This Is the Wrong Way to Fight Inequality

Originally published in New Republic on August 3, 2017.
——-

So first, the good news: The notion that income inequality has caused harm in America has finally broken into the hubs of elite opinion. The sort of socio-political tastemaker who not so long ago denied the problem, has moved on to dissembling about it instead. That’s progress, of a sort.

Dream Hoarders, a book by Brookings senior fellow Richard Reeves, is the latest entry into the debate. Reeves accepts that the United States has become a land of vast economic divides. But having established some common ground with the Occupy Wall Street worldview, he steers the conversation in a direction any plutocrat would love—away from Wall Street, CEOs and the owners of capital. The real problem, Reeves tell us, lies with the upper-middle class.

Reeves’s argument is seductive because it starts with some understated truths. He’s right to say that the top fifth wields a disproportionate amount of political muscle, and benefits from a bevy of tax breaks, subsidies and privileges that undergird what he calls a “glass floor” beneath them. Tax shelters, such as the mortgage interest deduction, offer savings to the rich, while zoning restrictions bar poorer families from the neighborhoods where the upper-middle class clusters. This group is also embedded in social networks that open a backdoor to success, whether through legacy admissions to selective colleges or parental connections that lead to an internship. All of these mechanisms quietly and effectively transfer wealth and power from one generation to the next.

But Reeves is less worried that only a small portion of people enjoy such affluence. In fact, Reeves seems broadly untroubled by inequality, per se. His priority in Dream Hoarders isn’t combatting inequality but improving “relative mobility”: the process by which someone can move up in economic rank, even if that means bumping someone else down a notch. “Downward mobility is not a wildly popular idea, to say the least,” he writes. “But it is a stubborn mathematical fact that, at any given time, the top fifth of the income distribution can accommodate only 20 percent of the population.” That may be true, but it’s not a “stubborn mathematical fact” that only 20 percent of the income distribution should be able to afford comfortable, prosperous lives.

Reeves underlines his point by making clear that he’s uninterested in the kind of social democratic policies that foster greater equality in European countries like Sweden and Finland. “America’s problem is not that we are failing to live up to Danish egalitarian standards,” he writes. “It is that we are failing to live up to American egalitarian standards, based on fair market competition.” The main challenge, he stresses, is to “narrow gaps in human capital formation” so that the “contests” people compete in will be truly fair. “The problem is not that society is too competitive,” Reeves informs us. “It is that it is not competitive enough.” Society has grown unfair, he surmises, partly because the upper-middle class is engaging in “anticompetitive ‘opportunity hoarding.’”


Among the many problems with this strange view of inequality as something like an antitrust issue is figuring out when someone’s gone too far and broken the rules. Dream Hoarders clumsily attempts to demarcate which of the upper middle class’s advantages are legitimate, and which are “unfair” and “anticompetitive.” Reeves sees no problem with affluent parents showering their children with many different types of privileges that they can use to get ahead in our economic rat race. SAT tutors, cello practice, and Mandarin lessons are unproblematic in his view. On the contrary, he sees them as “great, indeed laudable” ways to support “human capital formation.” It’s only when the opportunities of the privileged start to hurt other children, he explains, that it becomes a problem.

A prime example of “opportunity hoarding” occurs when a parent makes a call or writes a check to their alma mater in order to help their kid get into college. (Reeves admits he doesn’t have good data on how common this practice actually is.) Another example is when parents use connections to help their kid score an internship. Amazingly enough, despite his professed interest in fair contests, Reeves does not support banning unpaid internships, concluding that to do so would be “too draconian, illiberal.” He suggests instead that the government fund low-income students who wish to take them, but acknowledges there’s little political support for the idea.

At first glance, it’s awfully hard to see a distinction between Reeves’s approved “human capital formation” and his disallowed “opportunity hoarding.” After all, in both cases, wealthy parents are leveraging their position to give their children a head start over their peers. Reeves has an answer for this—sort of. He concludes that “opportunity hoarding” only takes place when the opportunity in question is valuable and scarce, and the hoarding itself is “anticompetitive.” He discerns a difference between “parental behavior that merely helps your own children and the kind that is ‘detrimental’ to others.”

Unfortunately, this carefully-parsed dividing line is delicate to the point of collapse. What is, for instance, the most likely result of a cello lesson: artistic enrichment, or a bullet point on a resume? Unless those lessons turn into a lifelong passion or a performance career, their main effect is surely to grant children an edge over rival applicants in the race for academic recognition. The line blurs the other way too: Presumably most parents angling for a legacy admission to an Ivy believe their children stand to grow personally from the experience.

When you’re committed, as Reeves is, to a vision of society as a zero-sum battle for economic advancement, then self-betterment and bruising competition for resources look one and the same. Any new skills or experience—“human capital formation”—may also prove an advantage that can be brought to bear against others, while anything that helps someone beat out a competitor and move up the economic ladder could ultimately prove enriching.

If Dream Hoarders fails to locate all the pathologies of the monied professional class, maybe it’s because Reeves is on the inside, looking out. The book carries all the hallmarks of 90s-style Democratic Party thinking, both in its lust for market-style competition in private life and its attitude toward taxes as “a necessary evil.” And for a book supposedly meant to awaken class consciousness, it has awfully little interest in exploring the working class, or even the labor movement. The word “unions” makes just one appearance in Dream Hoarders: Reeves breezily mentions the decline in trade unions as one “competing explanation” for growing wage disparities, before urging his readers’ attention back to “education and skills” as core causes of mounting inequality.

Reeves seems untroubled by the Democratic Party’s transformation into the party of meritocracy and individualism. Though he criticizes the upper-middle class for its sense of entitlement, he remains largely approving of their values—evident from the solutions he proposes to “opportunity hoarding.” Rather than implore his Bethesda brethren to leverage their influence for national card check and single-payer healthcare—policies that explicitly place individuals on even footing with regards to critical economic questions—Reeves encourages his peers to consider expanding home visiting programs, and whether it might be beneficial to shuffle K-12 public school teachers around.

Despite the scale of the problems he supposedly wants to tackle, Reeves’s policy recommendations fall far short of addressing them. On one hand, he’s imploring Americans to build a relentlessly competitive society, and on the other, worrying that everyone might be competing a little too hard after all, and, if they don’t mind, may want to take it all down a notch. Thankfully there are better ways forward.

Pressuring the one percent is essential for any serious agenda to lessen inequality; this can’t be breezily dismissed, as Reeves too often attempts. He points out, smugly, that to tax only the absurdly wealthy would be insufficient to fund the entire progressive agenda. But who is making this point? It’s hard to find anyone on the American left who has proposed writing the top fifth out of the debate altogether.

Moreover, we don’t need the notion of “opportunity hoarding” to see why it’s bad that a privileged fifth of Americans retreat to quiet cul-de-sacs served by stellar suburban schools. You barely need to squint to identify an older, stronger, and further-reaching critique lying just beyond Reeves’s: In many cases, he’s just railing against segregation and its burdens. A twinned agenda of civil rights and aggressive redistribution would address most of the problems that Dream Hoarders claims to identify.

Though Reeves tries to suggest that anything outside of “fair market competition” would be antithetical to American values, Americans shouldn’t have to compete their way to economic security. Progressives concerned about inequality would do well to heed the advice of Roosevelt Institute’s Mike Konczal, who recently urged Democrats to “redouble their commitment to labor, abandon the obsessive focus on the preferences of American professionals, rein in the most predatory parts of the economy, and throw their weight behind simple, universal programs that would improve citizens’ economic and social lives.” Hoarding dreams gets a lot harder when there are plenty of them to go around.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s