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Greg Ip Wonders What the Sam Hill the Federal Reserve Is Doing

Aaron Swartz: Chris Hayes’ "The Twilight of The Elites"

Aaron Swartz: Chris Hayes’ The Twilight of The Elites:

Chris Hayes manages the impossible trifecta: the book is compellingly readable, impossibly erudite, and—most stunningly of all—correct…. We thought we would just simply pick out the best and raise them to the top, but once they got there they inevitably used their privilege to entrench themselves and their kids (inequality is, Hayes says, “autocatalytic”). Opening up the elite to more efficient competition didn’t make things more fair, it just legitimated a more intense scramble. The result was an arms race among the elite, pushing all of them to embrace the most unscrupulous forms of cheating and fraud to secure their coveted positions. As competition takes over at the high end, personal worth resolves into exchange value, and the elite power accumulated in one sector can be traded for elite power in another: a regulator can become a bank VP, a modern TV host can use their stardom to become a bestselling author (try to imagine Edward R. Murrow using the nightly news to flog his books the way Bill O’Reilly does). This creates a unitary elite, detached from the bulk of society, yet at the same time even more insecure…. The result is that our elites are trapped in a bubble, where the usual pointers toward accuracy (unanimity, proximity, good faith) only lead them astray. And their distance from the way the rest of the country really lives makes it impossible for them to do their jobs justly—they just don’t get the necessary feedback. The only cure is to reduce economic inequality, a view that has surprisingly support among the population…. This is just a skeletal summary—the book itself is filled with luscious texture to demonstrate each point and more in-depth discussion of the mechanics of each mechanism…. So buy the book already….

Class hangs over the book like a haunting spectre (there’s a brief comment on p. 148 that “Mills [had] a more nuanced theory of elite power than Marx’s concept of a ruling class”) but I think it’s hard to see how the solution relates to the problem without it. After all, we started by claiming the problem is meritocracy, but somehow the solution is taxing the rich? The clue comes in thinking clearly about the alternative to meritocracy. It’s not picking surgeons by lottery, Hayes clarifies, but then what is it? It’s about ameliorating power relationships altogether. Meritocracy says “there must be one who rules, so let it be the best”; egalitarianism responds “why must there?” It’s the power imbalance, rather than inequality itself, that’s the problem….

The trend in recent decades (since the fall of the Soviet Union and the ruling class’s relief that “There Is No Alternative”) has been for the people at the top to seize all the economic gains, leaving everyone else increasing insecure and dependent on their largesse. (Calling themselves “job creators”, on this view, is not so much a brag as a threat.) But with less inequality, it could be otherwise…. Even on strict efficiency grounds, this strikes me as a more alluring view than the usual meritocracy. Why put all your eggs in one basket, even if it’s the best basket? Surely you’d get better results by giving more baskets a try…