She Is the One Percent

I met an older lady, in her 80s, yesterday, who if she isn’t truly among the 1% is close enough. And here’s what I learned about her–not from her, since she didn’t talk about herself, but from our mutual friend.

She lives in a small town in Michigan, not a glamorous place at all. She lives in a beautiful late 19th century house built by a founding member of the Republican Party, an ambassador to a European country during the Lincoln administration, a house that is complete with full size ballroom, that she’s restoring to period condition and style. She doesn’t hold lots of balls, she just wants to preserve an important part of the town’s history.

She is a collector of art and antiques. She has an amazing collection of antique toys, many, perhaps most, of which are on loan to a local historical society, which manages an even more amazing 19th century house built by a guy who was a bigwig in Michigan Republican politics in the late 19th century.

She is a volunteer for that historical society. They weren’t open yesterday, but she graciously allowed my friend to give me a tour of the even more amazing house, while she waited patiently in the kitchen. She wasn’t just gracious about allowing us to co-opt her time this way, she was enthused. She seemed so delighted at my appreciation of the house that it almost felt like I was doing her a favor.

She and her late husband have contributed a lot to the restoration of the even more amazing house. When the original carpets in two of the downstairs rooms had to be replaced, they paid for the nearly exact replicas–the only source for them was a company in England–at a cost of about $40,000.

She was dressed casually, in t-shirt and jeans. According to my friend she does her shopping at Wal Mart.

I have no brief for the 1%. But I do have a brief against class-analysis.

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About J@m3z Aitch

J@m3z Aitch is a two-bit college professor who'd rather be canoeing.
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20 Responses to She Is the One Percent

  1. Lance says:

    Have any pictures of her home? I love old homes of that era.

  2. Lance says:

    “I have no brief for the 1%. But I do have a brief against class-analysis.”

    I also harbor no ill towards the wealthy. Those that favor class analysis have a special contempt for the wealthy, even when they are wealthy themselves.

    When I was a kid I was struck by a line in the Ten Years After song I’d Love to Change the World,

    Tax the rich
    Feed the poor
    Till there are no rich no more.

    Huh?!

    I was expecting the last line to be “Till there are no poor no more”, but clearly the author of the lyric was more intent on getting rid of the wealthy rather than eliminating poverty.

  3. Troublesome Frog says:

    I’m trying to figure out what to make of this. Is the argument here that we should not bother with positive examination of income and how it’s distributed?

    I can understand being annoyed at some of the conclusions people draw, but I consistently see a hostility toward simply gathering and discussing the data. I’d like to say that there’s a difference between thinking about the data and engaging in “class warfare” as some want to call it, but I’m no longer even sure that there’s a definition of “class warfare” anymore.

    Let me say this: I’m not anti-rich. I think it’s good for us to be concerned about the happiness of rich people. By American standards, I’m quite well off. By world standards, I’m absurdly wealthy. My colleagues will tell you that one of the things I say most often is, “I hope whoever wrote got rich.” Of course I also often say, “I hope whoever wrote this code is dead.” But I’m nothing if not a fascinating man of extremes. Passionate. Mysterious. You know the deal.

    I mentioned this on The League, but I’m very interested in a response from the two of you. Let’s say we play an ultimatum game for $100. What’s the minimum value you’ll accept (assume we move in $1 increments)? What about for $100,000? $1,000,000?

  4. James Hanley says:

    I’m trying to figure out what to make of this.

    That’s ok. So am I. Really, I was just struck by the contrast with some of the comments in the League’s inequality symposium that treated the rich as people who live in a world wholly apart from the rest of us and who do no social good. Undoubtedly that’s true of many rich people. It’s not true of her. There was a sense of an incipient torch-bearing mob in some of the comments, and I guess I’m just suggesting that we ought to be more discriminating in who we burn at the stake than just, “they’re in the 1%.”

    Like I said, I have no brief for the rich. I tend to dislike them because I’m middle class through and through and their attitudes tend to be very different from mine. They tend to make me fully as uncomfortable as the poor do, on a face-to-face basis. I guess I’m just saying that she didn’t.

    As to the ultimatum game, I honestly can’t say in the abstract. It’s like the experiments that show people demand a higher price for a coffee cup when they actually have it in hand than when it’s merely a hypothetical. Also, I’m too familiar with the research on the game, so I’m not sure I can respond without overthinking it. I know I should take the dollar because that’s what’s rational, but I also know that at the price of a few dollars I might get more utility out of telling you to stuff it. At some point that utility changes, but I honestly don’t know where.

