Part of the American dream is that the feeling that there is no rigid social class. Everyone is a millionaire down on their luck. You only need to work harder or be more clever—ideally both.
To some extent, it is true. Realistically, however, it is rare to move more than one or two income brackets from where your parents were when they were your age.
Race in America, however, is fraught. The history of racism is recent, overt, and systemic. It is impossible to deny the history of racism unless you are an idiot. The question is what, if anything, can be done about it that actually improves things. The answer is probably very little. Affirmative action is problematic and has some negative side effects, but it has probably been a net positive for society. It will also probably be struck down as it is now negatively and unfairly impacting another minority group.
> Realistically, however, it is rare to move more than one or two income brackets from where your parents were when they were your age.
You state that like it's a bad thing. If you can bump a bracket or two per generation, 2 generations can take you from near-penniless to upper-middle class.
But the stats seem to show that it's substantially less common in the US than in a bunch of other developed countries, including countries that literally still have monarchs. A "Global Social Mobility Index" doesn't even put the US in the top 20. It looks like if you consider fathers in the bottom income quintile in Sweden and the US, the Swedish father's son is roughly 75% more likely to make it to the top quintile than the American, and the American's son is 68% more likely to remain n the bottom quntile than the Swede. That's a pretty big difference.
If we value class mobility enough to talk about the "_American_ dream" maybe the US should actively work on improving that.
These studies of intergenerational class mobility can be highly problematic, because they often just look at income, very much less access to opportunity. The reason being patterns like the following are not uncommon:
1. John is a banking executive who makes millions of dollars a year.
2. John has a son, Jack. Jack sees how much his father worked and decides to take a very different path, becoming a documentary filmmaker. From his family's wealth, Jack never worries much about money, but his nominal income is quite low.
3. Jack has a son Joe who decides he'd rather live in the giant estate of his grandfather than the small suburban house of his father, and goes into banking. He gets help from his grandfather's contacts to land his first job.
Thus, if you look at these 3 generations in isolation, you'd count them as going from the top quintile to the bottom quintile to the top quintile again. But, in reality, nothing about their social status has really changed, nor their access to opportunity.
There was a post on HN from a couple years ago that looked at a study that said the rich families from Florence, Italy in the 1400s were still the rich families today: https://news.ycombinator.com/item?id=18872376. The argument was that there was much less actual social mobility than some other studies suggest.
The USA has larger disparaties across quintiles, in large parts due to its history as a country of (sometimes involuntary) immigrants. I think it will be interesting to see how Sweden's favorable metrics here change as a result of their wave of unskilled immigration, which is probably too recent to be fully incoporated in any generational study. I'd also be interested to see mobility in 'absolute' terms, perhaps relative to global percentiles. Moving up 10% in a very disparate country might reflect more social motion than jumping two quintiles in a very flat country.
Also, moving between income quintiles misses other aspects that might be relevant for a broader definition of social mobility: moving into the top 1% or top 0.1% of income and any movement in wealth. I'm not having luck finding a source at this moment, but I recall seeing that the USA performs favorably on this metric compared to europeans with millenial legacies of state-sanctioned hereditary nobility.
A society composed of 99% peasants, who all earn and own about the same amount, and 1% nobles (who dont 'earn wages' and own many times more than all peasants combined) would look very good through many social mobility metrics.
> It looks like if you consider fathers in the bottom income quintile in Sweden and the US, the Swedish father's son is roughly 75% more likely to make it to the top quintile than the American
I'm not sure the American dream is income mobility, though. The American dream is wealth accumulation and amassing wealth often requires trading for a small, even no, income (e.g. founding a startup). At some point you will likely hope to cash out, but those capital gains will only be recorded as income approximately once in your lifetime.
Real life is filled with disappointments and limitations, even with the best social structures in place. The false promise of a social revolution that provides instant wealth and salvation for all is used by populists to gain power, but any attempt to realize this promise leads to worse outcomes for the public.
Even if we levelled all wealth, life would be limited by the finiteness of resources, and only economic development - which this levelling would inhibit - would alleviate such scarcity.
Consider what would have happened if society had followed John Stuart Mills' advice in 1848 and maximized for equal distribution of income, resulting in per capita GDP barely increasing from its $2,000 level over the last 170 years:
"It is only in the backward countries of the world that increased production is still an important object: in those most advanced, what is economically needed is a better distribution"
-John Stuart Mill, Principles of Political Economy (1848, book IV, chap. VI)
One possibility is that such an egalitarian society would have produced more brilliant engineers and economists, by providing more opportunity to manifest one's talent to lower economic classes. And they then could, perhaps, figure out the unsustainability of their trajectory earlier, and correct it to produce somewhat slower but steady growth without environmental catastrophes, translating to better long-term outcome.
A per capita GDP of $3,000 wouldn't have provided people with the surplus time to dabble in engineering and economics. It's a living standard that today we categorize as extreme poverty.
Eliminating involuntary unemployment doesn’t require levelling of all wealth, it just sets the floor price for labour and maintains a buffer stock of employed people ready to be hired rather than a buffer stock of unemployed people who are less ready to be hired.
