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Residential homes in Sausalito, California.
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The problem with America’s semi-rich

America’s upper-middle class works more, optimizes their kids, and is miserable.

It’s easy to place the blame for America’s economic woes on the 0.1 percent. They hoard a disproportionate amount of wealth and are taking an increasingly and unacceptably large part of the country’s economic growth. To quote Bernie Sanders, the “billionaire class” is thriving while many more people are struggling. Or to channel Elizabeth Warren, the top 0.1 percent holds a similar amount of wealth as the bottom 90 percent — a staggering figure.

There’s a space between that 0.1 percent and the 90 percent that’s often overlooked: the 9.9 percent that resides between them. They’re the group in focus in a new book by philosopher Matthew Stewart (no relation), The 9.9 percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture.

There are some defining characteristics of today’s American upper-middle class, per Stewart’s telling. They are hyper-focused on getting their kids into great schools and themselves into great jobs, at which they’re willing to work super-long hours. They want to live in great neighborhoods, even if that means keeping others out, and will pay what it takes to ensure their families’ fitness and health. They believe in meritocracy, that they’ve gained their positions in society by talent and hard work. They believe in markets. They’re rich, but they don’t feel like it — they’re always looking at someone else who’s richer.

They’re also terrified. While this 9.9 percent drives inequality — they want to lock in their positions for themselves and their families — they’re also driven by inequality. They recognize that American society is increasingly one of have-nots, and they’re determined not to be one of them.

I recently spoke with Stewart about America’s 9.9 percent — the people who are semi-rich but don’t necessarily feel it. We talked about fear, meritocracy, and why the 9.9 percent are so obsessed with nannies. Our conversation, edited for length and clarity, is below:

So, to start out, you write about the 9.9 percent and a “new aristocracy” in America. Who are these 9.9 percent?

The statistical side of it is very imprecise. I don’t think of the 9.9 percent as just everybody who has more than a certain amount of money and less than another amount of money. I see it more as a culture, and it’s a culture that tends to lead people into the 9.9 percent of the wealth distribution. It’s a cultural construct that is defined by attitudes toward family, toward identity issues about gender and race, by education and educational status and the idea of what constitutes a good career, which is mainly professional and managerial.

What does the culture look like? How do these people separate themselves out?

The guiding ideology is essentially that of a meritocracy. The driving idea is that people get where they are in society through a combination of talent and work and study. The main measures of that are educational attainment and material well-being, and anything that we provide to society or other people is on top or on the side of that and is a reflection of our own virtue and not in any way necessary for social functioning or part of a good life. It’s always, essentially, a sacrifice.

The obvious place to look for it is the whole college admissions game. But I think that’s kind of limited, too. I put a lot of emphasis on the family aspect because I think that’s a place where you really see in operation the attitudes and practices that go into child rearing and family formation.

You have at least two very different groups emerging in American society. At a high level, you have people who have their kids late in life after getting a lot of education, have fewer kids, and invest massively in them. And then you have a large group that is much closer to the traditional style of having kids early and not investing as heavily in them — although many of them, of course, try to emulate the practices of the upper-middle class.

One of the things you write about in the book is how much this 9.9 percent are willing to invest in their children — in nannies, in schools, in extracurriculars. Where does this pressure come from, this urge people have to make their kids the best?

I think the driving motivation is fear, and I think that fear is well-grounded. People intuit that in this meritocratic game, the odds are getting increasingly long of succeeding. They work very hard to stack the odds in their kids’ favor, but they know as the odds get longer, they may not succeed.

That’s coupled with another one of the traits of this class, which is a lack of imagination. The source of the fear is also this inability to imagine a life that doesn’t involve getting these high-status credentials and having a high-status occupation. This life plan looks good, and it certainly looked good in the past when the odds were more sensible. But it’s not a great deal. It’s something that isn’t just harmful to the people who don’t make it, it’s also harmful to the people who get involved and do make it, in some sense.

In what way is it harmful to the people who do make it to the 9.9 percent and the people who don’t?

I’m not suggesting it’s equally harmful. The psychological damage to the upper-middle class is kind of trivial compared to the substantive damages other people face. But it is, nonetheless, pretty real.

I would point to the sociological and psychological evidence that you have significant increases in anxiety-related disorders and other forms of unhappiness even among people who are fairly well off. It’s a trade-off that all or most of them are willing to make. But it’s not a free lunch.

Well, even if people are on paper wealthy, they often don’t feel wealthy. They’re always looking at someone who has a little bit more than them. How does that play out here?

That’s almost the defining aspect of life in a high-inequality world. And the important thing is that it affects people all the way up.

