the nanny, uh, but they essentially get stretched thin.

[00:08:53] And so that also shows up in incredible parental unhappiness. So it turns out that the United States, as some of the unhappiest parents in the world, which is itself a paradox, when you consider just how much happiness, the whole parenting thing is supposed to ooze in our culture. Right.

[00:09:07] I mean, you know, with all the talk about the wonderful games and the thrilling adventures and the great development for your kid and all that, it turns out that

[00:09:15] Clif Mark: When you got to do at 80 hours a week, it becomes miserable. Like anything

[00:09:18] Matthew Stewart: yeah.

[00:09:18] Unless you can afford the nanny. Right.

[00:09:19] So, um, so that's, uh, I think, uh, an illustration of the way in which the, the values that are kind of conceived and set at the, at the top end then filter down, but they filtered down in a very problematic way. So, you know, it's, uh, I think I take it as a sign of a system that's it's, um, uh, out of skew and there's, there's also good evidence comparing countries that backs up this kind of clan that economic inequality dramatically changes parenting styles across the culture, not just within specific classes, but across the culture.

[00:09:55] Uh, and, um,

[00:09:56] Clif Mark: is interesting though that economic inequality just makes parenting more miserable for everyone.

[00:10:01] Matthew Stewart: yeah. And argue, it's not so great for the kids. Right. I mean, you know, we've, you know, I don't think it's a terrible thing to have

[00:10:07] Clif Mark: let's So we know who the parents are. That's the, the, the model 9.9 percenter is born into, uh, you know, this family where they're raised by a very well-educated, but undocumented, uh, nanny. And then, and then they're, they're off to school, I guess, private, competitive preschool, private schools, and so on.

[00:10:28] What is, what is their path as they continue on.

[00:10:31] Matthew Stewart: So what's happened is. The private schools have increasingly become a, um, you know, a, a vector for those who have wealth to, you know, pass it on to their kids in the form of cultural capital and

[00:10:44] it's not just perhaps schools of course, because the, the American system, um, it's amazing. We have a system that, that takes this public good of education and it funds it locally. And the local areas are increasingly segregated by, by wealth. Uh, so we have pseudo public schools. We have, you know, a kind of private school network masquerading as a public school network.

[00:11:08] You can go to these great public schools. You just have to buy the $2 million house in order to go there.

[00:11:13] Clif Mark: And all of this, this. Wealth segregated public schools, the private schools. The super intensive parenting. Hunting with the, uh, Expensive nannies. This is all with the view to getting these little 9.9 percenters into a great college so they can remain in the elite class is that right?

[00:11:35] Matthew Stewart: Yeah, so Um, you know, this is also a good place to point out that some of the core values of the.

[00:11:42] 9.9%, uh, if you take them down to the root level, they're actually good. Right? I mean, education is a good thing. Um, and, um, that's

[00:11:51] Clif Mark: In moderation, like anything

[00:11:53] Matthew Stewart: well, it's, it's In moderation, and it also has to be, it has to make, um, sense.

[00:11:59] So, I mean, if you educate too many people to do something well, then education stops being. A good thing. Um, and what's happened with the American education system and people don't appreciate how much it has changed in this respect. Um, at first there was no public university system. Then starting the late 19th century.

[00:12:19] We created a public university system in the middle decades of the 20th century up to those sort of. Uh, the third quarter, I would say that public system was remarkably effective in, um, in bringing education to a large number of people who could make use of it. Um, but what's happened in the last starting the last quarter of the 20th century and up now is that that the education has become a great, um, class sorting mechanism.

[00:12:45] So we have too many people being, uh, going through an expensive, an overly expensive higher education system after going through this very segregated and kind of unfair secondary system. Um, and those who can get into that top sliver, you know, they do very well. They get appointed to their positions, the 9.9% and the other one other ones get this big load of debt that kind of sinks them like a rock down into the 90%.

[00:13:09] Um, and it's not a, it, it really is, um, not a good system. It's not a good system. And yet what most Americans respond to it is rather than thinking about changing the system. They focus on the kids and they want to, want to change their

[00:13:27] Personal responsibility.

[00:13:29] Track 2: Yeah. They want to change the kids so that they succeed within this slightly insane system.

[00:13:34] Uh, and so you were, you were asking what, what happens then to the kids? Well, Yeah.

[00:13:38] I mean, I'm, I'm not a professional psychologist, but I do read, you know, the, the S the study is, and I can see a bit of what's going on. I think there's some gray in there. I think some, you know, it's great to, you know, push people and so on and throw them into competitions and, but we've ever done it.

[00:13:53] I mean, it's just pretty obvious that we've ever done it. I mean, it's crazy, you know, you have, you know, a high degrees of, of, of mental illness among, um, among teenagers. I know that it's not the college game, isn't the only thing driving it. People will blame social media and so on, but, um, you know, it's, it's a factor and it's, it's, it's not good.

