Conservatives are right to argue that a rising tide lifts all boats, but a bull market does not do a great deal of good to people who are not invested. Our economic policies should take that risk aversion into account if we want to bring in voters who share many of our values but lack our economic confidence. Which brings us to the second point.
Two: Progressives benefit enormously from the fact that economic inequality matters much more to Americans than conservatives like to admit. Without rehashing the entire Rawls–Nozick debate on justice and equality, we should appreciate the brute political fact that a great many people care very deeply about the issue of relative economic inequality. Given that there are signs that economic mobility is declining in the United States, those concerns grow more acute.
Conservatives have long focused on the problem of absolute economic status rather than relative status: We are not naturally interested in how much X has relative to Y, but whether we have created economic conditions in which X may thrive or, short of that, whether X has sufficient resources to avoid starving in the street. As conservatives see it, economic inequality is an inevitable and not necessarily undesirable feature of the same free economy that has given us the richest poor people in the history of the human race. Conservatives appreciate that capitalism has produced widely shared wealth undreamt of until quite recently, meaning that Americans living in what we now call “poverty” are materially much better off than were middle-class Americans in the 1950s. When we think about the richest and highest-earning among us, we tend to admire them; the idea of “trickle-down” has always been a caricature of conservative economic thinking, but we do not believe that the economy is a zero-sum endeavor, either, and believe that (give or take the occasional Hilton heir or Kardashian) profit is generally a sign that somebody has produced something of social value. We scratch our heads when somebody describes wealth on the Steve Jobs or Bill Gates level as “obscene,” especially if that somebody is paying 60 grand a year for college tuition.
But at a certain level of national affluence, relative status starts to matter to people. Think of the American economy in terms of the Mercedes-Benz lineup: If you are struggling to get by, your thinking about owning a car is going to be mostly utilitarian — you need something inexpensive and reliable to get you to work, to take the kids to school, etc. You’ll care a great deal about fuel economy, insurance expenses, and other factors in the total cost of ownership. But if you’re in the market for a new Mercedes, basic performance, quality, and reliability are going to be assumed, and the differences between models are not for the most part utilitarian: A $36,000 C-Class will get you to work just as effectively as a $90,000 S-Class, and it’s a great deal more utilitarian and convenient than a $200,000 SLS. But those gull-wing doors must speak to somebody’s soul, otherwise Mercedes would not be able to sell the SLS for $200,000. And if a C-Class driver feels a little pang of desire when he pulls up next to an S-Class, that is not a sign of a character defect on his part: Aspiration is not the same thing as envy. But from an absolute point of view, figuring out how to move from an entry-level Mercedes to a high-end Mercedes is a pretty high-class problem to have.
Likewise, figuring out how to move up in one of the richest countries in the world is a problem that most of the people walking the earth today would love to have. Our appreciation of that fact sometimes encourages conservatives to in effect tell voters to eat their vegetables, because don’t you know kids are starving in China. At the same time, our celebration of capitalist successes and our appreciation of the vital role played by what we now call “job creators” (unfortunate phrase) blinds us to some important facts. Bill Buckley was no practitioner of class warfare, but he detected that there was something distasteful going on in a great many corporate boardrooms, and that in many cases those gigantic executive paychecks were utterly unrelated to business performance: “What dismays is the utter lack of class in such businesses and businessmen here parading their skills in distortion,” he wrote. “What is going on is phony. It is shoddy, it is contemptible, and it is philosophically blasphemous.” Such facts sting all the more when the middle class and the poor are facing diminished prospects and net worths savaged by the housing collapse.
The poor aren’t poor because the rich are rich, and conservatives of course have to keep reiterating this fact. But neither is it universally the case that the poor are poor because they are lazy or lack ambition, and while the position of the American middle class is the envy of much of the world, that position is tenuous for many Americans, and their anxiety is not to be dismissed lightly. There is of course a very large dose of unhealthy envy in our national discussion about inequality, but nobody who has seriously examined the relationship between politics and the economy (or real-world corporate governance, for that matter) could believe that merit and merit alone accounts for the diverging prospects of the very well off and the rest.