I know people who are in the top 1 percentile of the wealth distribution who just feel incredibly poor and stretched because they’re looking around and see other people who have got just that much more and can do that much better. That insecurity is what runs throughout the system. Just because you’re in the top decile, or 9.9 percent, that doesn’t mean you escape it. In some ways, you’re more subject to that insecurity. That drives people to do crazy things to stay where they are and to avoid falling.

To what extent does the upper-middle class drive inequality, and to what extent are they driven by inequality?

Most of this culture of the 9.9 percent is an effect and a consequence of inequality. That said, it’s one of those effects that becomes a contributing cause; it’s part of a feedback loop.

Most of the root source of inequality is structural, and I think much of it goes to an economy that’s no longer as competitive, where you have oligopolies rising without significant challenge. The balance of power between what we call workers and what we call capitalists is out of whack, and that’s a fundamental source of inequality. Race and gender can also play into inequality.

That inequality does have these fundamental sources, and once it’s in place, other mechanisms come in to lock it in and to exacerbate it. That’s where the culture of the 9.9 percent comes in. This culture that focuses on meritocracy becomes a way to justify a professional credentialing game where certain categories of workers are able to carve out high rents for themselves. It’s where certainly families — because they have excess resources — are able to over-invest and lock in benefits.

Those are mostly consequences of rising inequality, but then they feed back into it in obvious ways. They lock people in place, they tend to make it harder for large numbers of people to do well, they exacerbate the irrationalities in society.

It all sounds very gloomy, but I’m not actually that gloomy. I just think this is the way human societies work. There’s nothing in human nature that says we’re particularly good at forming large, complex societies that make everybody better off. These are sort of the forces of entropy at work in human society. I don’t want to be some sort of misanthrope condemning all of humanity. My point is that we are imperfect at forming reasonable societies, and we need to understand those imperfections if we’re to do better, which we can.

We’ve talked a lot about the culture of the 9.9 percent so far, but what does that culture mean for everybody else? The people who can’t afford to super credential their kids and send them to Harvard?

I think the underemphasized concern here is the extent to which the other 90 percent end up buying into this value system to some degree. I’ve been in the child-rearing game, and I see a lot of the madness firsthand — parents freaking out when their child takes a sip of soda out of the refrigerator because they somehow imagine this is really going to make it impossible for them to demonstrate enough virtue to get into the right college. They will curate every experience for their kids — every travel experience, every friendship.

I mostly see it among members of the upper-middle class who can afford it. But increasingly, the same sets of values and practices are clearly spreading to where people can’t afford it and where it doesn’t make sense. They’re also buying into this idea that kids have to be absolutely optimized, maximized so they can get onto the narrow path that leads to a stable upper-middle-class life, and otherwise it’s Starbucks until the end of time.

It basically takes away a potential countervailing mechanism. If society were such that you produce this one noxious class but then that gives rise to a reaction of people angry with this class and then acting out, you might have some conflict. Hopefully, it’s not violent but can be mediated through political institutions, but you have at least a mechanism that might lead to a solution. But when the ideology starts to spread, it effectively removes the basis for that conflict, it neutralizes the opposition in a way, and that’s a problem. It means that the system just continues further down the road toward greater instability.

Why is there such a focus on the nanny? On child rearing?

Nannies cost a lot, you basically have to hire another full-time individual. And that is not something that most individuals can do. It’s creating a definition of success that will define most people out of the running even before they start.

[The 9.9 percent] all have internalized this idea that child rearing is meritocratic breeding, and the measure of your success is how well you optimize your child as a future member of the meritocracy.

That means that to the extent that you can’t yourself spend all of your time raising your child, you need to get somebody else to do it. And that person’s task is not child-rearing as it used to be understood, which was feeding them and preventing them from harming themselves. It’s about optimizing them, and there’s no limit to what you can do to optimize them. And so that’s why you’re going to go for a nanny who’s college-educated, preferably with a degree in child psychology, and who’s capable of organizing all sorts of enriching experiences for the child. The logic is pretty ironclad.

Generally, I don’t think it’s terrible for the kids. It’s just a model of parenting that a) is insane and b) cannot conceivably be emulated by most of the population.

What’s the role of the idea of meritocracy here?

I think that meritocracy mostly gets invented after the fact. You have significant inequality, and then you get people reimagining how the economy works. They first make the false assumption that individual merit or individual talent and effort is the main factor in production, and it isn’t. Most human economic activities depend far more importantly on the degree of cooperation that people are able to establish between themselves — cooperation within firms, cooperation between firms in a marketplace, and cooperation in a society at large in terms of having standards of trust, reasonable laws, and so on. All those things are far more important in determining economic output than mere merit or merely allocating rewards to merit.