[00:14:10] And then that, that then raises the question. Well, if we love our kids so much, why is it that we're doing this to them? What's, what's really driving a process that we kind of know. Isn't best for them. And that, that takes us back to the structural economic inequalities that like people to pay attention to

[00:14:27] Right. So just to recap a little, um, about this transformation of the education system, you're telling us that the public university system, the public college system in the states really started getting built up mid 20th century. And it brought in a lot of new people. It became more egalitarian, more people were admitted and that probably helped them join the middle class.

[00:14:53] Um, but then it's changed since then. So he tell us a little bit about how it got more expensive and more competitive leading to this high pressure race to get your kids, get your kids in.

[00:15:08] Track 2: so, um, there are many pieces to the story, but if there is, there's a simple, straight, straightforward one it's. State governments decided they simply wouldn't fund it.

[00:15:20] Um,

[00:15:21] Track 2: Um, the federal government came in.

[00:15:23] with a well-intentioned, but ultimately hugely problematic program to, uh, create debt that would allow students to go, but then dump them with a debt. Um,

[00:15:36] and so the burden for the public universities shifted from the public to, um,

[00:15:43] individual students who then were in a position of having to place bets. And if you have a society where you know that if you go to college, you're gonna have some chance of, of moving ahead and having an opportunity. And if you don't go, you're basically locked out.

[00:15:55] Well, you'll take risks,

[00:15:56] Matthew Stewart: you'll take gambles and that's

[00:15:57] Track 2: what many students have done. So that's, that's, I think the most important part of the story, the other part has been the creation of these boutiques, uh, universities that have essentially hogged the prestige. It's an obvious point. I hate to say because I was a beneficiary of this, um, system, you know, having gone to these fancy universities myself, but, um, we have a system that funnels public money to the richest universities, right.

[00:16:25] They, they have these unbelievable endowments, Uh,

[00:16:29] you know, Princeton has over $4 million per student in its endowment. Um, Harvard has close to that. Yale has close to that. Um, and that money is partly from, from you on maybe not you. Cause I guess you're in Canada, but you know, it was from taxpayers because all of that is tax advantage, money it's it's um, you know, tax deductible and donated here, the returns are generally tax free and they they're of course, good education.

[00:16:59] So, um, that has, um, created this strange system where we have the best universities in the world. Because they are also the richest and they have they've cornered this prestige. They're also happened with the oldest American universities, but they also are small, they're tiny. They don't serve the public.

[00:17:18] They serve an inclusive, increasingly narrow elite. And they, they end up being kind of trophies that guide the lives of the, of 9.9%. And so as an individual playing within that game, of course, people make, make the obvious choice, you know, do I send my child off to the, um, you know, underfunded, uh, state college or university that's, you know, um, may not provide much of a leg up or do I, you know, make the extra effort and push them ahead with this, um, you know, by sending into one of the special places.

[00:17:49] And so that that's, the people are by and large, tried to do the second thing it's increasingly difficult to do. Um, and you know, obviously it doesn't work.

[00:17:58] Um, well, I mean, it doesn't work for everyone, but for the people who get in,

[00:18:02] Track 2: Yeah, I guess that's what I

[00:18:03] do,

[00:18:04] Track 2: I you're absolutely right. No, it doesn't work for everyone. It's not, it's like a system that, uh, move society forward. It definitely moves individual people forward.

[00:18:14] Right. So our 9.9 percenter. Competitive preschool, private school, Princeton. Then they graduate. They're going to go out there and make it, uh, what happens to them next?

[00:18:28] Track 2: well there, so there's two other parts of the story we need to get out there's that they get married and

[00:18:32] Matthew Stewart: they get a house.

[00:18:34] Clif Mark: Right.

[00:18:34] Track 2: Um, and then there's a lot more to the story by that. I don't, I don't want people to think my book is just like a domestic analysis, because I think there's a lot to be said about, um, uh, the economic structure, but let's just focus on the lifestyles of these semi rich and not famous.

[00:18:48] they, uh, They get married and there is evidence, um, that we have,

[00:18:54] Matthew Stewart: uh, assortative mating that

[00:18:56] Track 2: is, that they liked, tends to marry with lake. , and so the, , um,, members of the elite tend to marry the members of the elite in it. You know, his aristocracies have always done this, and that's what, that's what we're seeing now.

[00:19:09] Um, there are two other aspects of it that are worth drawing attention to, it turns out there's even more sorting at the bottom end. So if you are someone without a high school degree, the odds that you'll marry, somebody else without a high school degree have gone up dramatically and they've gone up higher actually than the, at the other end, you know, the people with advanced degrees.

[00:19:27] So that's kind of interesting. Um, and the other much more important point is that, uh, It's not like a, you know, city mouse, Mary city, mouse and country mouse, Mary's country mouse, because what happens is the city mouse marries the city mouse and the country mouse just doesn't get married at all. That is to say, um,

[00:19:44] among the working classes, the bottom deciles of the wealth distribution, the marriage rates have plummeted.