Without forcing people to work, it is impossible to eliminate involuntary unemployment. The government using tax dollars to offer people jobs that don't match what they're seeking would result in them refusing to take those jobs, and remaining involuntarily unemployed.
I think people generally care about the public interest because of their shared humanity. People generally identify with their society and want to see it prosper.
They should also care that their society remains well structured because it increases the probability that their own situation improves over the course of their life, and that their children/grandkids will be wealthy.
They gain nothing from believing in the false promises of demagogues, except the ephemeral contentment of false hope.
> I think people generally care about the public interest because of their shared humanity. People generally identify with their society and want to see it prosper.
This is far from universally true, and to the small degree that it is true, it is an aberration from the vast majority of human history.
> They should also care that their society remains well structured because it increases the probability that their own situation improves over the course of their life, and that their children/grandkids will be wealthy.
Should they? Sure. Will they? History says it is very unlikely.
What also comes to mind is the sociological study where they present two people with $100 to split between them. Person A decides the split, person B chooses whether to accept the split or reject the split, in which case the $100 is taken back and neither person gets anything.
The problem with your whole philosophy is that it supposes that Person B will accept the split no matter how much it is skewed to Person A, because it is the 'rational' thing to do from an individual's perspective (any money is better than no money). However, what actually happens is that above the 60% - 70% mark, Person B will often reject the split, just to spite Person A.
> They gain nothing from believing in the false promises of demagogues, except the ephemeral contentment of false hope.
Demagogues work to convince people that they are getting an unfair split and that they should reject the split. It makes their job a lot easier to do if people really are getting an unfair split.
>>This is far from universally true, and to the small degree that it is true, it is an aberration from the vast majority of human history.
I think you're interpreting my statement to suggest that people generally prioritize the public interest over their personal interest. I'm not. I'm only claiming that people, ceteris paribus, generally would prefer that society at large prosper. But they would not at their own expense.
>>What also comes to mind is the sociological study where they present two people with $100 to split between them.
This is very true.
Thiel famously believes in Rene Girard's theory that jealousy emerges from the mimetic instinct, and that religious admoninations against it are a social innovation to constrain the dark side of mimesis:
They should also care that their society remains well structured because it increases the probability that their own situation improves over the course of their life, and that their children/grandkids will be wealthy.
Are you calling USA "well structured"? Socialist European nations have much more income mobility than USA has. Few are threatened with penury, most employers pay a living wage, and many more people who have a great idea and the will to build it, do so.
Whether the US is well structured can be debated, but my point is only that even a well structured society can have poverty that cannot be eradicated in a generation.
Consider the US in 1870: per capita GDP was $3,000, so even with a totally noncorrupt and absolutely competent government, and perfect wealth inequality, the entire population would be in poverty by today's standards. Income growth takes time.
As to your point: wages in Europe are lower than in the US, and there is much less funding available for startups.
Europe is also not appreciably more socialist than the US:
Huh. I guess your attitude isn't shared by the two plus million people a year, who literally risk life and limb crossing our boarders, for a shot at being an undocumented alien.
So by thus argument we have nothing to improve in this country untill standards of living sink to the level of North Korea and finally noone will be willing to immigrate
We shouldn't even be talking in terms of generations. Bloodlines exist in biology, but we need to completely disregard them when talking about social issues. Working your ass off so you can send your children to a good school and they can then live a better life than you did should be considered a societal failure, not a success story of economic mobility.
True mobility is when you can work reasonable hours at your horrible warehouse job, enroll in a higher education programme and in 2-3 years, switch jobs to something that pays better. No need to rack up decades of student debt, no need to work crazy long hours or multiple jobs just to afford a place to live.
> Part of the American dream is that the feeling that there is no rigid social class. Everyone is a millionaire down on their luck. You only need to work harder or be more clever—ideally both.
Recently I have been thinking in this vein too... This "American dream" is such a repeated cliché that some may think it's just that: a cliché in the minds of even Americans. But my current hypothesis is that many (most) Americans actually believe it. To the point of being blind of the actual nature of this "meritocracy".
This blindness to the fact that individual agency is not really as powerful as the "dream" states basically reinforces the idea that certain hard to change property of an individual (ie. Race? Gender identity? Sexuality?) must be the core reason for lack of success/progress: the biggot believes not all people are what it takes to succeed, and the biggot's prey believe their core nature/mark is the main reason why others don't support their progress.
> But my current hypothesis is that many (most) Americans actually believe it.
I certainly believe that there is no rigid social class in America and it's definitely possible to move between income brackets with relatively little social stigma. In the UK for example no matter how much money a working class person makes they will never become upper class. Never be welcomed into the top social circles etc., they didn't go to the right schools (pre-college) or dont have the right accent...
I'm not as blind to believe that parental wealth doesn't matter hugely. I also wonder if it might be more difficult to move income brackets in the USA due to the extremely high cost of education.
I believe that as far back as the 60's or 70's, George Carlin was already using his oft repeated line, "they call it the American Dream because you have to be asleep to believe it". Perhaps you're joining a new awakening (or an awokening).
