
The Real Class War - arcanus
https://americanaffairsjournal.org/2019/11/the-real-class-war
======
tvanantwerp
I've spent my career working in public policy circles, and this rings true to
me.

> At most, working-class voters can cast their ballots for an “un­acceptable”
> candidate, but they can exercise no influence on policy formation or agency
> personnel, much less on governance areas that have been transferred to
> technocratic bodies.

> Unlike the work­ing class, the professional managerial class is still
> capable of, and re­quired for, wielding political power.

I've never seen actual grassroots activism accomplish much, if anything.
Protests in DC are like rain; bring an umbrella, but no need to pay it much
attention because it will blow over in no time. It's always insiders who make
a career out of policy that ultimately shape it. Hill staff, think tank wonks,
professional bureaucrats, etc--it's that professional Washingtonian class that
really shapes the government's policy, because they are the ones that show up
to do that work every day.

~~~
viburnum
Gay people can get married in America, which was completely unthinkable a
generation ago. 100% due to activists, many who risked their lives to make it
happen.

~~~
buboard
The gilettes jaunes are on the streets, nobody cares to make them cultural
icons. Gays had very visible and generally disproportionate (compared to
population) media coverage of their rights. Was it really 100% due to
activists on the street, or very influential but high profile gay people who
helped build one of the few successful rights movements of our times?

~~~
vanusa
_Was it really 100% due to activists on the street, or [high-profile
insiders]_

Okay, 90 percent activists on the street, 10 percent insiders (who generally
only stepped in after the 90 percent had already laid their bodies on the
tracks, and accomplished the hard part).

~~~
nwah1
Since we're all spouting bare assertions, I assert that it was 90% Frasier and
Ellen DeGeneres and 10% activists.

~~~
vanusa
_I assert that it was 90% Frasier and Ellen DeGeneres_

Who got into a Tardis and went back and organized the Stonewall riots, ACT UP
and the Mattachine Society. Yeah, OK.

------
roenxi
What a fantastic article; this might be the high point for my 2019 Hacker News
reading. What clarity of vision.

It is remarkable reflecting after an article like that on the complete
inability of the US political system to organise itself to reward work done
rather than access to the super-elite social circles. I'd love to know if this
Julius fellow has a take on what mechanisms the 0.1% are using to drive the
growing wage gap.

I already have an opinion; I just think if he has one it will be more
insightful.

~~~
kortilla
> political system to organise itself to reward work done

How do you decide which work is valuable and which work isn’t?

~~~
fladrif
Not OP, but my personal belief is that all work is valuable, otherwise it
wouldn't be desired. I don't think it's a good exercise to decide how much it
is worth, except to say that work that requires X unit of time should provide
at a minimum an amount of compensation that allows a person to obtain a
standard of living above the poverty line.

~~~
nine_k
In my book, work has _negative_ utility. It is something you _tolerate_ to get
the fruits of it, which may have positive utility. Being paid in exchange for
work is the sign that otherwise the work won't be worth doing for you.

The less work you do to achieve a desired result, the better. This is why
technical improvements are valuable: they allow you do less work.

There are activities that are rewarding by themselves, like playing games,
watching the sunset, or otherwise having leisure. You are not paid for that,
you sometimes pay for it yourself, and still it remains worth doing.

~~~
munificent
I fundamentally disagree with the separation of life into toil and leisure.
That mentality debases both acts. It implies that the more miserable our job
is, the greater the moral reward we have earned. And, conversely, our leisure
must be maximally hedonistic and selfish to make that suffering worthwhile.

All of our waking day is a mixture of good and bad experiences, intertwined
with all manner of internal and external rewards and punishments. A hobby is
just a job that pays you more in fun than cash, and a job is a weird club you
go to more than you want but that pays you dues in return.

Trying to separate them into strict binary options makes it hard to build a
complete, balanced life that has all of the various kinds of rewards that are
meaningful to you as an individual.

~~~
disqard
> A hobby is just a job that pays you more in fun than cash, and a job is a
> weird club you go to more than you want but that pays you dues in return.

That is beautifully expressed, and captures the non-dichotomous nature of
life. Well-put!

------
arkh
> Indeed the conspicuous embrace of “elite values” by journalists and
> academics is often little more than an aspi­rational attempt to remain
> connected to an economically distant elite—just as educated millennials’
> conspicuous consumption of “ex­periences” often serves as a necessary
> distraction from the grim reality that most will never be able to own a
> home.

> An entire “creative class” ideology was constructed to explain this
> phenomenon, but its intensity simply concealed the desperation of second-
> tier elites to assuage their status anxiety.

The author doesn't pull any punch sent the bourgeoisie way.

~~~
Daishiman
It's refreshing really.

~~~
WilliamEdward
Agreed. Although, on a website made by a company that funds the bourgeoisie,
i'd imagine most people here are frustrated.

~~~
sangnoir
> Although, on a website made by a company that funds the bourgeoisie

...in the hope that their venture,by some miracle, is the winning ticket to
join the elite - usually by being "blessed" by an elite via a 6- or
(preferbly) 9-figure acquisition

------
helen___keller
A cogent and well-written article.

My only possible contributions are the following:

1\. The author perhaps underestimates the bottom 90%, who are written off as
politically irrelevant (in terms of real power) near the start of the article.

I do think there's a good reason for this, but we are only one true crisis
away from that changing. For example, suppose India and Pakistan only were to
have a nuclear engagement and the outcome was a small global "winter" for a
few years from the dust and rubble kicked into the atmosphere. When crops and
supply chains fail and famine kicks in, who is going hungry?

That's about the point that true populist revolts happen.

2\. The author discusses at length the phenomenon of "the 10%" elites who
align themselves (in ideology) with the working class, perhaps blinded by not
realizing that they are actually trying to support their own interests.

But I think some underestimate how soon the developers and programmers of the
world will crater from "elite 10%/5%/1%" to something resembling median
salary.

This is my own opinion, but it's clear to me that the tech industry (and it's
associated venture capital scene) are in a state of irrational exuberance as
the capitalist class is convinced that tech startups (or the word "tech"
attached to non-tech startups) offers incredibly high ROI.

This paradigm will end as easy opportunities and low hanging fruit dry. Maybe
we're already there, but nobody has acknowledged it yet. When this happens
(and is widely recognized), venture capital will flee to safer vehicles.
Meanwhile, the big tech of the world will consolidate and cut costs to grow
shareholder value.

When this happens, we will all stop hopping jobs for 30% pay raises and
instead we will start hopping jobs (post-layoff) for 30% pay cuts. And this
will continue for decades.