[00:19:51] They've just gone down and against. It's a complicated story. You can't, I don't want to get all mono causal about it, But on the other hand, let's, let's talk about the big, you know, elephant cause in the room, which is people don't get married if they don't have the money to make for a viable marriage partner.

[00:20:07] But you're saying that it's not the deplorable morals of the working class. That's

[00:20:11] Track 2: Yeah, exactly. Well that, but of course that, and then that's part of the value system of the 9.9% is to say, oh yeah, it is their, their, their morals. They just have bad values. Right. , but you know, these are these, , Sociological trends I think are so pronounced that, uh you can see them from afar, even with the haziest of statistics.

[00:20:29] You know, marriage has kind of collapsed among the working classes, but it's actually holding pretty strong and steady, at the top end of the economic spectrum.

[00:20:38] Uh, good for good for them, I guess. But,

[00:20:41] Track 2: yeah. And then there's the houses, so we should talk about the houses. So they move into good neighborhoods because you know, the American system now is, um, you know, your, your zip code is a big part of who you are. um, and part of that is that, um, of course the zip code is what's what's, uh, redistributed a lot of the wealth in the country.

[00:21:02] I mean, uh, There are some analyses that suggest that, um, the, the reason why the 9.9% is held onto as well. And the reason why the named plan is lost, it is mainly that you've got homeowners and good zip codes in one group, and you've got non homeowners in bad zip codes in, in, in the other group. so um, that's a big part of the story.

[00:21:22] Um, and here again, the kind of the cultural things start to play in when you, when, when you look at frankly, um, the nimbyism right, we all know about this, right? Nobody wants anything done in their backyard. So, um, the 9.9% owners move into a, a good neighborhood. And the first thing they do is, is they throw cement over anybody's plans of, uh, anybody else's plans of moving in.

[00:21:43] Right. And to make sure that the population density stays low.

[00:21:46] Yeah. Well, they didn't, they didn't pay to pay that money to be in a neighborhood with, I don't know, a tall apartment building or public housing or,

[00:21:54] Track 2: Yeah.

[00:21:54] no, it's true. Look, if you're a homeowner and you pay a certain amount of money for a property, and of course you're going to be extremely angry and upset when, when someone does something to them that you perceive as, as, um, affecting the value of your property. And in fact, that's like, that's the prime motivator of, of most people.

[00:22:12] And you know, this is where our, our, our political culture of tracing everything back to individuals becomes so problematic because if, you know, if we, if we just look at the individual behavior, then people in that category will say, Yeah.

[00:22:27] and what are you gonna blame me for? You know, trying to protect my property value. Uh,

[00:22:32] I have to say, well, it's not like you're the cause of the problem, but you're not solving the problem. And you're, you're kind of contributing to perpetuating it because the reality is that we do have a problem and it is essentially a social problem, a public problem. And don't kid yourself that this is sort of the way nature works.

[00:22:48] You know, zoning laws are not created by nature. We have zoning laws, those are human creations. They're often horribly apply. They're often really appalling, abuses, local power and so on. Um, but you need to, we need to figure out how we can apply them in a way that's fair for everybody and not in a way that's kind of, uh,

[00:23:06] opaque and that ultimately works to entrench, um, the advantages and privileges of a small group in society.

[00:23:14] so maybe you don't hate the player, hate the game, but also fuck the players too,

[00:23:20] Track 2: Yeah. Yeah. I guess we're going to break kind of, as I say, the ambivalent thing there, I think that's actually right. Yeah. Don't hate the player, but you know what the players contributing to this thing and, and, you know, maybe, maybe we all need to think about playing a different game.

[00:23:31] Um, and by the way, you know, they're playing different games in other countries.

[00:23:35] I'm not saying that any country has, uh, you know, a complete solution to any of these problems, but it's not like most of the solutions are impossible. I think that's another kind of dead end that Americans tend to get into. They they'll say, oh, it's just nature. It's just, you know, you know, people are different, you know, some people are smart, some people are dumb.

[00:23:49] Some people, you know, work hard. Other people don't work hard. And so you get, you know, and so consequently, you get rich white neighborhoods in one place and border neighborhoods of color and another place. It's just a fact of nature. And that's, you know, that's sort of delusion and self indulgence in my

[00:24:04] I regret to tell you it's not only Americans.

[00:24:07] Track 2: Yeah, no, I, I, I, I told I totally accept that.

[00:24:09] Uh, and, and, you know, one of the interesting things is I've gotten feedback on this project from, you know, people in other countries. Um, and, um, and by and large, they, they describe very similar phenomenon in their own countries. So no country is as solid, but I do think that, um, uh, America is kind of on the, on the cutting edge in, in, in not a great way on, on this and, and the numbers, the wealth distribution numbers back that up.

[00:24:34] So, um, it's much more skewed in the United States and the, and the other disparities to, you know, the, the, the, the racial disparities. And, you know, the geographic disparities in the United States are, are, are significantly more pronounced than in most of the, uh, I guess what we used to call the industrialized countries.