    If we could get somebody to pony up $100, we could try it for real. But if we’re really clever we’ll collaborate on getting somebody to pony up $1,000,000, then not really play the game (of course then we’re probably in a prisoner’s dilemma; sigh).

  5. pierrecorneille says:

    I don’t quite why you don’t like class analysis, although I can see how it can become a bad thing if people make an idol of a given class’s “interest” of make life or history into a simplistic good vs. bad struggle.

    I do understand that you have said elsewhere, at the League, I believe, that class analysis robs actors of their individuality. I’d say it does and it doesn’t. It does seem to me that people similarly situated–say, most service have very similar incentives to make certain choices over others (at work, at home, at the voting booth), and that taken in toto, they might have something like an “interest,” and as long as we don’t overdetermine what that “interest” is, I don’t see class analysis along those lines to be particularly anti-individuality.

    Of course, it is possible to construct a “thing” called a class–a working class or a middle class or an upper class–and assign to that class certain motivations or other attributes that treat it as a living, breathing person-like thing. And in those cases, the “individuality” is robbed (or at least taken, often condescendingly).

    Finally, as a historical phenomenon, I do think that at given times in the history of industrialized countries, a class consciousness does indeed develop, although I would agree with E. P. Thompson that the forces at play are not merely the material circumstances. I would agree that some historians–specifically labor historians, in my experience–are too willing to posit that everyone to whom “objective” circumstances assign a class status must and indeed did act (or worse, ought to have acted) in a certain way, say, by united behind the (usually socialist, communist, or syndicalist) strike leaders.

  6. Troublesome Frog says:

    . . .I guess I’m just suggesting that we ought to be more discriminating in who we burn at the stake than just, “they’re in the 1%.”

    There’s triablism in everything and income classes is no different. We do definitely live in different worlds and I definitely get what you’re saying with respect to discomfort interacting well outside your tribe.

    I do think it’s useful to break down and classify these groups as they tend to have shared policy interests. It’s just a matter of what we do with that information. There’s, “The top 1% live a very different life from the rest of us.” Then there’s, “The top 1% live a very different life from the rest of us. Let’s get them!”

    But if we’re really clever we’ll collaborate on getting somebody to pony up $1,000,000

    New idea: We get somebody to pony up a million dollars and then you and I can play the game. For science.

    I ask the question because I think it’s useful even in the abstract. What you say and what you’d really do are probably different, but it does give a sense of what “fairness” means to you on an intellectual level.

    I think that the change in behavior from $100 to $100K to $1M is interesting as well. I’m quite comfortable, but I’d almost certainly take 1% of a million. I see this as very much like salary negotiations. The offer you get is often ultimatum-ish and your marginal product may be will in excess of the offer. How should we split that surplus? What’s “fair” in this context?

    More to the point: To those who say, “Does how we split economic growth matter as long as everybody enjoys some growth?” I have to ask, “How big is the piece and how close is it to our ultimatum game results?” If you reject anything below 20% and then call unskilled workers whiners if they bristle at receiving 10% of each year’s new productivity surplus, are you really being fair? If the industrial revolution had gone differently such that unskilled labor was 100 years behind where they are now, would that still be OK? How uneven does the split have to be before it’s meaningful?

  7. Lance says:

    Troublesome Frog,

    For the one hundred buck Ultimate game I’m telling the other player to bugger-off for anything less than $50.

    In my current financial condition I’d probably accept $10,000 as the limit for any game over $100,000. Although if it was the $1,000,000 game I might use half of it to pay a hit man to kill the other cheap bastard.

  8. James Hanley says:

    Pierre, I should have said I don’t like group analysis, with classes just being a subset of groups. Groups, not having a mind, don’t think, don’t decide, and don’t have coherent preference orderings. Individuals do. Group consciousness can influence them, sure, but at best group analysis is just a proxy, a rough sketch analysis, and one that too often devolves into reifying the concept that the group is in fact the actor.

  9. James Hanley says:

    T-Frog, I get what you’re saying, but I’m not confident the ultimatum game is a good analogue to salary negotiations. How much of the increase company income is attributable to the workers and how much to management? It’s hard to say (and obviously it varies), but what if the management was 85% responsible? Then wouldn’t labor asking for 20% be asking for more than their fair share?

