Old piece from Bloomberg, but needs to be recycled -- if I've said it once, I can say it again: it's all about demand -- increase demand, you get economic growth!

The Professional Class in America: Time to Step Aside?

William Sundwick

Lately, there has been much written about the changing role in American politics (perhaps, Western democracies, in general) of the upper middle class – we are now calling them the “professional class.” How did this social class become so dominant in advanced societies? And, where does it leave most workers, who lack higher education, who can barely hope to maintain basic middle class living standards, much less advance to something better?

Early American Professions

In eighteenth century America, land surveying became an established profession. It was the profession of George Washington, Thomas Jefferson, and Abe Lincoln, prior to moving on to military, legal, and political pursuits. Before you could practice surveying, you needed to have appropriate training, and be certified by some legal authority. These were the standards for professionals, as they are today.

The number of occupations that had such requirements steadily increased through the nineteenth century. Even the early colonists had recognized medicine, law, and divinity as professions. Land surveying was the first to be added, followed in the young republic by actuarial science, dentistry, civil engineering, architecture, and accounting. As technology and medicine continued to grow through the century, social complexity also grew, adding teaching, librarianship, nursing, optometry, and social work to the list.

Population growth itself increased the need for human services, and the establishment of new towns required public works. New ways of accumulating wealth through capital motivated a job market for experts in a variety of capital-intensive pursuits, including finance and economics. New potential for achieving the “good life” began to point toward psychology and pharmacy as professions. As we moved through the twentieth century, it became apparent that there would be many different specialized occupations, all needing both training and “accreditation.” With these developments, the gap between the ever enlarging “professional class” and the working class, who did not have such skills or accreditation, would continue to grow.

The Autonomous Class

Compensation levels between some professionals and others, as their numbers grew, often was based on educational attainment. Education became the primary membership marker in the New Class of professionals. Yet, all professionals share one thing in common -- autonomy. We rely on them to make knowledge-based decisions in their respective fields. They may be charged with carrying out an organizational mission based on exercise of their judgement, if they are employed by an organization; or, if self-employed (i.e., “hanging out a shingle”), they market themselves to clients.

Regardless of the education required, it’s fair to say that professions concern themselves primarily with abstract concepts, symbol manipulation, and analysis. Some would generalize to say that professionals “work with their heads, not their hands.” Although this is clearly a generalization (artists, musicians, surgeons?), the distinction between knowledge work and manual work is the key point. And, the acceptance of the professional as an autonomous authority, by corporate hierarchy or client, is enforced by professional associations, who have considerable influence -- and, who promote scarcity of professionals, via those educational requirements, to keep compensation high. 

Rentiers

 Inequality has been rising as professionals of various stripes account for a greater share of economic activity, compared to labor. If income is derived from ownership of scarce resources, it is rent income. Those resources can include land, airline routes, and oil tankers … and, they can include knowledge. They clearly include intellectual property in the form of patents and copyrights. They also include licenses  required by professions. Universities possess licensing authority, as do state and local governments. A degree from an accredited institution of higher education is always a “license.” The rental income for the university is tuition. Once licensed, the income generated by a professional holding that license is also rent – it is ownership of a scarce resource.

Karl Marx considered all professionals of his time to be participants in “rentier capitalism.” A rentier is what some economists came to know, colloquially, as a “coupon clipper” -- those whose income is derived from anything other than production. In Marx’s time, they would be the bankers and landlords, the accountants, architects, and actuaries. In the modern era, the portion of the economy that Marx would describe as rent-based has increased manifold. One wonders whether our definition of economic rent shouldn’t be narrowed.

But, the other side of the coin is that the growth in power of the much-enlarged modern professional class has been at the expense of those who cannot match the scarcity of credentials held by the more powerful organized professional groups. Blue collar labor unions don’t even have the clout of teachers’ unions in contemporary American politics.

Class Resentment

Among the byproducts of rising inequality between workers and professionals is the resentment that comes when your supervisor is not one of you -- if they come from a different class, a professional class, rather than rising through the ranks. The attitude of “I’d like to get out of this rut, too” is becoming more common in America as inequality increases, with wages stagnating. Those who have not invested in education to the same extent professionals have ask: “Why do the professionals deserve those fancy salaries?” Or, they question whether the professional (rentier) is more producer or consumer (“maker” vs. “taker,” to use political rhetoric of the 2012 presidential election).