[00:24:51] Um, so I'd say it looks a little more like places like Brazil and India than it does Germany or Japan.

[00:25:00] Great. So that is a geographic perspective. The us is more on equal than other countries. The disparities are getting a bigger and. The upper-class has more advantages. But what about he historical perspective? Has it always been the case that a, the 9.9% or the upper-middle-class the elite. Hasn't always been the case that they're defending their own class position against.

[00:25:24] Those below them.

[00:25:25] Track 2: I think historically, it's too simple to say that that's just like a nasty class.

[00:25:29] That's out to explore it. I think that actually they played a key role in creating a vibrant economy, uh, but with rising inequality, with the growth of, Uh,

[00:25:37] all the markets and so on, they have become kind of twisted and the 9.9% by sort of Manning that machinery by running, you know, the op the sort of the machine that keeps that system in place, or are directly contributing to inequality.

[00:25:55] It's a more complicated argument, but,

[00:25:57] So, so, uh, once upon a time, um, managers and lawyers did contribute to society and, uh, help the economy. And now they're more the helpers of the oligarchs funneling wealth, upwards,

[00:26:13] Track 2: yeah, I think that that's, I mean, look, it's way too simplistic. They were absolutely rotten, you know, racist lawyers in the past, so on. Um, but, um, when you have a, a system that distributes wealth, upwards,

[00:26:28] to an oligarchy, those oligarchs will tend to hire a professional class and a manager or class whose main role is to protect their wealth.

[00:26:38] And that's what they do. Uh, and they do it very well. And it's, it's very hard to disentangle. uh,

[00:26:48] That from a legitimate function because, uh, professionalism does have a certain legitimate function, right.

[00:26:54] You want your doctor to be professional in the sense that the doctor will give you advice that's in your interest and not in his or her economic interest.

[00:27:03] Right. Um, and you want a manager to kind of, you know, resolve the agency problem, be able to, you know, work on behalf of all the stakeholders in a particular economic activity. Um, so those are important rules in any functioning economy, but when you have massive inequality, they get twisted. Um, and, um, you know, Uh you know, huge parts of the medical profession are at this point, sadly, are, are, are, you know, organized around the project of maximizing.

[00:27:31] Uh, profits for a few large corporations. Um, and, um, the managerial elite has become, you know, heroically, parasitic, um, you know, and I mean, seriously, when you look at the executive compensation, I mean, it's just, it's just hilarious. And I know some of these guys, cause you know, they went to school with, at these fancy universities and they're one day, you know, they're, they're, they're nice guys, but you know, are they worth $20 million, $60 million a year?

[00:27:56] Of course not, it's preposterous, it's just daylight robbery. But, and, and of course they're, they're beyond the 9.9%, but it's that 9.9% culture that essentially elevates them and you know,

[00:28:08] Right, right. Speaking of your rich friends from university,

[00:28:15] Let me ask you how the economic aspect of your argument maps on to politics in America. Because on the one hand, the 9.9%, these are rich people. These are managers professionals. They make a lot of money and. Uh, stereotypically traditionally the Republican party is the party that wants to cut rich people's taxes.

[00:28:38] But. In your book. When you talk about the 9.9%, they sound a lot like rich liberals specifically so how does the economic story map onto the political story in the states

[00:28:53] Track 2: The important empirical point I would make is that, um, the 9.9% is not just white liberals.

[00:28:59] So, um, if we think about in purely economic terms terms, it does skew. but only by, you know, um, something like, I dunno, maybe 10 points, something like that. , um, so it's pronounced a huge structural issue in American politics right now is that yes, the, that upper middle-class has migrated in large numbers of the democratic party.

[00:29:23] However, there's still a very large group that's in the Republican party. , and you can't say that that's not part of this whole, thing. , and I guess the final empirical point I'd make is that there isn't an obvious overlap between the, um, economic interests of this group and their politics. And in fact, there's often a kind of a, disconnect.

[00:29:42] And, and it's really only in there kind of the unspoken part of the politics where you see them acting in a sort of, you know, class interest way. So, so, you know, the, the, the overt politics, a lot of the 9.9% is in fact about reform. And that can be

[00:29:56] Matthew Stewart: sometimes right-wing reform, but usually

[00:29:58] Track 2: it's left wing.

[00:29:59] Um, but then when you look at their behavior, like, you know, what they do when it comes down, so you know what to do with their local school and their neighborhood and so on. That's when you can see that that's

[00:30:09] when you

[00:30:09] the state to

[00:30:09] build a lot more public housing, but in no specific neighborhood.

[00:30:13] Track 2: Exactly.

[00:30:13] In somebody in your neighborhood, not mine. So, um, so it's complicated.

[00:30:19] And, um, again, I, I just want to say that class analysis is too simple. It's not the important thing to understand is the way in which, um, any unequal systems that, that essentially generate, you know, rents to, to use the economic language, that those kinds of systems, Um,

[00:30:43] only create, uh, Th that the creation of class economic class interest is only one small part of their action, because another much bigger part is the sort of disruption of a reasonable human relations and the creation of kind of disintegrated or fragmented societies.