    And the difference with the ultimatum game is that the money is not earned; it’s a free gift. It’s like we’re walking down the street and we both see a hundred dollar bill on the sidewalk, and you happen to be closest to it so you’re the one who picks it up. For me, at least, that changes the amount I see as a reasonable demand. If it’s purely found money for both of us, the fair division seems to me to be 50-50 (which doesn’t mean I’d necessarily turn down <50%, I'm not that rigorous about fairness). For money in which we had unequal contributions to earning it, a 50-50 demand would be unfair.

    But, off the top of my head? In the $100 I'd probably accept $25 while publicly calling you a bastard and privately admiring your chutzpah. In the hundred thousand dollar game, I think I'm with Lance; I'd take $10,000. I'd probably be pretty damn resentful of you, but I'd also say, "I got a free ten grand!" (And of course that's not my likely response in a contract negotiation, where I would be thinking, "dammit, I want what I earned,” instead of “woohoo! free cash!) A million dollar game? I don’t know. Given certain current financial considerations, about $80k in one shot would have a really huge impact on my financial future, so I’d be a fool to turn that down, however unfair it might seem to get only 8%.Heck, at just $50k I’d own my house free and clear, I think. Without those particular financial needs I’d feel a lot freer to turn down such a substantial sum because it’s a small portion. What would I feel is “fair enough” to accept, without those needs? I don’t know, but $400k pops into my mind. Somewhere between the games I’m shifting from focusing more on percentages to focusing more on absolute amounts, but by way of interpersonal comparison. That is, if you get 75% of $100, you only get 50 bucks more than me, but if you get 75% of 1 million, you get $500,000 more than me. And I preach against focusing on relative well-being and in favor of looking at absolute well-being all the time, so that instinct goes against my grain. In the end, yeah, I’d probably take $100k, probably less, again cursing you, but happy to know I’ve made a substantial absolute gain.

    I guess part of what bugs me about the outcomes in the ultimatum game is that they so often are focused on issues of fairness and relative well-being, whereas I want to say, “Just make yourself better off; don’t worry about the other guy!”

  10. Troublesome Frog says:

    I think it’s more ultimatum-like than it seems at first glance. In any given situation, one party may be 100% responsible for productivity increases. But over the long run, we’re really talking about building capital and technology. So if you’re not in the business of risking capital to build stuff or inventing technologies that make workers more effective, you really aren’t a significant part of the k in that e^kt growth path. For most people in most situations, the new money is something that rains down like ultimatum game money courtesy of people who are making transistors smaller or figuring out where to get cheap energy. It’s just a matter of dividing it up.

    If we want to be brutally honest about it, unskilled labor is an extreme case. That sector has probably never done anything in human history to contribute to our per-capita economic growth. They’ve tagged along as technology and infrastructure has made them more productive. So what does that mean?

    I don’t think any of us would say that unskilled labor “deserves” to be living a pre-industrial quality of life simply because they weren’t responsible for our increases in standard of living. We all seem to agree that it’s good that they’ve historically gotten a piece of it. So I think it’s interesting to ask how big a piece of it is reasonable.

  11. pierrecorneille says:

    James,

    I think I see better where you’re coming from, then. When I wrote the above, I also suspected that we were in part differing because of our respective disciplines. I know too little of political science and how it does or doesn’t treat “class” or “groups,” while I also had my historian goggles on.

  12. James Hanley says:

    T-Frog; based on that dismal assumption I’d say bare subsistence living, not at near starvation, but very very basic would be more than fair.

  13. James Hanley says:

    Pierre,
    s. I know too little of political science and how it does or doesn’t treat “class” or “groups,” while I also had my historian goggles on.

    Political science is a bit weird in that in many way it’s not a coherent discipline. One aspect of that is that methodologically it’s all over the place. Lab experiments, formal mathematical modeling, philosophizing, methods of literary review and, of course, historical methods, are all firmly situated within the discipline. But one of the biggest splits is between group-level analysis and methodological individualism. If I walked into a conference and yelled “Group analysis is an intellectual fraud!” I’d have about half the crowd cheering me and half booing me.