 

In contemporary American society, one of the principal tools professions use to increase their influence, and fortunes, is to create “Barriers to Entry.” The greater the educational requirements to gain the license to practice, the more rent income goes to the university, and the more income can be earned by the practicing professional. Their knowledge and skills become dearer, scarcer. Hence, politically, it’s easy to see a natural alliance between the academy and the professional association. One can argue, however, that the current state of this alliance (or conspiracy, depending on your point of view) is out of balance. As higher education now requires extensive debt (rental income for student loan finance), the income for the academic partner may decrease, since nobody can afford to enter … or, at least, stay for their credentialing ceremony! The alliance is threatened. Unless we grant this activity is somehow increasing net productive value, the likely result is a state of social entropy (see blog post, 4/14/2017, “Social Entropy: Tribalization and Decline of Elites”).

Democrats vs. Republicans

American politics, since the late nineteenth century, has been dominated by two political parties, the Democrats and Republicans. These two parties, however, have not talked to the same constituencies over the last hundred years. The Progressive Era of the early 20^th century featured the Republican Party advocating most effectively for working people and consumers. The Democratic Party of that era was regional and agricultural, suspicious of any threat to the existing social order. However, the First World War saw an internal upheaval among Republicans, and they emerged in the twenties clearly the party of capital, and against labor.

Only after the Crash of 1929 did “New Democrat” FDR rescue his party, by openly opposing the free-market capitalist agenda of Republicans. Throughout this period, the professional class was steadily increasing its influence on American culture, in general. Government became very technocratic, with expanding bureaucracies, employing a multitude of experts, much like the growing capitalism of the previous century. The continuation of the New Deal, after Roosevelt’s death, managed to co-opt even the Republican Party of Eisenhower and Nixon. Professionals became a dominant constituency in both parties.

Then, in the 1972 election, the Democratic Party imploded. After the humiliating defeat of George McGovern, Democrats embarked upon a two-decade project to remake their party into a pro-capitalist, pro-growth, pro-rentier advocacy group. This is the thesis of Thomas Frank’s book, “Listen, Liberal” (2016). No more policies for the working man … campaign rhetoric, yes, but no longer any concrete policies to benefit the working class. It reached its peak during the Obama years; and, by extension, Hillary Clinton’s campaign in the last election.

Thomas Frank’s Prescription

Of course, working people didn’t disappear, but the Democratic Party, at least, focused, instead, on “identity politics” of racial and educational commonalities. As Frank develops it, if Democrats are to win elections going forward, they must rediscover the working class, probably at the expense of the professional class. The Party, he claims, has lost its roots … gone is organized labor, one of the three pillars of the party at mid-century: labor, POC (People Of Color), and the professional/technocratic class. Only two legs of the stool remained after the turn of the 21^st century. Barack Obama succeeded only because his two challengers were even more obviously beholden to the world of capital, and rent, than was the Democratic Party. The off-year drubbings Dems have received over the last decade in Congress and statehouses, support his contention.

Meanwhile, the Republican Party also has a three-legged stool, social conservatives (also known as the “religious right”), business interests (especially, small business), and certain professionals (especially, military, and law enforcement). In election after election, state after state, these three legs proved more durable than those supporting the Democratic stool. Surely, a re-energized labor contingent could easily find itself loyal, once again, to the Democratic Party, if only that party would welcome it into its ranks. For its part, organized labor may have to do some restructuring, too, before it can make any difference in future elections. How about clear, focused positions on some of the economic issues around rent and inequality – for openers?

And, we could also use a broader definition of productive labor … is not any labor that increases net social benefit productive? Perhaps it’s time to let Karl Marx rest in peace.

Is poverty genetic? ... interesting scientific evidence

Financial catastrophe in real estate may be first big impact of climate change in U.S. ... says Joe Romm

New party comin' round in USA? I could join ... maybe takeover of Dems is a bit much, tho'!

AL, MS, GA can't become "New Detroit" without UAW! That was real engine of middle class arrival of blue collar workers in 50s and 60s

Hate Peter Thiel? Larry Page? Get Jonathan Taplin's new book, "Move Fast and Break Things" -- he hates the digital monopolies, mostly because they killed the music business. Interview from AlterNet.

Bernie Sanders' main strength has always been that "I" next to his name, that's why he re-registered as Independent after the primary. Dem apparatchiks who think that hurts him as spiritual leader of party don't understand American political dynamics ... future belongs to left, get ppl off their sofas to vote, don't waste time trying to steal them away from Republicans!

Social Entropy: Tribalization and Decline of Elites

William Sundwick

Collective Consciousness

Shared cultural experience, often reaching back centuries, is what determines many social behaviors, from voting behavior to social attitudes like racism or sexism. It is passed from generation to generation -- the basis of class identity and national identity. These cultural identities determine what we read, how we are educated, and how we interpret what we read and learn. Indeed, often, we only accept input from certain qualified sources … the frequently cited “echo chamber” of social media news feeds. It all comprises our collective consciousness as a society. Some of the filters our experience passes through become very sophisticated over time, and may be difficult to perceive. We accept them as the rules we live by. They become “social norms.”