People make this false assumption precisely because the inequality is already there, and they’re looking for a justification. Then, they make the further false assumption that the variation in human merit is tremendous — it’s astonishing that some people are literally a million times smarter than other people. You have to qualify a little bit because whenever you criticize meritocracy, someone will come back and say, “Well, people are unequal, some people are smarter.” I have no problem with that, there are differences among people, and those have to be recognized. But it’s completely false to think that those differences are great enough to explain the kind of variation that we see in the economy.

Nonetheless, all of this rhetoric around meritocracy tends to grow and becomes more convincing precisely as inequality grows. In this respect, I don’t think our meritocracy is all that different from previous aristocracy. The definition of aristocracy is just the rule of the best, and people who have merit are also by definition the best. It’s the same kind of rhetoric. Yes, aristocracy usually relied more on birth, but that’s just a mechanism for identifying the people who are going to be perceived to be the best.

And we work more in order to be able to have this merit to be perceived to be the best. That’s one of the things that struck me about your book — how many hours the upper-middle class, the managerial class, is working now to maintain their spot.

There’s no question that workloads have gone up where people are earning the most. There again, there’s this ideology of merit because we think it’s because these people are so incredibly productive. The hour of that corporate lawyer is just worth so much money that of course they’re going to work those extra two hours just to cash in on that. And it’s just so ridiculous, it’s wrong.

Those people are working hard because they intuit precisely that merit isn’t deciding who’s getting to claim these rents. They’ve got to do something to distinguish themselves from the competition, and the way to do that is just to demonstrate a greater willingness to sacrifice, a greater willingness to submit one’s own identity, and a greater willingness to obey. I see this manic work trend as some of the clearest evidence we have that the meritocracy is out of whack and inequality is far too great.

So, ultimately, what are some solutions here? How do we tamp down this pressure people feel to hang on so tightly to their status and this sense that there’s a smaller and smaller piece of the pie they’re fighting for, even among those who are quite well-off?

The solutions mainly have to do with the fundamental sources of inequality, and I don’t think those are that hard to see. Attacking the trusts and the oligopolies, that’s a very clear avenue to pursue; breaking apart some of the professional guilds that strangle the economy. Health care is an obvious place to look on both ends — on how much we spend on it and how access to it is distributed. We need to provide more public support for child care. Another avenue that’s very clear and very difficult to do is housing — we have a tremendous amount of land, and there isn’t really an excuse for the kind of housing affordability issues that we have.

This isn’t a kind of game where you need a 100 percent solution. You can get pretty far with moves that just reestablish equality on a firmer foundation. This isn’t an unsolvable problem — especially if you’re willing to aim for what’s good and not necessarily what’s perfect.

The other thing that concerns me in this debate is understanding the role of the 9.9 percent in this. There’s a tendency for members of the meritocratic class to say, “Oh, the problem is that we’re hoarding these spots. We’re hoarding spots at the elite universities and certain professions, and what we need to do is to make sure that we’re more representative in how we let people in.” Well, that’s really wonderful for people to do, but that is not going to be the solution to much of anything. It takes for granted that the hierarchy itself is justified and is economically productive, and it’s just a matter of making sure that everyone has a fair shot of getting in. Let’s say you have a society in which you have serfs and lords and you say you’re going to have a lottery where one out of every 100 serfs will become a lord every year, and every year or every generation you’ll rotate. That’s not going to make a just society, that’s going to make a perverse society. That’s a false line of solution.

So what is the role of the 9.9 percent in making this better?

The key contribution of the 9.9 percent, the culture of the 9.9 percent, is going to be to return to the actual original values of America’s upper-middle class. If you get rid of the false idea of meritocracy that everyone earns what they deserve and substitute the idea that meritocracy means holding power accountable to rational standards of public scrutiny, you have a class that can actively contribute in a positive way toward equality. There’s nothing more dangerous to inequality than a society where people and activities are held up to rational standards. There are some core values in what we call meritocracy — of holding power accountable to reason, of treating people as equals under the law, of making deliberations public, and professionalism. All of those core values are intrinsically good things. What’s happened is that inequality perverts and distorts them. The contribution of the 9.9 percent would be to pursue those.

I don’t think the answer is to put the 9.9 percent on a boat, send them out to sea, and sink it, though that would probably make for better sales on a book like this. But I do think the issue is basically a class that has allowed itself to delude itself about the sources of its own privilege, and its main contribution would be in opening its eyes and then living and working more in accordance with what I think was the original inspiration of the class.

What follows when people recognize the actual sources of their privilege is they become a little more humble and they are more willing to help other people, more willing to invest in the future. For me, one of the most distressing statistics is that the richer people get, the less they believe in publicly supported child care. It’s not that they don’t want their taxes to go to pay for child care, it’s that they’ve internalized this idea that everyone can do this, everyone can raise their own child or just hire a nanny. “Let them hire a nanny” is the new “let them eat cake.” It just shows how this incredibly virtuous, super-well-educated class becomes oblivious to the basis of its own existence.

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