~~~
malvosenior
Tech has always gone through boom and bust cycles. At the end of the day
though, it's really hard to write good software and we're only going to see
demand go up over time. There may be some bumps in the road, but there will
always be new opportunities. I think programmers are one of the only
professions _not_ at risk of automation or disruption as all of that is
powered by software which maybe 5%-10% of the population has the ability to
write and maintain.

~~~
slfnflctd
> software which maybe 5%-10% of the population has the ability to write and
> maintain

I sure hope you're right about this. I have no doubts on the rest of what you
said, but given enough incentives (both push and pull), there may be a lot
more latent ability out there than you think. Especially as the on-ramps from
raw talent to real productivity keep improving.

From my direct personal experience, I suspect there are a bunch of current
Uber and Lyft drivers who could definitely code if they had enough reasons to.
A lot of them have better social skills than your average coder, too.

~~~
malvosenior
I used to think most people had the ability to code but ~20 years of managing
development has made me reconsider. Most people just really can't deal very
well with abstraction and complexity (not to mention things like recursion). I
think a lot of people can write _some_ code, but it won't be good and it will
require someone more senior to extend, maintain and scale it. So basically the
more people who write code, the more in demand those top 10% of people with
natural coding ability will be.

------
TomMckenny
It makes sense that the top 10% to 2% become more active as blame and anger
are re-routed toward them. For example, many people think the "elite" are the
educated but not necessarily the wealthy. So for many, adjunct faculty are
called "elites" while the Koch brothers are not.

Likewise, discussions of wealth inequality are becoming conflated with income
inequality.

Yet the professional class has only marginal voting power and comparatively
little to contribute to political funding, so it's not surprising that the
astute ones are concerned.

~~~
StacyRoberts
The professional class has contributed the most to the wealth gap. We blame
the wealthy, but it's not they who are performing the task of wealth
extraction. The banks owners don't sign mortgages or repossess homes. The
shareholders aren't doing the actual labor that increases page views or
patents doodads worth negative value to the poor who buy them and funnel the
money up. Owners don't do the taxes that rob society of its own worth.

No. It's the professionals who do that immoral work. _They_ are to blame. Not
the wealthy. They just pay for it.

The professionals, most all of us here are the cause of the wealth gap. It is
we who exacerbate the divide and decline of civilization by sacrificing our
moral duty to those less fortunate to get a little more cash for ourselves.

Listen to us all here now. We know this, yet we continue.

~~~
closeparen
Work widens inequality whether or not it’s extractive. Any time you’re
creating value, someone else is not, and the difference between the two of you
grows.

~~~
StacyRoberts
That's not true. We can both be better if I work for you and you pay me right.
It's not a negative sum game and can be positive and equal value for both. The
value of your cash to me and my product for you.

~~~
closeparen
Someone off to the side who did not participate in that exchange benefits from
it less than you and I did.

~~~
StacyRoberts
I see your point. I still disagree and have more counterpoints. I also don't
appreciate that perspective, nor do I believe I'll change your opinion on it,
so I'll stop here.

------
tranced
Recently, I have a friend group who all graduated from Stanford, with
relatively upper middle class(but not suburb/NY upper middle class) roots, and
you might even describe as "woke" who belonged to a fb messenger group called
"Anti Asian Asian Group".

I felt like I had to call them out on it. Though they made the group as a play
on "anti social social club" and to counter conservative sentiments their
upper class counterparts might've had, I too thought it might've just been
punching down on working/middle class Asians who had traditional values and
almost can't help but have those values.

I guess that's the real class war; when people punch down on those who almost
don't have the opportunity to decide who to become. Not that people completely
lack agency in this country but I think a lot of people forget how much your
environment can shape individuals and their values.

~~~
neonate
> those who almost don't have the opportunity to decide who to become

That's an interesting phrase. Can you say what you mean by it?

~~~
barry-cotter
It’s a reference to the sociological concept of marked versus unmarked
identities. If you think of an American you probably think first of a white
man of Christian heritage. If you think of a Chinese person you picture
someone of Han ethnicity, not Miao or Manchu. If you think of a nurse you
picture a woman. All of the people who fit that identity but are different
from the unmarked version are marked by their difference from the unmarked
version that springs to mind unbidden when the concept is named.

------
SchoolboyBlue
> The company I now work for started as a parking app. . . . We were growing
> sustainably as the result of having a superior product based on a great
> understanding of consumer needs.

> But sustainable growth isn’t what VCs (or the execs that they install in the
> firms they have stakes in) are looking for. So we pivoted.

> Without going into too much detail, we are now exclusively focused on
> getting acquired by a big tech firm. Meetings with low-level product
> managers at a few of the world’s largest com­panies dictate every decision
> about which projects we pursue. We’re no longer building a company. We’re
> not even building a product. We’re building a feature that we hope will end
> up getting included in an app owned by a mega-corporation.

> When I talk to my friends and peers at other tech startups, they tell me
> that it’s pretty much the same story at their compa­nies. Everyone is
> building to the specifications set by Google or Amazon or Apple. This
> “competitive” industry, supposedly a shining example of the power of the
> free market, is really just a massive risk-free R&D department for the faang
> companies.40

ooph.

~~~
Aperocky
As someone who works at those very companies, I have to say that the code
itself isn’t worth that much - everything that’s not a utility package will
definitely get rebuilt. Nor is the idea, the only value proposition is
existing customers and potential patents for software startups.

------
kingkawn
I disagree that the working class is not going to radicalize itself. They too
are out here on the internet, talking to each other and culturally evolving at
an unprecedented rate, like everyone else. For the first time they have the
power to publish and think in public uncoupled from professional barrier.
Better believe it’s being used, and that they will assert their awareness.

~~~
larnmar
The election of Donald Trump could be seen as the result of the radicalisation
of the working class.

~~~
joeblubaugh
Trump voters are on average wealthier than Clinton voters:
[https://www.washingtonpost.com/news/monkey-
cage/wp/2017/06/0...](https://www.washingtonpost.com/news/monkey-
cage/wp/2017/06/05/its-time-to-bust-the-myth-most-trump-voters-were-not-
working-class/?outputType=amp)

~~~
war1025
I would guess (completely based on personal experience) that most in the
service class voted for Clinton, while working class is more centered around
manufacturing, which does pay better than the service industry.

A big part of the issue is that people have different definitions for all the
various social classes, so it's hard to compare things correctly.

------
tc
George Orwell covered this basic point in `1984` (published in 1949):

> The aims of these three groups are entirely irreconcilable. The aim of the
> High is to remain where they are. The aim of the Middle is to change places
> with the High. The aim of the Low, when they have an aim -- for it is an
> abiding characteristic of the Low that they are too much crushed by drudgery
> to be more than intermittently conscious of anything outside their daily
> lives -- is to abolish all distinctions and create a society in which all
> men shall be equal. Thus throughout history a struggle which is the same in
> its main outlines recurs over and over again. For long periods the High seem
> to be securely in power, but sooner or later there always comes a moment
> when they lose either their belief in themselves or their capacity to govern
> efficiently, or both. They are then overthrown by the Middle, who enlist the
> Low on their side by pretending to them that they are fighting for liberty
> and justice. As soon as they have reached their objective, the Middle thrust
> the Low back into their old position of servitude, and themselves become the
> High. Presently a new Middle group splits off from one of the other groups,
> or from both of them, and the struggle begins over again.