[00:30:59] Let's let's just take a minute with that because. This is a really interesting and big argument in the book. And the idea is that. Unequal societies. Don't just create separate classes with interests that are objectively opposed to. Each other. It's that. Inequality actually, uh, harms human reason. It makes people.

[00:31:22] People less reasonable and therefore less able to get along properly. Is that, is that right? Can you explain. How that works.

[00:31:30] Track 2: I am a philosopher, so I'm committed to making these abstract statements. And my abstract statement Is that

[00:31:36] you're on the right podcast.

[00:31:38] Track 2: makes human beings unreasonable and they're

[00:31:40] Matthew Stewart: there to a, senses in which

[00:31:42] Track 2: it does that. When is it? Is that I think it's unreasonable to be any well, that is to say, I think human beings are naturally equal in a certain sense.

[00:31:49] I don't mean that everyone's

[00:31:50] Matthew Stewart: the same or anything like that,

[00:31:51] Track 2: but I mean that if you organize human society, it's pretty difficult to do that in a way that does not presume a high degree of natural equality. And that's generally because you're organizing society. For multiple generations, not just for, you know, you and me are the three of us gathered in a room, but rather, um, uh, you're creating a system and it's difficult to do that in a reasonable way without making the assumption about naturally quality, but there's more to it than that.

[00:32:16] There's a kind of a, sort of more, you know, biological argument, which is that, um, human beings have certain mental heuristics that they use in analyzing moral situations and analyzing just, um, problems that they face in their life. Uh, and those heuristics, do you have a kind of, um, arbitrary character?

[00:32:37] They, they didn't arise from pure reason. They rose from, you know, evolution, human experience, the general human condition, uh, and the most important condition, um, throughout, uh, the early, uh, and most extended period of human development was equality. So human beings essentially have a moral apparatus. That starts with the presumption that humans are equal.

[00:33:02] Um, and then works around that. And in early human societies, there was nothing like the degree of inequality that obtained after a civilization large-scale civilization, you know, being in with what we call, uh, somewhat problematic problematically, agricultural revolution arose. , so I think that th that, that kind of unreasonability, is when you take a cognitive apparatus that's does that design or that it works in certain kinds of conditions.

[00:33:30] And then you radically change those conditions. You get bad thinking,

[00:33:34] So it's the same kind of argument, you know, uh, our taste buds go for sweet and fatty and salty things. And that's because in a certain natural environment that was nutritionally sound. Whereas in an environment created by PepsiCo, that'll kill you.

[00:33:49] Track 2: Yeah.

[00:33:50] exactly. So I'm just taking that basically words. It's like the, you know, the thinking fast thinking, slow argument, um, that, Uh,

[00:33:57] you know, we have these heuristics, these shortcuts, and I'm simply adding this observation, um, that the degree of irrationality that involves is not a temporal embedded in nature for all time, with all humans.

[00:34:12] It is rather something that changes with different social conditions and that it in conditions of high inequality, high degree of, you know, ex extraction, domination rent-seeking and all that you end up with our brains don't work so good. And then we, and we end up, you know, trying to, trying to become something like the great Gatsby, or we don't realize what we're aiming for until we get it.

[00:34:32] And then we

[00:34:33] Matthew Stewart: discover it's not what we wanted..

[00:34:36] Clif Mark: Um, yeah, sometimes, you know, it's not what you want, but you, you do it

[00:34:39] anyway.

[00:34:40] Track 2: keep you for it Yeah. Well, look, we can't tell them all the human condition here. We're just going to.

[00:34:44] we're going for small bits.

[00:34:45] I want to just come back a little bit to, uh, you know, your plutocrat, Princeton pals, or rich people, the 9.9% and above, because you mentioned that it's ludicrous, that anyone's worth $50 million a year, but, uh, for all of these upper classes right there,

[00:35:07] Clif Mark: they've got a justification,

[00:35:09] right? The, this natural belief that we go out into the market and we put in talent effort, brain power, brain, sweat, you say in the book and the free market spits out money at us, depending on how much we put in.

[00:35:23] And so if I'm one of these people saying, I don't want anyone to build in my neighborhood, uh, I'm going to tell you, Hey, listen. I had to go through having a tiger mom and now helicopter dad and go through private school and do all this fight my way up to the elite universities.

[00:35:41] And now I'm working 80 hours a week at Goldman. So how are you going to tell me I don't deserve this? I got here because I am the best and the brightest. I went through that, you know, contest and I'm productive to society, and that's why I'm getting so much money. So that is why the 9.9% is pulling away.

[00:36:04] Not because not because we are, uh, stealing from the 90%,

[00:36:09] Track 2: Yeah, well, so I, first thing I did was offered that person a copy of my book. Uh, and then I would uh, point out, um, that this is, this is what the people,

[00:36:19] to read it for them.