Ordinarily, social norms are enforced by law, custom, and group status markers. Together, the enforcement mechanisms constitute what we know as “authority.” But, what happens when the enforcement begins to break down? Do we lose collective consciousness, forgetting the norms of the past? Do we depend on individuals to successfully break the rules, before we, ourselves, can be free from social bondage to that collective consciousness?

Systems theory, though originally invented to describe natural phenomena, is today common in political science and sociology, especially via cybernetics: the study of feedback mechanisms and system change. Application of the Second Law of Thermodynamics (entropy) to social systems, however, has not necessarily been accepted into the standard lexicon of either political science or sociology. Yet, there is a link, as manifested by the transformation of complex social organizations into tribal entities.

Tribalization

Relationships between members of a social group may be based mostly on the larger collective consciousness, social norms; or, they may be based on things like kinship, language, religion, and neighborhood. The multiplicity of filters for shared experience encourages increased tribalization of society. There appears to be a breakdown of traditional social structure underway, with big groups, like nation states, losing influence compared to smaller autonomous groups. These small groups emerge as virtual tribes. This is a global phenomenon, not limited to the United States. It has been aided by the rapid expansion of telecommunications capacity. The more complex social groups, with many interlocking subgroups, which share the same basic cultural identity, are becoming relics of the past. The new tribal groups, being autonomous, never need to speak to one another. Social norms of the larger group are not enforced effectively on their native turf. The ability to “see the forest through the trees” is increasingly restricted to a certain social class … the one that has been acculturated to systems thinking. While perhaps this has always been true to some extent, something is changing now. This group is losing its social status! The authority of knowledge is diminishing, perhaps because of mass availability of information, and a long-established social norm no longer as powerful as it once was. It also may be because more people feel betrayed by the “professional class” that has arrogated to itself an ever-increasing portion of the social pie.

One of the main concerns of pundits is with the existence of social media “echo chambers,” where users tend to be exposed only to opinions, or even facts, which support their own bias. Certainly, it is possible for some exceptional individuals to break out of the prisons of their collective past bias, if they possess the proper spirit of adventure. Eventually, such gifted persons will decide that they may have been wrong!  The impact of this in the social sciences is that there is no control mechanism … the Internet is not the “property”, or under the authority, of any recognizable social entity. It is supranational, and its content isn’t even managed by any international organization. (See Warp & Woof post: “Mysteries of the Internet: IP Addresses – Where Do They Come From, and Why Should You Care?”)

The Power Elite and Social Entropy

Politics and sociology intersect when it comes to looking at power relations in society. An important component of these relationships is authority.  Modern social units -- the municipality, the state, the nation -- bestow legal authority via politics, but politics also influences other types of authority. The authority of knowledge, especially, comes from social constructs (advanced degrees, or a resume in government) which, in the past, have determined political outcomes. Not so much anymore. If any of these alternate sources of authority are challenged, and lose, a pillar of social cohesion may be lost. This is certainly true of the authority of knowledge, as seen in the last U.S. presidential campaign, and the British Brexit vote. All traditional “intellectual” elites in both countries opposed the two outcomes.

C. Wright Mills, in “The Power Elite,” identified three social groups which, in all advanced industrial societies, control the bulk of social and political norms practiced by the society’s members. They were the institutions of the military, business, and government. He didn’t include academia as a normative power elite. It seems, fifty years later, that omission has become an endorsement for his definition of the power elite, after all.

Power relationships in society do change. There are challenges to the legitimacy of social institutions, and of political outcomes. Elites are challenged. They’re often replaced by other elites, contrary to the argument that there is a pluralism at work in advanced societies. Democracy is fantasy, as elite theory postulates. Still, shuffling off one elite group for another can create social change, because of varying constituencies.

During most of the 20^th century, there was an alternative social organization to the familiar corporate, capitalist-dominated, form familiar to us in the West (Mills’ model for the “Power Elite”). This alternate form was the socialist model practiced in the Eastern Bloc. The Yugoslav apparatchik Milovan Djilas described a “New Class” in these societies, in the Soviet Union it was known as the Nomenklatura.  Prophetic socialist writers from the Bolshevik era (Trotsky) as well as anti-Communist writers in the West (Friedrich Hayek, among others), saw this New Class as the ultimate downfall of the utopian socialist state. Conventional historic interpretation of the fall of the Soviet Union, and transformations of the People’s Republic of China and Vietnam, tends to support that view.

Underlying the theory of social entropy is the notion that internal decay of all social structures is inevitable, following loosely the Second Law of Thermodynamics. The argument goes that the more energy that is invested in maintaining social norms the more friction, and less useful “work” (social change?), is output from the system.