~~~
kazagistar
So the idea behind this is what? That you shouldn't trust the revolutionaries
because they dont have your interests in mind? That its hopeless? This model
of the world is just run of the mill statusquoism trying to make people too
despondent to tear down hierarchy, not some deep truth.

To be honest I dont know if Orwell agreed with the position of the high or
not, but the fact people repeat this propaganda of the "high" from 1984 is
absurd.

~~~
dang
Orwell's biography is so famous that we can guess the basics of how he would
answer this: revolutionaries don't necessarily have your interests in mind;
it's not hopeless; oppose the status quo; don't be blinded by ideology; be
honest before being political.

~~~
kaycebasques
Which biography are you referring to? I’m seeing a few. I didn’t know it was
famous and never thought to check, but would definitely like to read now that
you mention it.

P.S. it’s always a treat to stumble on a non-moderator comment from dang

~~~
dang
Oh, by biography I just meant his life story. I didn't have a specific book in
mind.

Orwell is famous for having been early to break with political allies whose
tactics he abhorred, even though they were fighting for his side. He had a
genius for intellectual honesty, which made his writing exceptionally clear.
If there's a clearer writer in English I wonder who it is.

------
paulus_magnus2
The resentment of big capital is not entirely without a reason. Most money
right now is "passively" deployed into pre-existing securities. This means
it's used to extract existing value by market cornering / scarcity generation
/ rent seeking / monopolies / oliglopolies.

On the other side there is new value / securities creation. This is what
people like Elon Musk are doing. He took circa $50mln of his own money, added
a couple of billion from investors. Added 1000 highly skilled jobs and result
is $50bn company.

Extractive capital alocation is offering much easier profits, but jobs working
it are mostly the "bullshit" type.

As a democracy we have control of the laws, we can "nudge" the big capital
away from rent seeking into new value creation by changing the tax code.

~~~
hikarudo
How exactly does money "passively" deployed into pre-existing securities
become "extractive"?

If I invest some money in a passive index fund, what does that have to do with
market cornering / scarcity generation / etc?

What are "non-extractive" ways of investing money, aside from starting new
companies?

~~~
ak217
It's extractive to the extent the economy at large is extractive. Your index
fund invests indiscriminately in profit-seeking enterprises proportionately to
their size. A lot of profit-making economic activity is dependent on things
like cornering a market for trucks through the chicken tax, scarcity
generation in housing through restrictive zoning, etc. etc. - government
regulations which, for better or for worse, interfere with the "free market".

Want to invest non-extractively? Invest in companies that you truly believe
provide value without explicitly engaging in such activities. Most index
investing is incompatible with such a thesis. Some index funds try, for
example VFTAX.

------
woodpanel
The whole talk is worth watching, but I'll just point to Lionel Shriver's
segment, where she beautifully sums up, what most people – especially in the
underclass – know already:
[https://youtu.be/ddBKQIomyYI?t=2200](https://youtu.be/ddBKQIomyYI?t=2200)

Today's western progressivism is taken hostage by the elite.

Disturbing as it is for itself, it is even more freightening what this might
lead to. What happens if the bottom 50% effectively looses any political say,
because their choices by whom to be represented become completely blurred. If
you are like me and considered to yourself to be under-/working class, none of
today's "leftist" ballot options are even remotely relatable, the more radical
their representatives are, the more they reak of privilege.

~~~
TurkishPoptart
You can see this beginning in roughly 2011 when the Occupy Wallstreet protests
start to fracture. This was when Starbucks began advocating for anti-racist
policy (why? they make money selling permutations of coffee and milk) and a
bunch of other corporations chimed in. The 99% movement quickly splintered off
into anti-racist memes and whirled into Third Wave Feminism + needs for
"inclusion" and "intersectionality" and whatever terms the Wallstreet-backed
Left felt best to appease the working poor and working lower-middle class of
academics and journalists (who are basically working poor now, but would not
like to admit it).

So when you say: >Today's western progressivism is taken hostage by the elite.

I agree. In fact, there is likely evidence that it was manufactured by the
elite. This discussion is heading to the territory of
Hypernormalisation[[https://www.youtube.com/watch?v=yS_c2qqA-6Y](https://www.youtube.com/watch?v=yS_c2qqA-6Y)],
a film I recommend.

------
tjpnz
>Since at least 2016, the divide between the “working class” and the “elite”
has been considered a defining issue in American (and Western) politics.

I watch a bit of US news (CNN et cetera) when travelling and almost _never_
hear it defined in those terms. Based on what I've seen the debate is almost
entirely framed in terms of the "middle class" and the elites.

~~~
frockington1
In America the middle class defines almost everybody. Nobody want to be "upper
class" because then you'll be the target of envy, and nobody wants to be
"lower class" because of insecurity. For Americans, the phrase "upper middle
class" means "Upper class but not multi million house"

------
shevek_
From 2018-2019, we saw teachers protests and strikes lead to massive
concessions being gained in 7/9 states they occurred in, most of which were
red states. The working class has a considerable amount of power when wielded
correctly.

[https://en.wikipedia.org/wiki/2018%E2%80%9319_education_work...](https://en.wikipedia.org/wiki/2018%E2%80%9319_education_workers%27_strikes_in_the_United_States)

Eric Blanc's Red State Revolt is another great source on this

[https://www.versobooks.com/books/2955-red-state-
revolt](https://www.versobooks.com/books/2955-red-state-revolt)

~~~
api
As it stands any broad based working class revolt in the US can be effectively
nullified by bringing up a culture war issue like abortion, homosexuality,
etc. and using it to split the electorate. This has been true for a long time.
These issues evoke emotional responses that easily override any rational
concern for one's economic well being.

Whether intentional or not, the culture war continues to be the most effective
tool in history for sidelining and fragmenting any struggle for economic
equality. This is because culture war issues do not slice the electorate along
the same lines as economic issues.

~~~
blacksqr
HN 2019: downvoted for noting plainly observable phenomenon.

~~~
dang
Please don't break the site guidelines by posting like this.

Vote totals fluctuate. When users see an unfairly downvoted comment, they
often give corrective upvotes. Then the comment goes back to positive, but a
post like yours here lingers on, orphaned and inaccurate.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
raldi
Clickbait antidote:

 _The real class war is between the 0.1 percent and (at most) the 10
percent—or, more precisely, between elites primarily dependent on capital
gains and those primarily dependent on profes­sional labor._

~~~
buboard
I d say take the bait because the article is brilliant

------
xwowsersx
> But it is precisely for these reasons that the working class is unlikely to
> be decisive in shaping politics for the foreseeable future. However one
> defines the working class, it has scarcely any political agency in the
> current system and no apparent means for acquiring any. At most, working-
> class voters can cast their ballots for an “un­acceptable” candidate, but
> they can exercise no influence on policy formation or agency personnel, much
> less on governance areas that have been transferred to technocratic bodies.

What's the basis for this sweeping claim?