>>Everyone is a millionaire down on their luck. You only need to work harder or be more clever—ideally both.
Race is an unchangeable, decided at-birth deal. Class on the other hand changes based on how you succeed to that end. People do feel class as something that is not fixed, and can be changed.
In some way getting rid of Racism means changing other people, and changing class requires one to change one's own ways.
The problem when you do not perceive class, is that you view those of the same class as adversaries on your way to the top rather than people on the same boat as you, needing to cooperate to improve your overall position and fix your problems. Lower class problems are other people's problems, because you are not really a part of it or won't be for long more (so you think).
Basic human life conditions should really not be up to a game of "success" that by definition has few winners. In my opinion at least.
> The history of racism [in the USA] is recent, overt, and systemic
I am not from the USA. But did racism not arrive, with the first white colonials, along with class? Why is racial prejudice more recent than class prejudice?
The article specifically calls out legacy admissions and other non-academic preferences for white students. There was an article just recently about fencing being a very expensive sport to participate in and one the generates a lot of college scholarships.
Race wars have been used to obfuscate a class war.
Historically minorities were prevented from being capital owners and as that changed aristocrats appealed to skin color while also routinely sweeping the legs out from under poor whites as they still do today, after enraging them stupid shit like tan suits and public protests.
Thanks to inflation, moving one or two income brackets is closer to staying in the same place. $100-200k year in the 80s is equivalent to $600-700k now. If parents made $50-60k then and junior makes $150k, the number tripled but the buying power is worse.
I don’t really understand why we cling to the hallucinations of elders who, given their ages, when they were educated, are “behind us” when it comes to scientific knowledge and intuition, and are gripped by paranoia and anxieties from Cold War and the world at war in their prime years.
They operate on economic models from a period of heavy demand due to war. Afflicted by sunk cost fallacy, evolved the behavior to disposable consumerism.
The last 80 years of economic growth are entirely due to the rest of the world needing to rebuild and the US having functional infra. There’s no way it was sustainable, as the correctness of such activity is merely one generations memory, not some immutable law of reality.
Any sufficiently numerate person can intuit the game being played. Bigger number! Oo! But prices on the market have gradually been inflated to prevent new workers being able to afford real assets, and as a result of other nations catching up and making the same demands.
Of course, you can make any system work with any definitions. It's just more cumbersome to eg state your theorems in cryptography, if your definition of prime numbers includes 1.
When talking about factors of production, it is useful to differentiate between labour, capital and land.
The main distinguishing factor between capital and land is that land is in fixed supply, but you can produce more capital.
i was going to reply land could be 'fixed capital' but doing some quick wiki shows as you say, land itself may not constitute as "capital" [0]... interesting
Land itself is not included in the statistical concept of fixed capital, even though it is a fixed asset. The main reason is that land is not regarded as a product (a reproducible good). But the value of land improvements is included in the statistical concept of fixed capital, is regarded as the creation of value-added through production.
Depending on your analysis, it can sometimes make sense to include land under fixed assets. Eg when you are running a company your accounting can perhaps treat durable assets and land the same?
If you are looking at whole economies, it's often useful to treat land separately. Even if that's not always done.
But I'm some kind of Georgist at heart, as you might be able to guess.
Capital is used here as a euphemism for land ownership. Net worth being mathematical inference of how well land owner “capitalizes” on the possession of land.
Other asset classes came along because, well, useful land is finite, and to create new wealth holders to act as missionaries for the US dollar. “Yeah even this trash is worth money in the US!”
Valuations are arbitrary numerical assessments based upon the whims of the assessors (assignment of currency value to stuff is a social tradition; there is no science that suggests the universe values any bit of itself what with entropy ripping the universes stuff apart), and routinely inflated to validate investors past decision to “buy into” Murica.
Biology being largely unchanged in centuries (in a meaningful way given the context here), the issues in our culture can easily be assigned to political corruption as usual. All the high talk about separation of powers is laughable as DC pols rub elbows at private social events, discussing not systemic change for the public benefit but how to veil graft as justifiable given their intimate connection to our political norms.
Simple really. Most white collar crime is still the same old “deflect, project, until we can change the rules” as policing is conveniently unfunded.
The mathematical gap between classes must be maintained! Or Sauron himself will emerge from the lava of Mt Doom or some shit.
I say we post up at home, stop going to work except to maintain our communities locally, make Jamie Dimon and co knock on every door in the US looking for rent. But I’m weird that way. Except for 2A, I really lean into progressive doctrine, which often aligns with conservative doctrine but media intentionally stokes this stupid culture war to obfuscate it.
To some extent, it is true. Realistically, however, it is rare to move more than one or two income brackets from where your parents were when they were your age.
Race in America, however, is fraught. The history of racism is recent, overt, and systemic. It is impossible to deny the history of racism unless you are an idiot. The question is what, if anything, can be done about it that actually improves things. The answer is probably very little. Affirmative action is problematic and has some negative side effects, but it has probably been a net positive for society. It will also probably be struck down as it is now negatively and unfairly impacting another minority group.