    But I do think groups matter to some extent, because contrary to the frequent criticism of methodological individualism, it’s not got an assumption of individuals as atomized and non-social. Instead we understand that humans are social animal and that our actions are influenced by other members of the group and by group level norms and rule.

  14. pierrecorneille says:

    James,

    For some reason your example of shouting that group analysis is a fraud made me think of the Simpsons episode where Dr. Frink, trying to get the attention of an audience of scientists, shouts “Pi is exactly 3!”

  15. Troublesome Frog says:

    James Hanley:

    That’s interesting and a little bit surprising. I can’t argue with the cold reasoning of it, but I suspect you’re in the minority. I don’t think I could bring myself to be quite that philosophically consistent.

    I just find it interesting to see people who do things that really don’t contribute to technological growth or worker efficiency who seem to think it’s fine that they enjoy our increased standard of living but don’t see what the average McDonald’s employee has done to “deserve” it.

    To a first approximation, most professions probably fall into that category. Accountants, for example, owe most of their past century of increased marginal product to computing technology and to the fact that the industries they work for have become more productive. Very little of that increased productivity is due to accounting innovations that make accountants more valuable directly.

    It doesn’t mean that they’re somehow not worthy. They provide a useful service that helps to maintain our standard of living. I suppose my philosophy on this comes down to the fact that regardless of who is “driving” growth, we all still need each other at every point on our growth curve, so sharing the bounty of new productivity seems the fair thing to do.

  16. James Hanley says:

    T-Frog,

    That was based on your analysis, and what, as a result, I would say is “fair.” Truth is, I’m not entirely ungenerous, so I’d argue for a bit more, but I think it would be more than fairness absolute requires. (Unless we look mulit-generationally and say, but what about the children?!, in which case we’re probably going to need to say that whatever is fair to the unskilled laboring parents, maybe innocent kids need a bit more, especially if it gives them a better chance to be more contributory than their parents.)

    I just find it interesting to see people who do things that really don’t contribute to technological growth or worker efficiency who seem to think it’s fine that they enjoy our increased standard of living but don’t see what the average McDonald’s employee has done to “deserve” it.

    Yeah, self-justification seems to be a basic human need, but it never is quite admirable.

    Of course maybe that’s the wrong way to look at it, and we should say that contributing to growth isn’t the issue, just the value of their marginal contribution to the employer, whether the economy grows, shrinks, or remains static. That may bring me together with your conclusions.

  17. James Hanley says:

    P.C., “I’m sorry I had to do that.”

  18. Troublesome Frog says:

    Of course maybe that’s the wrong way to look at it, and we should say that contributing to growth isn’t the issue, just the value of their marginal contribution to the employer, whether the economy grows, shrinks, or remains static.

    I’m not so sure that this works either. When you say “value” in that sentence, you mean value to the employer rather than the market price the employer pays. If a worker becomes more productive due to technology, his marginal contribution to his employer increases. But supply conditions may be such that the market price for his labor remains the same. I think that’s what we’re seeing now: Unskilled labor is both more productive and more plentiful, so employers reap more of the benefits of that new productivity than unskilled employees do.

    As Clint Eastwood once said, “Deserves got nothin to do with it.” Unskilled labor’s market price seems to be entirely outside the control of the unskilled labor sector. They’re at the mercy of their population and the things that others create that make them more productive. I think that the question of what that sector deserves may be as sensible as asking whether it’s fair that it rained yesterday instead of today. If that’s the case, I have a hard time accepting any change in distribution to them without thinking about what it really means to the empathetic social ape part of my brain.

    Or maybe it’s just best to accept that in the future, the wage of unskilled labor will always produce negligible producer surplus and think about how to make “unskilled” a temporary and optional position.

  19. James Hanley says:

    You’re right, I was sloppy there.

  20. Lance says:

    “Unskilled labor” is a catch all that covers a great deal of territory. Teenagers working in the summer are “unskilled labor”, recent immigrants can often be “unskilled labor”.

    Then there are people that have no training in the job they have found, either by virtue of having prepared for no career or having prepared for a different one. There are some people seeking “carry over” jobs while training for their desired profession and there are people that have other assets and just want “something to do”. Some of this last category are retired people that are financially well off and looking to keep busy.

    I don’t see a set of policies or a moral viewpoint that covers this disparate group of individuals. Thus I find references to “unskilled labor” to be overly broad.

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