~~~
helen___keller
While I don't really agree with the author on this point, I think the basis of
the claim is implied to be the election of Trump. Trump prevailing in the
primary (and the general even) could be seen as a referendum of the working
class on establishment politics.

And yet, what has changed? Trump hasn't brought back American industry as
promised, nor has he made a trillion dollars infrastructure package as
promised. He has succeeded in a tax plan (approved by establishment
Republicans in the Senate), supreme Court picks (approved), etc.

The authors argument would be that this illustrates that picking the
occasional anti establishment candidate doesn't uproot necessary structural
change which happens across a large number of both elected and nonelected
organizations, and well-connected elites are implied to be the only ones in a
position to affect such change.

~~~
jeegsy
> occasional anti establishment candidate doesn't uproot necessary structural
> change

The anti-establishment is the bare minimum for structural change to happen.
The difficulties that Obama and now Trump have faced in bring change (whatever
their version of it), actually make the point more strongly that we need even
more out of the box thinking in our leadership.

~~~
anongraddebt
Underrated comment. This is deeply true, but points to something ominous.
There isn't really a way that this political vortex ends except through ever
more extreme policies/pendulum swings.

------
spyckie2
> This [billionaire] class has no idea what to do with its wealth, much less
> the power that results from it. It can only withdraw and extract, socially
> and economically, while the political justifications for its existence melt
> away.

Would love to hear his perspective on Bill Gates.

It's very interesting to think about this because most people pursue wealth
for this very reason - to be freed from constraints of responsibility and to
do whatever they want.

However, it seems to be the opposite once you get too much wealth - you all of
a sudden become (due to the closed economic and political system) extremely
publically responsible.

This is also the first generation of such public billionaires in an era where
everyone with power has their lives projected on a live screen for people to
see.

~~~
Discombulator
Bill Gates is in my view deserving of every praise for his civic engagement,
as well as a few others (e.g., those who have agreed to the pledge to give
away much of their wealth). But I don’t think this is common. Just from the
public statements of many billionaires, it seems that many do not think they
have any civic obbligation at all.

~~~
spyckie2
It's why I'm curious to see his opinions on this matter.

The author pointed out the problem but didn't say much about the solution. I
was wondering if his discourse on those who aren't the problem would yield
insights.

------
lbacaj
Reading this thing is an incredible downer and it makes everything sound black
and white. It is literally poo-pooing on everything. Life is never this black
and white, although the thesis make for a good read it is still an inaccurate
model of the real world.

> Moreover, increasing numbers of engineers, even at the most prestigious
> companies, are hired on temporary contracts. When the artificial growth
> model stalls, employees can expect mass layoffs, “anti-hierarchy” propaganda
> not­withstanding.

As an example, I dont find this to be true at all especially for great
engineers. Our company is trying to move completely away from contractors.

~~~
ridewinter
This article is what Karl Popper would call historicism — the idea that
history has fixed laws or trends that inevitably lead to certain outcomes.

Here's an article on why he considered it false and even dangerous:
[https://fs.blog/2016/03/karl-popper-mistake-of-
historicism/](https://fs.blog/2016/03/karl-popper-mistake-of-historicism/)

------
neonate
I read it, though not closely, and am still unclear what is the "real class
war". The educated-but-alienated professional elite against the oligarchs? I'm
just guessing.

Also, he kind of loses it in the final paragraphs, which weakened my
impression of the rest.

~~~
nl
>I read it, though not closely, and am still unclear what is the "real class
war"

 _The real class war is between the 0.1 percent and (at most) the 10
percent—or, more precisely, between elites primarily dependent on capital
gains and those primarily dependent on profes­sional labor._

It's pretty clearly defined.

It's the group that makes their money primarily from investment returns vs
those who make their money primarily from wages/salaries/payments for skills.

~~~
neonate
Ok, so I guessed right. Thanks, I missed that bit.

------
dragonwriter
> However one defines the working class, it has scarcely any political agency
> in the current system and no apparent means for acquiring any.

Revolutions don't happen when people feel that they have political agency in
the status quo system. And if people don't have actual agency, the outlets
which provide the illusion of agency eventually fail.

~~~
AnimalMuppet
That is my fear as well. I would say that the _conventional_ outlets that
provide the illusion of agency have in fact failed. That's why we got the rise
of both Trump and Bernie. When people realize that _neither_ unconventional
approach gives them real political agency, look out.

------
excursionist
> But the Valley has never been particularly fertile for the salaried
> professionals and “engineers” hired by these companies, who even now
> generally make less than their counterparts on Wall Street or in Big Law.
> Kindergarten playroom office spaces and other exag­gerated perks often serve
> to distract employees from this harsh reali­ty.

lol

~~~
Infinitesimus
It's always a bit funny and sad when statements like these happen. Most people
seem to have _no_ idea how much money Engineers/Product Managers can make at
certain companies.

~~~
yifanl
Seems like the author knows exactly how much they can make, he states that the
median income is 81k/yr.

Now you could argue that that's deliberately missing the long tail nature of
this, but if anything, the theme of outliers of the industry just reinforces
the point.

~~~
ahaferburg
That was the median for the entire US, not just the valley.

------
singularity2001
What is often forgotten is the hyperdeflation of technology. All your gadges
would be worth many millions in pre 2000 dollars. Your car is probably better
in many ways than a million dollar car from 1980.

~~~
polytely
Everything is way more accessible than pre-2000's, but I would argue that the
overall quality of the user-experience is probably worse. If you buy a TV
today, you get amazing image quality, but you also have to live with the fact
that the TV spies on you and that the software it runs on will discontinue in
5 years. (this of course doesn't matter because it's been designed to break
before that point). I would gladly take an old CRT over a modern smart-tv.

~~~
ryan93
No you wouldn’t take CRT.

------
cryptica
> Many industry observ­ers believe Schmidt contributed virtually nothing to
> the company, but he became a billionaire because of his superior grasp of
> business etiquette: “Google policy is to get right up to the creepy line and
> not cross it,” he once said. Jeffrey Epstein, erstwhile dinner companion of
> Schmidt, Bill Gates, and seemingly every other member of this class, had a
> slightly different policy.

Funny. Obviously this is going overboard with the facts but it makes a good
point.

------
hnuser77
>"Indeed the conspicuous embrace of 'elite values' by journalists and
academics is often little more than an aspi­rational attempt to remain
connected to an economically distant elite...they gave professionals greater
scope to manage “postmaterial' concerns that suited their cultural
sensibilities..."

In other words, this potential class war is pacified by telling the upper-
middle class that they are culturally superior in spite of their increasing
economic precarity. Someone in this class who has to take out massive loans,
move across the country, and spend $30,000 a year on rent with no hope of ever
owning a home in order to have an insecure job in their field must be assured
that living this way, combined with a mix of vague cultural markers, is
tasteful and elite, and not an empty bag. There may also be a variety of well-
funded social movements that pose zero threat to the economic position of the
0.1% to participate in as an activist.

------
jajag
Related article in the same issue:
[https://americanaffairsjournal.org/2019/11/americas-drift-
to...](https://americanaffairsjournal.org/2019/11/americas-drift-toward-
feudalism/)

------
clairity
> "What is remarkable about today’s oligarchy is not its ruthlessness but its
> pettiness and purposelessness."

yup. the 0.1% is really good at hoarding capital, but to what end? none,
apparently.

a startlingly coherent summary and critique of the many socioeconomic ills
that we tend to discuss opportunistically here.

we non-0.1-percenters need to hone in on undoing the systemic changes since
the 70's that has led to this gross and aimless inequity.

