The Fragmenting of the New Class Elites, or, Downward Mobility

Glenn Reynolds is correct in his weekend post to point to the social theory of the New Class as key to understanding the convulsions in the middle and upper middle class; I’ve written about it myself here at VC and in a 1990s law journal book review essay.  The angst is partly income, of course – but it’s also in considerable part, as Glenn notes, “characterized as much by self-importance as by higher income, and is far more eager to keep the proles in their place than, say, [Anne] Applebaum’s small-town dentist. It’s thus not surprising that as its influence has grown, economic opportunity has increasingly been closed down by government barriers.”

The problem the New Class faces at this point is the psychological and social self-perceptions of a status group that is alienated (as we marxists say) from traditional labor by its semi-privileged upbringing – and by the fact that it is actually, two distinct strands, a privileged one and a semi-privileged one.  It is, for the moment, insistent not just on white-collar work as its birthright and unable to conceive of much else.  It does not celebrate the dignity of labor; it conceived of itself as existing to regulate labor.  So it has purified itself to the point that not just any white-collar work will do.  It has to be, as Michelle Obama instructed people in what now has to be seen as another era, virtuous non-profit or government work.  Those attitudes are changing, but only slowly; the university pipelines are still full of people who cannot imagine themselves in any other kind of work, unless it means working for Apple or Google.

The New Class has always operated across the lines of public and private, however, the government-university-finance and technology capital sectors.  It is not a theory of the government class versus the business class – as 1990s neoconservatives sometimes mistakenly imagined.  As Lasch pointed out, it is the class that bridges and moves effortlessly between the two.  As a theory of late capitalism (once imported from being an analysis of communist nomenkaltura) it offers itself as a theory of technocratic expertise first  – but, if that spectacularly fails as it did in 2008, it falls back on a much more rudimentary claim of monopoly access to the levers of the economy.  Which is to say, the right to bridge the private-public line, and rent out its access.

The OWS movement against this social theory backdrop?  (Let’s leave aside the material reality of its occupation, so far as one can tell today from shifting reporting: geographies in which public order was deliberately withdrawn to indulge a certain class of youth and not-so-youth (and the aging generation of New Class professionals projecting its political nostalgia onto it). The result is theft, violence, sexual assault, and levels of filth that, absent the infrastructure of the world’s richest large society, would mean what it means in Haiti – dysentery, cholera, epidemic disease.  Epidemic disease is what happens when you shit your nest, unless there is a larger society that will clean up after you.  The culture industry averts its eyes in its effort to have its nostalgic dream intact.  But leave that aside, and leave aside, too, the folks who send in the organic beet root and goat cheese – for the consumption of the wanna-be New Class that, somehow, has notions of property and entitlement of an intensity that only a born regulator can have, and therefore fine-tuned notions of who eats organic and who goes to the soup kitchen.  This is further complicated by the confused politics of the protestors, engaging in confrontations with police, as Harry Siegel reports from New York, who seem to have responded by encouraging the homeless and disturbed to join them.  Ann Althouse is right to point to Joan Didion’s Slouching Toward Bethlehem, on the decline of the Haight-Ashbury utopia.)

In social theory, OWS is best understood not as a populist movement against the bankers, but instead as the breakdown of the New Class into its two increasingly disconnected parts.  The upper tier, the bankers-government bankers-super credentialed elites.  But also the lower tier, those who saw themselves entitled to a white collar job in the Virtue Industries of government and non-profits – the helping professions, the culture industry, the virtueocracies, the industries of therapeutic social control, as Christopher Lasch pointed out in his final book, The Revolt of the Elites.

The two tiers of the New Class have always had different sources of rents, however.  For the upper tier, since 1990, it has come through its ability to take the benefits of generations of US social investment in education and sell that expertise across global markets – leveraging expertise and access to capital and technological markets in the 1990s to places in Asia and the former communist world in desperate need of it.  As Lasch said, the revolt and flight of the elites, to marketize themselves globally as free agents – to take the social capital derived over many generations by American society, and to go live in the jet stream and extract returns on a global scale for that expertise.  But that expertise is now largely commodified – to paraphrase David Swenson on financial engineering, that kind of universal expertise is commodified, cheaply available, and no longer commands much premium.  As those returns have come under pressure, the Global New Class has come home, looking to command premiums through privileged access to the public-private divide – access most visible at the moment as virtuous new technology projects that turn out to be mere crony capitalism.

The lower tier is in a different situation and always has been.  It is characterized by status-income disequilibrium, to borrow from David Brooks; it cultivates the sensibilities of the upper tier New Class, but does not have the ability to globalize its rent extraction.  The helping professions, the professions of therapeutic authoritarianism (the social workers as well as the public safety workers), the virtuecrats, the regulatory class, etc., have a problem – they mostly service and manage individuals, the client-consumers of the welfare state.  Their rents are not leveraged very much, certainly not globally, and are limited to what amounts to an hourly wage.  The method of ramping up wages, however, is through public employee unions and their own special ability to access the public-private divide.   But, as everyone understands, that model no longer works, because it has overreached and overleveraged, to the point that even the system’s most sympathetic politicians understand that it cannot pay up.

The upper tier is still doing pretty well.  But the lower tier of the New Class – the machine by which universities trained young people to become minor regulators and then delivered them into white collar positions on the basis of credentials in history, political science, literature, ethnic and women’s studies – with or without the benefit of law school – has broken down.  The supply is uninterrupted, but the demand has dried up.  The agony of the students getting dumped at the far end of the supply chain is in large part the OWS.  As Above the Law points out, here is “John,” who got out of undergrad, spent a year unemployed and living at home, and is now apparently at University of Vermont law school, with its top ranked environmental law program – John wants to work at a “nonprofit.”

Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in “sustainable conservation.”  She is now raising chickens at home, dying wool and knitting knick-knacks to sell at craft fairs.  Her husband has been studying criminal justice and EMT – i.e., preparing to work for government in some of California’s hitherto most lucrative positions – but as those work possibilities have dried up, he is hedging with a (sensible) apprenticeship as an electrician.  These young people are looking at serious downward mobility, in income as well as status.  The prospects of the lower tier New Class semi-professionals are dissolving at an alarming rate.  Student loan debt is a large part of its problems, but that’s essentially a cost question accompanying a loss of demand for these professionals’ services.

The OWS protestors are a revolt – a shrill, cri-de-coeur wail at the betrayal of class solidarity – of the lower tier New Class against the upper tier New Class.  It was, after all, the upper tier New Class, the private-public finance consortium, that created the student loan business and inflated the bubble in which these lower tier would-be professionals borrowed the money.  It’s a securitization machine, not so very different from the subprime mortgage machine.  The asset bubble pops, but the upper tier New Class, having insulated itself and, as with subprime, having taken its cut upfront and passed the risk along, is still doing pretty well.  It’s not populism versus the bankers so much as internecine warfare between two tiers of elites.

The downward mobility is real, however, in both income and status.  The Cal graduate started out wanting to do “sustainable conservation.”  She is now engaged in something closer to subsistence farming.

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