[00:36:20] Track 2: that that's right. But this is what the, the people who helped build the pyramids in Egypt would have said too. I mean, and in it turns out that in building those pyramids, you had gangs of workers and you had a, or slaves basically, and then you had. Overseers and the overseers did pretty well, I mean, the archeological evidence says, you know, they got, they got some fatty cuts of beef and so on. They were, they were, oh, you know, uh, it worked out pretty well for those, for that class of people. And, um, you just have to ask yourself how happy are you, um, building pyramids for the Pharaoh.

[00:36:55] I mean, you know, if yeah. That's how you find meaning in life. Okay. Um, the other thing I would add, I mean, I can confront that sort of argument head on and I, and I try to do

[00:37:09] Matthew Stewart: that in the book. you

[00:37:10] Track 2: know, confronted head-on by simply pointing to the facts that, you know, this so-called free market that that person is talking about is, quite fictional, um, that when they want to maintain the value of their home, they're not relying on a free market there.

[00:37:23] They're demanding that the government step in and prevent things from happening, prevent people from developing, um, so that they can retain the value of their property. So I can show that that's a fiction. Um, I can look at the merit claims and show that statistically it's kind of nonsense. You look at the distribution of wealth and you look at the distribution of anything that would qualify as merit, and there's simply no, no match up.

[00:37:46] But what I find is that that's, not effective because, um, we're talking about a religion and a religion that, that helps people make sense of life. And I think also because that like any religion, it has some, you know, kernels of truth has got something that's that's good. I mean, of course working hard is better than not working or, and of course people should get rewarded for working hard and, you know, get punished or not reward if not working like, but, um, what I would ask those people to do, what I hope to try to do is ask them to sort of, uh, look into themselves.

[00:38:16] That's why I say, you know, are you happy building impairment for the Pharaoh? Because, um, my sense is that they're not as happy as they think they are, um, that their idea of success is, has been handed to them and they're filling it out by getting the job at Goldman Sachs and then, you know, getting the big house and so on.

[00:38:34] Um, and yeah, it might be better than many of the alternatives, but is it really working out so well, I mean, you know, the extreme stresses that, that involves, you know, the, the sort of near, near abuse levels of child rearing, uh, you know, all that kind of stuff, , Is it working out. And it's not just a question about self-interest there it's that if it's not working out, it's probably because the big injustices in the system are in some ways, playing out at a micro level too, even for those who are supposedly doing well, even those even, even for the winners, an unfair system tends to have, you know, little bits of unfairness and

[00:39:12] well, that's one of the great things you know about about the book is that you're talking about a class that has gotten so much richer than everyone else. And in many ways, is doing very well, but it doesn't sound very fun to be them. It's, it's almost like the rising inequality it's, uh, you know, any elites are kind of on a tight, a tight rope or a high wire, but you're just raising it higher and higher and raising the stakes of falling, which, which makes people all the more anxious, in the way and the way they conduct their lives.

[00:39:43] But you say that it's, it's handier to ask people if they're happy with. Pyramids for the pharaohs. , but there is also a lot of points in the book. I just want to add for anyone who's listening, where you make some pretty good arguments and illustrations of why people don't necessarily deserve this money in the way they think they do.

[00:40:04] So if you think right, you talk about the McKinsey meeting and they're basically getting a bunch of money from authoritarian governments or extracting rents. And they're like, God, we're so smart. Like, uh, we, we, we made this with our, with our spreadsheets in our, in our brains and our Ivy league degrees.

[00:40:23] So the question there is just, what do you still, are you still concerned with debunking this myth of meritocracy? Because I still feel. When I speak to people in the 9.9%, they really do believe in this sort of natural view of the economy that, um, they're being rewarded for something special about them.

[00:40:45] Track 2: Yeah, no, I'm, I'm, I'm very concerned to debunk it. I mean, that's, that is, you know, I guess the central argument of the book and it's, it's a central form of this, this delusion, right. That, um, that I want to get at any quality leads people to misunderstand. Themselves. It leads them to misunderstand the sources of their own value.

[00:41:10] Th th the reality about human societies is that we are, we, as humans are incredibly successful in creating wealth. When we work together, it's simple, it's banal, and it's true. We wealth basically comes from people working together, and yes, individual talents, of course, that add, you know, the guy who can chop the, the five blocks of wood instead of the four, we have me that helps a bit too, but the more far more important thing is establishing that cooperation, that form of, Uh, of justice.

[00:41:38] And when we imagine that there's a society where everything comes down to individual merit, we're just misunderstanding where our, our, our actual wealth, our real wellbeing comes from. And, and yeah, these, these 9.9% is now. You know, just, I just have to say, give me a break. I mean, you know, there, of course it's, it's wonderful that they have these really high paying jobs, but it's not, they didn't create those jobs with their brains.