~~~
mdorazio
Honestly, this is what gets me. Say what you will about the man, but few
people complain that Elon Musk is a billionaire because clearly he's
repeatedly investing his wealth in actually trying to advance humanity in
meaningful ways. Similar story with Bill Gates and his foundation. But wtf is
the average billionaire (of which there are thousands) or hundred-millionaire
(of which there are tens of thousands) doing with their money aside from
trying to acquire more money? You would think such people would be into
building a positive legacy, but it's just not happening that way.

~~~
chii
Or they are just quietly building businesses, rather than make flashy
headlines.

You don't need to "advance humanity" \- just creating a service or product to
satisfy since other human's needs is a good enough goal.

~~~
TheOtherHobbes
Advancing humanity should be a requirement for access to that kind of money.

It's a hugely privileged position to be in, and the idea that it comes with
exactly zero responsibility to Rest of World is nonsensical.

~~~
kortilla
Why? The service and/or product provided by their business is providing
significant value to society (lest they wouldn’t be collecting profit). Is the
reward for creating a successful business really more responsibility to just
give back instead of using it to create more business?

~~~
pjc50
> The service and/or product provided by their business is providing
> significant value to society (lest they wouldn’t be collecting profit).

This is assuming the conclusion.

They could just be collecting a monopoly rent or a land-rent or an IP rent;
for example, when Martin Shkreli raised the price of insulin dramatically he
wasn't "providing more value to society", he was _extracting_ that value,
potentially at the cost of human lives.

[https://arstechnica.com/tech-policy/2018/07/shkrelis-
former-...](https://arstechnica.com/tech-policy/2018/07/shkrelis-former-
company-is-now-losing-money-even-with-the-5000-price-hike/)

~~~
chii
There's a lot of confounding issues here in relation to the insulin problem:
the fact that medical patents are poorly structured - insulin is hard to make,
and making it via a biological mechanism means the "molecule" is slightly
different, and so the FDA needs time and money to assess it. This creates a
defacto monopoly, and thus, said monopoly can raise their prices.

The fix isn't to force billionaires to give out their wealth for free - but
instead to fix monopoly laws, as well as to stream line the way approvals can
be made for generic molecules made via biological means (like the way generic
drugs are today).

In fact, an insulin factory _should_ be easy for a billionaire to fund and if
the relevant regulations are better, there'd be more insulin sellers as
there's profit to be made (seeing as Shkreli has raised the price).

~~~
jacobush
This close to the money, there's no distinction between what you are proposing
(fixing the monopoly laws) and force billionaires to do something. Currently,
the companies write the laws. You want to force them to stop writing the laws.

~~~
kortilla
> there's no distinction between what you are proposing (fixing the monopoly
> laws) and force billionaires to do something

Of course there is. One is punitive and accomplishes no long term positive
effects. The other encourages competition and subsequently innovation.

------
pjc50
Well this pulls no punches:

> Conservative donor gatherings are somehow even more pathetic. Most of the
> attendees are there only because they are not smart enough to recognize that
> the Democratic Party offers a far more effective reputation laundering
> service. The rest are probably too senile to know where they are at all.
> There is often a special irony to these events: an uninspiring ideologue is
> usually on hand to repeat a decades-old speech decrying Communism—recounting
> the horrors experienced in countries ruled by a self-dealing, incompetent
> nomen­klatura and marked by a decaying industrial base, crumbling
> infrastructure, poor education system, a demoralized populace, low
> confi­dence in public institutions, falling life expectancy, repeated
> foreign policy failures, a vast and arbitrary carceral system, constant
> surveillance, and even massive power outages in major cities. Imagine that.

~~~
AnimalMuppet
The last several screenfuls all all a very bitter rant. I find it hard to take
seriously something written like this.

~~~
isthispermanent
It does get a little screechy during the last 500-1000 words. First section is
on point though.

------
flipgimble
I found it informative to research the author and his background:
[https://en.m.wikipedia.org/wiki/Julius_Krein](https://en.m.wikipedia.org/wiki/Julius_Krein)

For some reason my mental image of the messenger behind the article was that
of a well studied and neutral academic throwing out firehouse citations.

his points are thought provoking, but it reduces everything to purely economic
competition by a delusional population with only the author to cut through the
illusions.

~~~
silexia
His article shows why we need a wealth tax instead of an income tax... There
is a huge difference between a hard working manager making $100k and an
equally hard working owner with $10m in assets. I suggest dropping the income
tax entirely, and tax wealth under $50k at 0%, $50k - $1m at 1%, $1m - 10m at
2%, $10m - $100m at 3%, $100m - $1b at 4%, and everything higher at 5%. This
keeps even billionaires motivated to work hard to earn returns on their
assets, without taking from the little guy who can't afford it.

~~~
friendelschudel
I keep hearing this idea from a variety of sources recently, and the idea is
so absurd I don't even understand how it came to be. How, exactly, do you
expect the government to tally the amount of wealth to be taxed for each
person in the country? The amount of bureaucracy and auditing and enforcement
it would require would dwarf the insurance industry, and waste taxpayer
dollars to the extent that it couldn't actually be profitable for the
government.

~~~
dragonwriter
> How, exactly, do you expect the government to tally the amount of wealth to
> be taxed for each person in the country?

