The Birth of a New American Aristocracy - Review

Matthew Stewart, “The Birth of a New American Aristocracy: The gilded future of the top 10 percent – and the end of opportunity for everyone else” Atlantic Monthly, June 2018, 48-63

In his ten part cover story for the June 2018 Atlantic author Matthew Stewart begins dividing United States wealth into three classes: the top .1 percent, the next 9.9 percent and the 90 percent at the bottom. He defines the 9.9 percent as the new aristocracy in order to argue their self-deception makes them a cause of our growing inequality, destabilizing politics and eroding democracy.

Readers get financial information to help define the groups. The .1 percent have 160,000 households and 22 percent of American wealth in 2012, up from 10 percent in 1963. Assets of $1.2 million in 2016 puts a household in the 9.9 percent and the assets of the 9.9 percent exceed the combined assets of the top .1 percent and the lower 90 percent.

In the mass media mobility justifies inequality, but Stewart reports several research efforts that show the average income of children correlates significantly with the average income of parents. In other words, the wealth of the current generation depends very much on having wealthy parents. Comparisons with other countries show the correlation of wealth between generations gets higher in countries with higher inequality. Since the United States has the highest inequality, a parent’s wealth does a better job predicting their children’s wealth than other developed countries. Mobility today requires winning the mega-millions jackpot.

That finishes part 2, part 3 through part 6 describes some ways the 9.9 percent game the system. Those in the 9.9 percent tend to be people of “good family, good health, good schools, good neighborhoods and good jobs.” They meet and marry in process of “assortative mating.”

Part 4 outlines the game in education. Matthews reports 2.2 percent of America’s high school students graduate from private high schools and make up 26 percent of Harvard students. Education for the “sake of society” has given way to a private benefit measured by higher salary, which helps the financial benefit of the college premium correlate with a decrease in social mobility. Part 5 takes up tax subsides that favor the 9.9 percent and the .1 percent who then fill the media whining about food stamps and welfare cheats. In part 6 readers learn the returns to real estate in the “right places” may account for essentially all of the increase in the concentration of wealth over the last 50 years and coincidentally much of the isolation of the 9.9 percent from the 90 percent.

These first six parts establish a platform to discuss the politics of resentment. Part 7 confronts and scoffs at the 9.9 percent’s delusions of a meritocracy, which Stewart argues has evolved into a class of aristocracy over only a few decades. In part 8 – the Politics of Resentment – inequality provokes a chain of consequences: resentment, political division, instability. Here Stewart lets Trump make his case by citing examples of Trump stoking the fires of resentment for political gain. Stewart concedes the .1 percent delight in their manipulations, but blames the 9.9 percent for taking “our cut of the spoils” while looking “on with smug disdain” and taking it all for granted. Stewart reminds readers that resentment breeds an increase in inequality as every change made by Trump so well demonstrates: the new tax law to wit. At the end of part 8 Stewart warns the 9.9 percent they will soon find themselves the target of economic attack.

Part 9 provides a sobering reminder: reform seldom relieves inequality. History suggests it takes depression, violence, or warfare to bring change and Stewart gives the American Civil War as one example. Remember slavery is a system of cheap labor that guarantees inequality. Lincoln in his famous house divided speech addressed that issue before the civil war: “A house divided against itself cannot stand. I believe this government cannot endure permanently half slave and half free. . . . It will become all one thing, or all the other.” Free labor in competition with slave labor generated poverty, inequality and a violent political instability. Our high school textbooks emphasize the stance of the abolitionists and their ethical and moral objections to slavery. They were a factor, but the civil war started much more for economic reasons: inequality and the depressing effects of a dual wage system.

Part 10 offers a tiny bit of optimism by suggesting the 9.9 percent could get hold of themselves and offer the country some leadership. Leaders should support the larger social order and help direct resources to causes in the common good like health care. Many people of my acquaintance have wondered why so many of the 90 percent keep voting for people like Trump and the Republican pickpockets. I thought of that when Stewart mentioned the poor, southern white boys in butternut and gray that died by the tens of thousands to save the wealth and life of the southern planter class that so crudely exploited them. The United States has had one civil war and I get the feeling Stewart believes the Trump base could bring another. We can hope not, but if it comes to pass the Trump base will join the .1 percent on the one side, and the 9.9 percent will be the other; the resentful always join the authoritarians. Mr. Stewart has warned you.