[00:42:05] Those jobs are created by a maldistribution of wealth and they just, their brains help them, help them figure out how to, you know, be the one who, you know, latch onto the little lump of cheese that was sitting there waiting for them. So, you know, and do they really think that, that these other people who didn't, you know, succeed in this, uh, you know, the bizarre admissions processes and the, and the strange interview protocols and all that, that those people have have less merit that they actually contribute less to society because they didn't, you know, snag onto this, uh, spot that had me seated next to a gusher of free cash.

[00:42:38] I mean, come on, go up guys.

[00:42:41] well, you know, it's, I, uh, I, not along vigorously when you say it, but I went to, you know, I went to the special universities in England. And so I will say that privileged kids from everywhere are kind of like this, but the Americans, the American Ivy leaguers were the worst, just in terms of telling me about their achievements.

[00:43:06] I'm like, you're 20. You don't have any.

[00:43:08] Track 2: Yeah, yeah, yeah, no. And, and the, the sense of entitlement that they exude is just astonishing because they come in and they kind of expect that they're going to. be put in the uh, you know, right next to the chairman's seat or whatever, um, for, um, on the basis of, of yeah. Of nothing but that. But they have been brought up in a system that tells them that they have this remarkable value.

[00:43:33] And this is something that is observable in human societies throughout history. I mean, the, the people who, um, are raised in power simply come to believe that the power emanates from within their very own little bodies and brains, and

[00:43:49] hard not to. It's the only thing you can control.

[00:43:51] Track 2: Yeah.

[00:43:52] exactly. And so, and I, you know, it's, it's better for them in a sense to believe that, but it's not better for society.

[00:43:59] And ultimately, I I'm guess I'm arguing it's, it's not great for them either. I mean, you know, living in a delusion, I mean, this book, I should also mention, it originated out of my, another book I've just finished on the civil war, a struggle over slavery. And I think that some of the same processes played, played out in the rise of the Southern slave holding oligarchy.

[00:44:16] So anyway, that's, uh, but that's a whole nother topic.

[00:44:19] Let me, let me ask you this. Then you were talking a little bit about. How it affects a 9.9% is to believe this about themselves, that they are taking credit for it. What about the effects on the people who don't make it? Because, uh, the way you tell the story, it's that the 9.9% it's a culture and that applies far more widely than the people who actually have the money to belong to it.

[00:44:43] So what does it tell people who, don't, don't get the McKinsey job.

[00:44:49] Track 2: Yeah.

[00:44:49] I mean, sociologically speaking, the data is pretty incontrovertible. I mean, it tells them broadly speaking and only in a statistical sense, not in every individual case that, um, there are less worthy, they're less worthy of finding a marriage partner if that's what they want. They are, um, less worthy of social respect, and that that they are unproductive, that they don't really contribute much to society.

[00:45:12] That's what it tells them. and it shows up in, you know, the, the, health numbers, uh, mental health, as well as physical health, um, all in a, in a broad statistical sense, but there's an absolutely no question that this is the message that is getting down very effectively to the people who are in. Um, making it and I, I, Yeah. I just want to stress that. I'm not saying that they're, you

[00:45:32] Matthew Stewart: know, they're every one

[00:45:33] Track 2: of the bottom 90% is sad. That's just not the case. Plenty people find, you know, really active, productive lives, you know, with any level of economic wellbeing, but statistically speaking, that's what we're creating is this society where you got, you know, a small group who can claim to be happy because they've achieved what it is you're supposed to achieve, but that success does come to a significant degree on the, on the basis of, uh, keeping a whole bunch of other people, uh, feeling unworthy and lacking in respect.

[00:46:03] Yeah. It's interesting. And, uh, Too bad,

[00:46:09] Track 2: yeah. Suck it up. Deal with

[00:46:11] it.

[00:46:14] I, uh, I have a feeling this book, pissing people off, right. So I wrote a very short piece once about meritocracy and, uh, it's about, you know, it's false and believing. It makes you a worse person. And that was years ago into this day. I still get the occasional message telling me I'm an idiot.

[00:46:36] So who did, who did this book aggravate and like, why are they mad at you?

[00:46:42] Track 2: yeah, it, it, obviously it did, Uh, it does piss a lot of people off and yeah, I, I get, um, a fair amount of that kind of, um, uh, reaction. Um, and look, there's a really simple explanation. I mean, this is, this is part of the um, religion that most people use to organize their lives. Um, And that religion convinces them.

[00:47:05] Not only that they're good, but they're doing good for the world, right? Like, so when they go out and work hard and get that, you know, uh, that professional job, um, you know, this is like, uh, it's good. It's what society is telling them to do. And anyone who suggests otherwise is just, you know, the devil, um, and you know, you get, uh, so there, there there's that one individualistic response.

[00:47:29] There's also the, um, you know, the success of many years of red baiting and anticommunist stuff that basically tells people that anybody who dares to question our market suggests that it's not free and suggest that there are a lot of oligopolies running around there. And a lot of cartels, all that, anyone who, who, who, who breeds a word that suggests that the market is not absolutely free as a communist is, is so is there a socialist and so on?