Ask and audit, the same way it does income. Of course, it's harder to get
filed confirmation data for wealth and even easier to have an alternative
valuation for wealth held in non-cash assets than for realized income, so it
will be _much_ easier to evade, but that's probably part of why it (which
complicates our overall system of taxation) rather than taxing the currently
tax-favored income of the rich, primarily capital gains, at the same rate as
other income (which would simplify the tax system) is favored by people whose
concern is to be _seen as_ doing something about tax fairness.

~~~
friendelschudel
I think by "easier to evade" you actually mean "impossible to enforce". The
sorts of things the wealthy store their money in aren't easy or even possible
to value, especially on some yearly basis.

------
candybar
This is a great article but I think it misses the counterpart to the
professional class - moderately well-to-do small-business owners, millionaire
next door types. I think these are heavily represented in the top 10%. They
are not as well-educated, lean much more to the right than the professional
class. Economically they identify more with the 0.1% and consider themselves
capitalists, but culturally they identify more with the working class.

These two groups seem diametrically opposed to each other, much more so that
they are with the actual elite or with the actual working class.

------
aazaa
> But it is precisely for these reasons that the working class is unlikely to
> be decisive in shaping politics for the foreseeable future. ...

This seems like an odd statement given that the American system of government
was designed from its inception to insulate the ruling elites from the masses.
The founders were terrified of mob rule. The term "democracy" was used at the
time to mean something not far away from "mob rule."

The people don't directly elect the president, the Electoral College does
that. The people don't vote on any pending legislation. The House and Senate
do that. The people don't set foreign policy - the executive and legislative
branches do that. The people don't strike down any legislation - the courts do
that, members of which at the top level are appointed for life. The full
legislature is never up for re-election specifically to prevent a popular
uprising.

One wonders what the article has in mind here. The answer comes shortly:

> ... In countries like France, the working class might still be able to veto
> certain policies through public demonstrations, but such actions seem
> unlikely in the United States, and even the most heroic efforts of this kind
> show little prospect of achieving systemic reforms.

Even in France, that's an extra-governmental action. There's no mechanism to
include popular dissent except for routinely scheduled elections in either
France or the US.

What's more troubling though is the ubiquitous disengagement from the parts of
American government through which people can effect (small) changes:

\- jury duty

\- elections

------
JDiculous
> At most, working-class voters can cast their ballots for an “un­acceptable”
> candidate, but they can exercise no influence on policy formation or agency
> personnel, much less on governance areas that have been transferred to
> technocratic bodies.

The problem here is that we don't have direct democracy. I've noticed that
citizens in countries with direct democracy elements like Switzerland seem to
feel significantly better represented by their governments.

It blows my mind how little is spoken about direct democracy and concepts like
delogative/liquid democracy. There's absolutely no reason we must confine
ourselves to a representative democracy conceived in a time when direct
democracy was literally impossible because messages were delivered on
horseback.

------
nnvvhh
From Zinn's A People's History of the United States: "One percent of the
nation owns a third of the wealth. The rest of the wealth is distributed in
such a way as to turn those in the 99 percent against one another: small
property owners against the propertyless, black against white, native-born
against foreign-born, intellectuals and professionals against the uneducated
and unskilled. These groups have resented one another and warred against one
another with such vehemence and violence as to obscure their common position
as sharers of leftovers in a very wealthy country."

------
gddvhy
Great article. Regarding the wealth accumulation, there is an interesting
parallel with black holes: a single blob of wealth absorbs other wealth at the
exponential rate: dw/dt=k*w, where k is the population growth dp/dt. The same
blob of wealth has a Hawking radiation that evaporates this wealth, but at a
constant rate: dw/dt=-e, where e is expenses to support ones lifestyle. Big
blobs of wealth have about the same rate of evaporation, but absorb
surrounding wealth much faster. Add to that the constraint: the total wealth
is fixed and generally grows with the population size. In practice, all the
small wealth bubbles (workers) evaporate quickly and the radiation gets
absorbed by the big black holes. Eventually they become too big for this
planet and collide: US vs China. This boom cycle of the wealth bubbles
universe is always followed by the bust cycle: a war. The big bubbles explode
and firm many small bubbles, that evaporate and so on. Nothing new here. In
the black holes world, the force distributing the matter is gravity. In our
world of wealth bubbles, this force is called greed. It is the driving force
of the boom and bust cycle. Greed is one the few fundamental imperfections of
the human mind and it takes eons fir the human mind to change. The previous
driving force was cruelty, and it still is in some places. The next driving
force will be

------
untangle
> The real class war is between the 0.1 percent and (at most) the 10
> percent—or, more precisely, between elites primarily dependent on capital
> gains and those primarily dependent on profes­sional labor.

There is a sharp contrast here, but I don't think it'll be the basis for a war
– figuratively or otherwise. But this divide deserves more illumination.

------
monkeydreams
I would like to further understand the societal, political and economic forces
in the context of the political outcomes described in this article. Has anyone
got a couple of recommendations on where to start?

~~~
Invictus0
I was discussing this article with a friend and he recommended Paul Tucker's
book Unelected Power.

------
stebann
A well-written article about politics in US and its class conflict. I still
think and insists that US citizens don't look enough to the rest of the world.
Just observe what happened to South-America since 2000's. Popular Revolution
and Popular Governments was the way out of the capitalist-neoliberal crisis,
at the time when global "promises" were being risen by the elites. The
struggle had its positives results because even when the dictatorships,
imposed by Washington, tried to drown the working class and the professional
class, they couldn't kill inequalities and the political structure that
generated that inequalities. Those measures (dictatorships) were brought for
preserving those inequalities and that structure. Now South-America is
entering into a new crisis, the elite's reaction to the conquests for the
People.

US needs new leaders, grassroots political leaders. Many people believe that
"change" comes from upper classes, but that happens when class struggle is in
the stagnant state, when the conditions are uncertain for the majority.
Building a new leadership and activism style for the affected classes will
effectively replace the excuses and the fear, that Fear that was imposed by
the elites.

------
anigbrowl
Theorists of capitalism long argued that it and it alone could efficiently
distribute resources across an economy (though not, oddly, within a firm).

This might be true in an economy whose rules about contrantracts, commerce,
and property relations were fixed and predictable, but most economic
simulations overlook or sidestep the fact that the most powerful economic
incumbents can and do adjust the legal conditions to maximize their own gain.

~~~
Synaesthesia
Adam Smith had recognised that in “Wealth of Nations”.

He goes on to conclude that “the mercantile system” allows the “merchants and
manufacturers” to pervert legislation towards their “sole end and purpose” –
production for profit – and away from the legitimate “sole end and purpose” of
production – to satisfy human needs.

He also points out that the interests of these manufacturers, have been
“peculiarly attended to” by the government.

------
plutonorm
This is one of the best pieces I have ever read. Absolutely brilliant.

------
Ericson2314
This is the article of it's sort I've ever read since...?

UBI now, please

------
dlkf
Most places with high per-capita GDP (Canada, Scandinavia, England, Germany
etc) have found that they can make meaningful, consistent, incremental
progress on a lot of the problems Krein is trying to address through
introducing a public system in sectors like healthcare, education, and child
care - probably literally the only tack Krein would never agree to.

The problem isn't "billionaires" or "capitalism." I would probably rather
billionaires lock up their money in Vangaurd stock - where its allocation is
at least beholden to market forces - than spent it on misguided vanity
projects.

The problem is that market failure is a real thing. Every other country on the
planet seems to have realized this.

~~~
gpanders
> The problem is that market failure is a real thing

At least two of the examples you site (healthcare and education) are nowhere
near being functional markets, so blaming market failure for poor outcomes in
these sectors seems like a red herring.

