Re: Re-Stigmatizing Wealth

Anna , as a general matter, changes in social stigmas tend to be the results of changes in underlying social conditions more than their causes . The vanishing stigma on divorce, illegitimacy, etc., which you mention, is one case in point. To some extent a reduction in the stigma preceded the change in policy (redefining marriage in law from a permanent bond to a meaningless piece of paper) and facilitated it. However, the causation in the other direction was much more powerful. The stigma against divorce declined much more after divorce was redefined in law (as a result of that redefinition) than it did before it (as a cause).

The topic of income disparities is another example. If you want to understand this phenomenon, you have to start with the fact that the aggregate inequality numbers everyone’s freaked out about are really driven by an explosive growth in incomes for a tiny number of people. A combination of very long-term structural and cultural changes (most of them good, such as greater freedom to choose marriage partners and greater educational opportunities) is coming together to dramatically increase both the development and the economic deployment of certain highly specialized human abilities. Most of these gifts fall into one of two categories: various forms of the ability to create and use systems of symbols (such as images, words and mathematical formulae) and various forms of the ability to predict and influence human decisionmaking. A small portion of the population possesses these gifts in extreme measure, and our civilization is getting better and better at helping this population nurture their gifts and put them to good use in ways that (in most cases) bring incalculable benefit to all of us.

No force on earth is going to prevent those people from making very large sums of money. It’s quite simple: The number of people in the world who are capable of doing a good job running Apple or Exxon or Wal-Mart is extremely small; the consequences of those companies being poorly run would be catastrophic for millions of people; therefore the tiny group of people capable of running those companies well is going to command extreme salaries. This would be true regardless of our economic system, law, policy, or what set of moral values predominated in the culture.

While Lindsey is right that hatred of the social outsider did create some stigmatization of the rich during the postwar generation, Krugman’s suggestion that executive salaries were kept in check mostly by fear of stigma is laughable. That generation of executives was magnificently indifferent to public opinion; they bear no resemblance to today’s executives, who grovel before the cameras, cringe at any slightest word that might make them look bad in the press, and offer themselves up as diligent servants to any politician who threatens to make them a public scapegoat. The postwar titans of industry didn’t care what you thought of their salaries.

Executive salaries were kept in check during that time mostly because the executives were much less capable. They weren’t worth paying as much. If you doubt it, consider the fact that almost all the dominant industries of that era are now either extinct or lining up for endless government bailouts, primarily as a result of poor decisionmaking by their executives during the postwar generation.

To the extent that high salaries are being stigmatized now, that represents not the return of an old stigma (well, not primarily that) but the introduction of something new. It’s a response to a new situation in the underlying social structure—the emergence of an overclass of extreme achievers. The Occupy Wall Street response was unhelpful, but they were not wrong to percieve that society is now run by people who don’t seem to be part of the same culture they are, and who therefore may not share their values or have an interest in their well-being.

All this is expertly canvassed in Charles Murray’s Coming Apart , and anyone who’s worried about the problem of the new overclass should read that book.