The Unhealthy Alliance
When the highest and lowest classes unite, income immobility ensues.


The Republican Party tends to sniff at the question of income inequality. That’s understandable, for were it to declare class warfare, it would be clobbered by the majority of people who haven’t shared in the wealth gains of the super rich. In ignoring the issue, however, Republicans have handed the Democrats a hammer with which to clobber them. Obama’s 2011 Osawatomie speech about income inequality proved highly attractive to voters, and the 2012 election showed that no viable political party could wish away the issue.

That said, there are a number of things we can’t change, or wouldn’t want to in any event. We’ve moved to an information economy that offers premium salaries to the highly skilled, and we live in an era of globalization and free trade that magnifies high-end salaries for a concentrated group of managers. Then there are our welfare payouts and marginal tax rates. The Left would have us think they’re too low. In fact they’re among the highest in the First World – and, if anything, they’re job killers.

Nor would we ever want to see perfect income mobility. That’s a false ideal and would require massive social engineering of a kind no state has ever imposed. So long as there are differences in wealth, the children of rich parents will have a leg up because of the wealth they inherit. The environment also matters. The children of the wealthy are more likely to have been nurtured in homes that prize education and instill the bourgeois virtues that make people wealthy. A child who observes his parents reading books and using sophisticated words learns to emulate them. She is also less likely to fall into the traps that are a gateway to lower class status: unwed motherhood, crime, drug use. Finally, good genes also help. The developing field of genoeconomics suggests that rich parents have good genes and that earning ability is in part inherited. If we’re told that gays are “born that way,” why not the rich?

What this doesn’t explain, however, is why there is less income mobility today in the U.S. than in most other countries. The answer has eluded French economist Thomas Piketty; and the answer is that, through its laws and institutions, America has become an aristocratic society. Perhaps that’s not surprising. Aristocracy is the natural default position of any society — and not merely aristocracy, but hereditary aristocracy.

For this, only two things are needed, common to all of us. The first is the desire to see our children do well, a sentiment that does not require an evolutionary explanation, but one that it easy to provide. We are hardwired to seek to pass on our genes, and this means that, like Deuteronomy, we distinguish between strangers and brothers. We are willing to incur enormous sacrifices for our children or our close relations, but for strangers to whom we are unrelated we have only a constrained sympathy. The second thing is relative preferences. We have absolute preferences when we want something, and relative preferences when we also want more of it than the other fellow. As we wish well for our children, and have relative preferences, we would also want them to fare better than other people’s children. We might want a poorer world, one that lowers Piketty’s g, so long as our children end up on top, with the highest of r’s. We might even prefer a world that leaves our children worse off, so long as everyone else fares worse still. That was the world of Molière’s Le bourgeois gentilhomme, and it’s our world, too.


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