------
tristor
This article is interesting, partly due to the blatant political biases which
are present but unrevealed, and partly due to the attempt to address those
biases in closing segments. This line in particular was telling "the state—the
only way to address the most important issues of the present".

The author of this piece is a left-wing statist, and they interpret all of the
data they reference through this lens. That does not mean that their
conclusions are wrong in whole, as there's definitely some intriguing things
in this article. Their ending statements are relatively on-point and don't
align with any particular political leaning.

A good read, but unfortunately didn't tell me anything I didn't already know
just from watching the news and paying attention.

Perhaps the most disappointing fact is that the author hinted at but failed to
make the correct mental leap. This change in our society and economy is
largely a result of globalism. Those in the top elites were able to improve
their personal margins at the expense of the rest of the population by moving
both production and knowledge work outside the bounds of the US, and in so
doing increase the divide. The interaction of state-backed industrial
interests in other countries and the anointing of new billionaires at their
behest is not to be overlooked either.

I don't see any immediate solutions, as anything direct action will result in
chaos, and anything taken slowly will not produce a positive effect in my
lifetime. Like many other people in the professional class, my focus is on my
own self-reliance and ensuring that I am not beholden to society any more than
I must.

~~~
Miner49er
> The author of this piece is a left-wing statist

How familiar are you with the author's work? I'm not familiar with it, but
Wikipedia says they are a conservative and former Trump supporter.

Most people seem to consider American Affairs a conservative journal, and the
author is its editor.

~~~
tristor
Maybe I overstated my case, then. I am not familiar with the author beyond
this piece. This piece, though, shows a very deep disdain for anyone who could
be considered conservative and blatantly makes the case for statism. So,
perhaps they are not left-wing, merely a statist.

I tend to think there are more than one way to skin a cat, and statism is not
automatically the correct answer. Their direct statements disagree.

~~~
look_lookatme
Author is saying that the state is where opportunity is best found at the
moment due to all the reasons laid out in the article, which is quite good.
It’s not a value judgement, just an observation.

------
edisonjoao
so many type's of war ""

------
simonh
This is all driven by globalisation, and don't get me wrong I'm a globalist,
but this is just a fact. First manual labour in manufacturing was outsourced
abroad, then higher tier tech jobs in software and product engineering. Now
big firms from former third world countries are muscling in on markets at
every level of the economy, creating competition at every level of business.

You can't add hundreds of millions of Chinese people to the global work force,
now at every level of the global economy, without affecting the market for
that labour.

I said I'm a globalist, yes I am. My wife is Chinese, I've been going there
regularly since 2001. When I first went private car ownership was near unheard
of. It's a different country now, near-empty streets with a few donkey drawn
carts are now choked with commuter traffic.

The result has been a pause in income growth in the western world. We've
benefited from cheap imported goods, but lost out in domestic growth. The
upside is that hundreds of millions of people, not just in China but in plenty
of other places too, have been elevated out of poverty. I've seen that for
myself and it's done an incalculable amount of good, it's just that all the
benefits haven't been evenly distributed.

Could we in the west have benefited more if we'd had less globalisation? I
really don't know. We have benefited I think, and we've had opportunities to
invest and sell into those markets we wouldn't have otherwise had. I don't
know, it's hard to evaluate what could have been as it's such a radically
different shape for the world economy. Maybe we'd have ended up even worse
off, who knows? But we might have been better off, I can't deny it.

For the future, we can already see incomes in China have shot up. Low level
manufacturing jobs are moving out of China, because Chinese labourers have
more skills now and can command high enough wages in more upmarket jobs that
they don't need the low end work any more. I suspect that's why the employment
rate in the US and elsewhere, at the bottom end of the economy, is picking up.
I hope that continues, and in future growth will be more balanced across the
economic and wage spectrum.

~~~
danaris
> The result has been a pause in income growth in the western world. We've
> benefited from cheap imported goods, but lost out in domestic growth.

Except that's not true. There's been growth; it's just all gone to the very
wealthy in the West.

~~~
giggles_giggles
> There's been growth; it's just all gone to the very wealthy in the West.

Wrong. According to ourworldindata.org the world population in extreme poverty
fell by half since 1990. I'm sure there are other sources to match this data
as well.

But that doesn't fit your narrative.

~~~
macintux
You misinterpreted the grammar.

"In the West, it's just all gone to the very wealthy" is the intent. Not "All
the growth in the world has gone to the wealthy in the West."

~~~
giggles_giggles
"In the West, it's just all gone to the very wealthy" is also a claim that is
broad, hard to define, and is empty without evidence.

Of course those who pay attention to these sorts of things know that the
reality is more complex than that, even if you limit your analysis to "The
West," which isn't a unified bloc. See the differences exhibited by the change
in income inequality by these nations:
[https://ourworldindata.org/uploads/2018/07/Top-
Incomes.png](https://ourworldindata.org/uploads/2018/07/Top-Incomes.png) . You
can't make a generalized statement about "wealth in the West," because it has
exhibited different patterns in different countries over different timeframes.
You have to specify all of those parameters before an intelligent conversation
can even be started.

Even if the grandparent was worded too vaguely to communicate the poster's
actual point, the grandparent turned out to be making a statement that was too
low resolution to actually communicate anything beyond hand-waving anti-
Capital rhetorical sentiment.

~~~
camgunz
> those who pay attention to these sorts of things know that the reality is
> more complex than that

Kind of, but the trends are similar if the magnitudes are somewhat different.
States with more distributive policies have less inequality, surprise
surprise.

> Even if the grandparent was worded too vaguely to communicate the poster's
> actual point, the grandparent turned out to be making a statement that was
> too low resolution to actually communicate anything beyond hand-waving anti-
> Capital rhetorical sentiment.

I guess technically that's true, but it's also not far off. Because the West
is back into relatively low growth, capital's influence is growing [2]. When
you consider the only way to get capital is income or returns on capital, this
is a simple recipe for inequality growing. And it indeed is the likely trend
without (again surprise surprise) more redistribution policies [3].

[1]: [https://boingboing.net/2017/12/14/oligarchy-on-
ice.html](https://boingboing.net/2017/12/14/oligarchy-on-ice.html)

[2]: [https://voxeu.org/article/capital-
back](https://voxeu.org/article/capital-back)

[3]: [https://voxeu.org/article/new-globalisation-and-income-
inequ...](https://voxeu.org/article/new-globalisation-and-income-inequality)

------
Wh1skey
The story of Rome’s fall is both complicated and relatively straightforward
yet it eerily resembles America: The state became too big and chaotic; the
influence of money and private interests corrupted public institutions; and
social and economic inequalities became so large that citizens lost faith in
the system altogether and gradually fell into the arms of tyrants and
demagogues. If all of that sounds familiar, well, that’s because the parallels
to our current political moment are striking. Edward Watts, a historian at the
University of California San Diego, has just published a new book titled
Mortal Republic that carefully lays out what went wrong in ancient Rome — and
how the lessons of its decline might help save fledgling republics like the
United States today.

~~~
WhompingWindows
Not to mention they were all poisoned by lead, using it for sweeteners, pipes,
and for their chalices and cups.