Emile Durkheim, at the end of the 19^th century, did a groundbreaking study of suicide, from a sociological perspective. He coined the term “anomie” to describe the case of social norms abandoning the individual, no longer serving their personal needs. By extension, one can see this concept describing radical social alienation in the form of protest, or even revolutionary organizations. Indeed, whenever society no longer serves the needs of its members, we can say there is a state of anomie in the group which perceives that it is not served. If this anomie is spread out among various subgroups in a complex society, one could observe general system entropy, in accordance with the Second Law of Thermodynamics.

EROEI Theories

My argument is that politics and sociology, as we study them, are based on constructs we have made about what has gone before us, often what our ancestors had created. It’s not so much that they don’t matter in the present, or won’t influence what happens in the future, but that they come from the past. True, knowledge is being accrued constantly, new research does shed light on social phenomena, perhaps even leads to a new social theory. Investment in social energy through research, just as much as maintenance of social norms, might suggest looking at return on that social investment.  Does it match the cost, in terms of social friction, or threats to existing elites? If not, society will ultimately lose energy (value).

Energy Return on Energy Investment (EROEI) theories have been proposed in environmental science to describe similar activity regarding fossil fuels and social structure. Like fossil fuels, it can be argued that social energy is a non-renewable resource. It is limited by the size of the population, and by the available social power of different groups, both elites and non-elites. It is limited by levels of authority given to different groups. The social return on that investment would be measured in increased power for any or all groups. Tribalism might be a response to low return on big social investments. Little is invested, by comparison, in the tribal group, so less needs to be returned.

Warp & Woof

When I launched this blog, last Groundhog Day, I introduced it with a sort of charter. It would be built, I wrote, on five pillars of content, which I called: The Past, The Present, The Future, Totems, and Beats. Then, I went on to describe what sort of material would be in the content for each of the five pages. The page called “The Past, What Used to Matter,” would consist of “philosophical meanderings about politics, sociology and history.”  While history is obvious, my thinking about politics and sociology, at the time, was that both disciplines were expressions of our collective consciousness. They were based on shared experiences, and on our reading; but, specifically, on interpretations of them coming via social filters. Those filters are all rooted in a collective social past.

Both economics and anthropology live on Warp & Woof’s “The Future” page … “What May Matter, Who Knows?” That’s because those disciplines have an end which is future-oriented, increasing resources, or surviving in situations of reduced resources. Political science and sociology, conversely, only seek to increase understanding of forces which have led us to our present condition. They have much more in common with the study of history. But, unlike history, which is mainly storytelling, these two disciplines throw in some data analysis, and rely on hypothesis testing, in the scientific tradition … but grounded in data from past behaviors (e.g., voting patterns, survey research).

Finally, I will support my thinking about the social sciences with my reading list from the last few years. Newer authors have been more responsible for my current taxonomy of these disciplines than the older group cited above. These are primarily writers in economics and anthropology. Thomas Piketty did a fantastic job of bringing a traditional Marxian model into the 21^st century. Joseph Stiglitz has further emphasized what the future “good society” should look like. Robert Frank, a behavioral economist, contributed an important concept for social models: relative status. And, significantly, from anthropology, Jared Diamond, in “Guns, Germs, and Steel,” gave me a long view of human civilization which my college background in modern U.S. and European history never did.

My attachment to older, more traditional, social models, like those of structuralism, or the Marxian creed of controlling the means of production, are clearly romanticized notions from the past. That said, I can’t be totally removed from social turmoil, since I do believe in a dialectic tension in history … thesis à antithesis à synthesis. And, looking at history is as much a part of my page for “The Past” as are the social sciences. I firmly believe that history will continue to be written, even as complex societies decompose into tribal entities, with few enforceable social norms across groups.

Reading List

Jared Diamond, “Guns, Germs, and Steel”, W. W. Norton, 1997

Robert Frank, “The Darwin Economy”, Princeton University Press, 2011

Thomas Frank, “Listen, Liberal”, Metropolitan Books, 2016

Steve Fraser, “Limousine Liberal”, Basic Books, 2016

Thomas Piketty, “Capital in the Twenty-First Century”, Belknap Press, 2014

Gary Cohn has temporarily triumphed in Trump palace intrigue ... he represents the very heart of neoliberalism, not in the interests of the American people! But, since DJT listens to whoever has kind things to say to him, day to day, expect return to his roots soon ... more white nationalism, more neo-nazi antisemitism, more contempt for everybody not in his "inner circle", any time now!

Great post from Vox.com on strategic approaches to "deep decarbonization"

Henry Blodgett from 2013, worth a reminder ... economy mostly about DEMAND, investment is only a seed!

Seems to me that DT may have had a deeper political goal in mind when he launched strike against Syria ... take some of the pressure off!

Reports from multiple studies ... need to take serious look at medical marijuana!