[00:47:54] And, and, and it's like, Venezuela, next stop. So there's, there's a certain amount of that. But, you know, I think the main, the main reason is though is the first it's it's that, um, you know, people organize their lives around this, um, pursuing merit. And I think that, you know, um, I th I, I, I insist that there is some good idea at the root of it.

[00:48:16] I just, my issue is don't mistake, um, an ideal for a description of reality. And I think that that's what a lot of these people are doing. And of course, then they, when you say it's not real and they, they think you're, um, you're, you know, destroying their, their very fabric of existence.

[00:48:34] yeah. So, I mean, do you, your, your personal history, from what I know of it from this conversation seems a pretty straight down the line 9.9, uh, percent type life like fancy schools management consultant. And then you can even say, you know, the cultural power of being an author. Um, and the reason I ask is have you, have you run into problems with old friends or acquaintances or Matthew?

[00:49:03] What do you, what are you saying? This is ridiculous.

[00:49:07] Track 2: no, I mean, I, I think that, um, most, um, most members of the 9.9% have S have enough self-awareness to, to grant that there is some validity to the critique. So I think that this sort of extreme, hostile reaction isn't actually representing a majority. I think it's representing a kind of. You know, fanatical and minority, um, I think most are, are, are open to it.

[00:49:30] I mean, I get some resistance and, and yeah. there's the, um, you know, the sort of what I considered as a pseudo hypocrisy charge, you know, like, oh yeah, well, you got a fancy degree. So I guess, you know, you can, you know, you're just, engaging in, self critique or, guilt or something like that.

[00:49:46] To which I would just say, um, you know, I'm, I'm not, I don't know if it matters. I mean, like, okay, you know, you could say whatever you want about me, I'm just calling what I think is what I see. Um,

[00:50:01] And you would know, right?

[00:50:03] Track 2: and, And I should also just point out to him in terms of my own personal history, um, choosing to become an author, you know, you're right?

[00:50:12] That there's, there's a certain kind of, you know, Cultural power or something like that. I have to say that I have not achieved it. So that's, you know, but, but nonetheless, there, there, there is that. However, I think, you know, you have to at least acknowledge that as an economic plan. yeah. getting in the 9.9%.

[00:50:29] It's a really, really bad plant. Okay. It's I just want, I just want everyone to know that, um, I, this is, I, I mean, I'm not gonna say I do it all out of charity, but there wouldn't be any difference if I did it out of charity. Um, and the other point I would just make historically is that, well, in my, um, writing, I make, uh, a big deal out of the, um, my, my grandparents' generation who did come from a, uh, temporarily wealthy and then lost it all kind of, um, situation.

[00:50:55] I mean, my, my background was, was extremely middle-class. I mean, you know, it was like my, you know, my father was a, uh, a Marine and we, you know, lived in the, not in the, uh, in the nicer suburbs, but in the kind of plain vanilla ones. Um, and, um, and I know it sounds, um, naive and unpleasant to suggest this, but when I went to, when I applied to universities, I had, no, I, I really did not know that it would lead to a high income.

[00:51:23] I didn't, I didn't, I didn't know what a management consultant was.

[00:51:27] none of us did.

[00:51:28] Track 2: Yeah. And I went to those places because I thought that's where people who wanted to do research into, um, you know, natural things into, into, you know, what actually happens in the world. That's I thought that's where they go. You find smart people who don't give a crap about, you know, stupid jobs and bureaucracies and titles, but who just want to investigate nature, want to study physics or as it turns out philosophy.

[00:51:52] So I know it sounds kind of naive, but that's, that's kind of what I thought. And I guess if I have an ideal that I, you know, uh, some sort of nostalgia, which of course is always problematic, but if I have that, it would be for, you know, something along those lines where yeah, you have, you know, of course you have smart people trying to, you know, look for, uh, you know, centers of excellence and do great things, but you know, it doesn't have to be bad investment banking.

[00:52:14] I mean, it can be people who actually want to learn something about the world.

[00:52:17] well, yeah, I mean, I was not at all, uh, trying to accuse you of being rich or something. It was, it was much more of just the point you've almost made, which is the. Coming from outside of these elite institutions. It's easy to think that they're there, you know, for this, a higher purpose of learning, you know, the, about the big questions and so on and natural things, but having, having gone through it, uh, that probably gave you a bunch better perspective to write this kind of book,

[00:52:45] to see them.

[00:52:47] Universities is more of a sorting mechanism and so on, then this romanticize, uh, view of, of disinterested learning.

[00:52:57] Track 2: right, right,

[00:52:58] Yeah.

[00:52:58] okay. Well, um, this has been great. I want to, I want to thank you for being honest. I mean, a super interesting conversation and, if you'd like to add anything for the audience, please, please do now.

[00:53:12] Track 2: oh, no. I just want to thank you for. Taking the time and having a very interesting conversation. It's really wonderful.

[00:53:18] alright. Thanks.