~~~
hnuser77
One could consider Americans poisoned by _something_ , considering that 40% of
the American population is obese (not just overweight) and sperm count has
declined 50% in developed countries over the past few decades.

~~~
throwawayhhakdl
Hmm... is the sperm count stat normalized to the obesity problem? I keep
hearing things about America’s declining health, some of which seem to be
“mysterious” and concerning. But then I’m always reminded that a lot of it is
just people being fat. People being fat sounds like a highly probable culprit
for why sperm counts are dropping on average.

------
jstewartmobile
If more of our pundits were as sharp as this kid, I'd have less anxiety over
the future of our republic.

Instead, we have Maddows and Kristols and Matthews and Schapiros--venal
persons, who make camps in Siberia seem like _maybe_ not such a bad idea.

------
kiterunner2346
Could someone write a tl;dr for this article so I can understand his point(s)?

~~~
lotsofpulp
The gap between the haves and have nots that will cause problems is between
0.1% and 90% to 99.9%, rather than the gap between 10% and 90%. I think.

And there is a lot of misallocation of resources as people try to hold onto
their percentile, or spend an inordinate amount of resources trying to climb
to the next one. I think.

------
notananthem
IDK I have a hard time reading a conservative journal that voted for Trump
describing wage gaps

------
HashThis
The US has healthy capitalism, and a separate theft by crony capitalism. GDP
growth is stolen away from workers to investors. Crony capitalism has
completely spread across the pharma industry, medical, banking, and so much
more.

US congress men and women sell out on the key areas where crony capitalists
need their laws changed.

------
iddan
Who will survive in America? Who will survive in America? Who will survive in
America?
[https://www.youtube.com/watch?v=6Hmr8YLNzoQ](https://www.youtube.com/watch?v=6Hmr8YLNzoQ)

------
paulsutter
The top 0.1% consists mostly of top 1% folks having a windfall, and the top 1%
is mostly top 10% folks having some good years. These aren’t really separate
and distinct classes of people as is popularly imagined

> The performance gap between the top 1 or 0.1 percent versus the top 10
> percent is actually larger than the gap between those right at 10 percent
> and any part of the bottom 90 percent.

~~~
helen___keller
> The top 0.1% consists mostly of top 1% folks having a windfall, and the top
> 1% is mostly top 10% folks having some good years. These aren’t really
> separate and distinct classes of people as is popularly imagined

They aren't "separate" in that we're not literally a feudal society. Sure, I
can agree that an ordinary engineer has a chance of making it big on stock
options and becoming a multi millionaire.

But that's not common. It's like winning the lottery. You can't plan to join a
startup that will make you a millionaire, especially if you aren't a software
engineer or aren't living in silicon valley. And for everyone else, the gap
between the 0.1% and the 1% and the 10% is widening.

~~~
bzbarsky
The key thing here is that most of these measures are measuring income, not
wealth. The graphs in the article definitely show income.

And what that means is that "top 0.1%" or "top 0.001%" is not the same group
year to year. Especially given the way capital income is handled: in the year
when you sell a bunch of stock, or sell a house, or whatever, you suddenly
move much higher in the income distribution, but just for that one year.

To make this concrete, let's look at the "top 1%" of the population in the
sense that their income is consistently in the top 1% of incomes (let's ignore
lifecycle effects for now, which throw extra wrenches into the works). These
people buy houses, then sell them at some point. I really doubt they average
more than 20 years between sales, so in any given year at least 5% of them are
selling houses. Any such house sale is likely accompanied by significant
capital gains (from inflation, if nothing else, though the real estate markets
in various places have been helping, of course). In what fraction of cases are
those capital gains enough to move you into the 0.1% for that one year? What
fraction of 0.1% incomes are then due to "top 1%" people selling their house?

If we were tracking lifetime cumulative incomes here, rather than annual
incomes, we might be able to say something more useful. But a significant part
of what we are seeing in the data is that income at the top has become more
volatile, so when you get taxable events those taxable events are larger than
they used to be.

Now of course the gap between someone who consistently makes a "0.1%" income
and someone who consistently makes a "10%" income has in fact been widening.
But I'd really like to see some data on how big those classes of people are.
Consistent "0.1%" income accrues to _much_ less than 0.1% of the population,
from everything I've seen.

------
sodafountan
Virtually every problem listed in this article is solved if bitcoin continues
its historic rise - and yet you mention bitcoin on hacker news and you're
down-voted to oblivion, it really is unbelievable.

The "Elites" are getting richer because capital is being used to accumulate
more capital through dividends on stocks and revenue producing assets. The
only reason money is being funneled into these assets is because they have the
best return on investment, period. Money goes where it can get the best
return.

The script gets flipped if that asset is a hard, un-inflatable asset like
bitcoin with a built in scarcity mechanism.

Bitcoin doesn't have a dividend, if you're part of the 0.1 percent you can buy
a ton of it, but in order to realize any gains you have to sell it and if you
can't replenish it you'll have to go back to work to earn more. Of course all
of that is in theory, a lot of the truly rich people in this world have income
producing businesses and other assets aside from stocks but you could argue
that that's a lot better than money simply producing more money.

The world desperately needs bitcoin to succeed.

~~~
jacobush
Do you really think the elite would accept any threat to the status quo
without a fight? Besides, even _if_ you were to somehow succeed, the scarcity
of bitcoin would just be the new elite. Bitcoin ownership is already
incredibly concentrated. Meet your new boss, same as old boss.

~~~
sodafountan
You're always going to have people in life who have more than other people,
life is inherently unfair, there's always going to be a 1%. You can put
measures in place to ensure that the gap doesn't widen too greatly, but that's
a different discussion.

It's true that bitcoin creates a disparity in ownership, but you can't
actually realize any gain unless you sell what you have. If I'm accumulating
and holding bitcoin, that's good for me and everyone else who's accumulating
and holding bitcoin because it keeps the price up. If I sell bitcoin at a
profit, that's good for me but bad for most other people, but I also lose my
position and the price goes down to allow others to enter into the market.

There's no incentive to sell with dividend producing stocks and real-estate
because they produce money, if you're strictly speaking about money begetting
more money then that's the problem.

The middle class can gain a strong foothold in bitcoin in its nascencey, the
elites aren't willing to give up their income producing assets but if bitcoin
continues to multiply by 5-10X every four years like many expect it to then
that gives the middle class incredible leverage to move up the economic
hierarchy like we've never seen before.

I actually think this is how the next decade will play out, bitcoin will
continue its historic rise and we'll see economic changes like we've never
seen before. Bitcoin is going to restructure the way the economy works over
the next decade or two.

Millennials will be able to pay off their loans, they'll be able to buy houses
and many will become the new "Elite" until something else comes along.

