Saturday, February 6, 2010

Samuel Bowles on Inefficiency in Unequal Societies

Here is a bit from an article in the Santa Fe Reporter by Corey Pein who interviewed Samuel Bowles, an economist at the Santa Fe Institute:
Bowles offers a key reason why this is so. “Inequality breeds conflict, and conflict breeds wasted resources,” he says.

In short, in a very unequal society, the people at the top have to spend a lot of time and energy keeping the lower classes obedient and productive.

Inequality leads to an excess of what Bowles calls “guard labor.” In a 2007 paper on the subject, he and co-author Arjun Jayadev, an assistant professor at the University of Massachusetts, make an astonishing claim: Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods.

The job descriptions of guard labor range from “imposing work discipline”—think of the corporate IT spies who keep desk jockeys from slacking off online—to enforcing laws, like the officers in the Santa Fe Police Department paddy wagon parked outside of Walmart.

The greater the inequalities in a society, the more guard labor it requires, Bowles finds. This holds true among US states, with relatively unequal states like New Mexico employing a greater share of guard labor than relatively egalitarian states like Wisconsin.


The problem, Bowles argues, is that too much guard labor sustains “illegitimate inequalities,” creating a drag on the economy. All of the people in guard labor jobs could be doing something more productive with their time—perhaps starting their own businesses or helping to reduce the US trade deficit with China.
Read the article it is full of insights.

I like this bit:
Just to drive the point home, here’s a third number: 1.3

That’s the percentage likelihood that a bottom 10 percenter will ever make it to the top 10 percent. For 99 out of 100 people, rags never lead to riches.
This is a good antidote to those who claim that the US is a "meritocracy" and that "anybody can get ahead if they work hard". It isn't true. Social class is sticky in the US. There are a lot of hidden hurdles that keep those from the lower classes ever getting a real chance to thrive and compete with the idiot sons & daughters of the rich.

Or, as this article puts it:
So, much of what Americans tell their children is wrong. It doesn’t really matter how long you go to school or even necessarily how hard you work. The single most important factor to success in America is “one’s choice of parents,” as a contributor to Unequal Chances wryly put it.
The article has a fair amount of content of local interest only, but there is enough good stuff to make this worth reading. At the very least, this should introduce you to Samuel Bowles. He along with Herbert
Gintis
have written some very interesting and important papers and books dealing with economics and social justice.

3 comments:

Unknown said...

I often think of the Tao Te Ching when I think of the divide between the classes. Here is one of the chapters that speaks of this:

Ch9: Hold yourself back from filling yourself up,
or you'll tip off your stand.

You can hammer a blade until it's razor-sharp
and in seconds, it can blunt.

You may amass gold and jade in plenty
but then the more you have , the less safety...

Are you strutting your wealth like a peacock?
Then you've set yourself up to be shot.
Your bring about your own disaster
Because you've got too much.

Let go, when your work is doe:

That is the Way of Heaven.

Thank you for the introduction to Bowles.

Unknown said...

My family is watching "Fiddler On The Roof" and I just heard this really good line:

"If the rich could pay the poor to die for them; we, the poor, would make a nice living.

RYviewpoint said...

Thomas: I enjoy the film Fiddler on the Roof and most of the films made by the Canadian director Norman Jewison. This film has an interesting blend of history, religion, revolution, and romance. It's Hollywood, but it does teach some good life lessons.

As for the Tao Te Ching, I've always found it fascinating but culturally remote since it is filtered through translators and you can never tell how they've "interpreted" the original. But I do like your quote.