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August 10, 2016

It’s not all about the money

When Theresa May made her speech on the steps of No 10, she said she wanted to reconnect with those who felt they were losing out from the ‘system’ through no fault of their own. She seemed to be saying that she wanted to tackle the growing inequalities across society. Her proposal this week, to put cash in the hands of those who may be affected by fracking was interpreted as an example of this direct approach. Interesting article in the New Yorker which points to a much deeper cause of inequality than a simple lack of cash in the pocket. It’s called a loss of trust. 

Amy Davidson, The New Yorker

I’ll just give you a few statistics,” President Barack Obama said in a speech Wednesday in Washington, D.C. He had a lot of them, demonstrating America’s growing economic inequality (“The top ten per cent no longer takes in one third of our income—it now takes half”) and the concurrent loss of mobility (“A child born in the top twenty per cent has about a two-in-three chance of staying at or near the top. A child born into the bottom twenty per cent has a less than one-in-twenty shot at making it to the top”). Inequality hurt the economy, making growth more fragile and susceptible to speculative bubbles—and unfair. “Rising inequality and declining mobility are bad for our democracy,” Obama said, leaving “a bad taste that the system is rigged,” and “bad for our families and social cohesion—not just because we tend to trust our institutions less, but studies show we actually tend to trust each other less when there’s greater inequality.”

One of the people watching Obama’s speech was Robert Putnam, a professor at Harvard’s Kennedy School of Government, who is intimately familiar with such studies. (He is working on a book on the topic, to be called “Our Kids”; he is also well-known for his book “Bowling Alone.”) He and his team have done some, and he cited others by Sean Reardon, of Stanford; Tim Smeeding, of Wisconsin; and Sara McLanahan, of Princeton. Putnam has met with and talked to Obama about inequality for some time; before he became a senator, Obama took part in Harvard’s Saguaro Seminar, on civic engagement, which Putnam runs. “The President is convinced that this is the defining problem of our age—and he’s not the only one,” Putnam told me. He added that he had talked to other politicians, too, in both parties. (“Paul Ryan, for example.”) There appeared to be some resonances from those talks.

“The part about democracy is relevant,” Putnam said. There was a cohort of “lost kids we see in our data, who have no opportunity for economic mobility”; what’s more, “those kids know.” They also know, he said, that there are other people who do have those chances.

“The data show that not only is there declining trust in government, there is declining trust in other people”; although it wasn’t exclusive to them, this shift was “concentrated among these poor kids, the kids who have been left out,” Putnam said. “They are deeply, deeply cynical about the whole world.… Basically, they don’t trust anybody. And for good reason.” This was not some “wave of adolescent paranoia,” but a recognition of having been let down. Everyone really is against them.

These young people, Putnam said, were becoming “extremely alienated from democratic politics.” (That is, democratic with a small “d.”) A generation was not being put “in a position to be contributing democratic citizens.” And that was, or could become, dangerous.

“There are a number of studies that show that correlation. It’s strong and very robust, in the sense the pattern shows up not just in the U.S., but around the world, and not just today, but across time,” he said. “There remains a serious academic debate about causation—does inequality cause low trust, or does low trust (or rather, low social solidarity) cause inequality, or are both the effects of some as yet undiscovered third variable?”

Some of the causes were, Putnam said, best spotted through “blue, progressive lenses” (working-class wages) and others through “red, conservative lenses” (absent fathers). But from any angle, the situation was “morally objectionable to me, and, I think, to all Americans,” he said. “Americans don’t care how long or tall the ladder is,” he said. “Historically, they’ve cared a lot if they’re getting on the ladder at the same rung.” The central question was, “Is it O.K. for poor kids with talent not to have a chance?”


Obama had the outlines of a program—raising the minimum wage, early childhood education, Obamacare, help for the long-term unemployed, protecting food stamps from more cuts—but a main point of his speech was the idea that government had a role at all—“the elephant in the room here, which is the seeming inability to get anything done in Washington these days.” That had been under attack, in part because of the problems in implementing Obamacare. Obama was less apologetic about that than he’s been in a while: if you don’t like Obamacare, he said, “and I know you don’t,” come up with something better.

From Putnam’s perspective, “any of those things is helpful”—including solutions outside of government—“but most important is a national understanding of the problem by ordinary people.” He compared the present moment, statistically and politically, to the Progressive Era, which also had a convergence of wealth, inequality, and a sense that the country had somehow become corrupt.

“And then, in about ten years, America fixed those problems,” Putnam said. “Child-labor laws, support for mothers, not to mention regulation of business, clean food. Government did it, in the face of a prevailing ideology of laissez-faire—social Darwinism, as it was called.” What made the difference was a moral shift: “People said, ‘This is not the way it should be. This is not America.’ ” He thought it was happening again. So where in that ten-year pattern might we be? Putnam wasn’t sure, but hoped it could be speeded up.