Blood on the Plow

Every now and then a book comes along which while not really saying anything you didn’t know already, rearranges all those bits of knowledge into a new, and fairly interesting, pattern.  

Joel Kotkin, The New Class Conflict is such a book.

Another Christmas gift (this time from my father-in law (thanks!)).

Here are the bits of information:

1. There is a growing divide in American society (See Charles Murray’s Coming Apart for the best description of this divide.) The divide is not solely income based.  The divide is also a cultural divide.

2. There is a Dominant View among the opinion-makers of society (Academia/media) (see any college campus for a good example)

3. There is a lot of new wealth in the Silicon Valley, Seattle and other Tech hubs. 

4. There is a coming generational storm in which the baby Boomers in their retirement are going to divert a lot of resources away from the young to the retired (see Social Security)

5. There are imploding cities and sprawling suburbs.  (See Detroit and All sorts of second-tier cities in the US)

Now, rearrange all that stuff.

Kotkin argues that the New divide in America is:

1. On one side there is the Clerisy (the academy and media and government) and the Tech Oligarchy (The nouveau riche of the Silicon Age).  These two have partnered together to impose a new order on society.  The new oligarchs are using their money to fund the visions of the Clerisy.  In return, the Clerisy vehemently argue against “the Rich” but somehow the tech Oligarchs always get a pass when talking about the Rich.  Generic Wall Street Banker is bad; but Steve Jobs is good.  But, then in a subtle shift, the Clerisy also props up the New York Bankers.

2. On the other side is The Yeomanry.  This is everyone else.  Al those people who, you know, work for a living.  They want a steady job and enough income to buy a house in the suburbs.

The battle is most vivid in the Environmental debate.  On the one side are the Clerisy and their financial backers in the Tech Oligarchy who want to impose a particular vision on society—no commuting, small houses.  The Clerisy and tech Oligarchs don’t like the yeomanry.  The yeomanry does not fit their vision of the new society.  They want to pack people into those small living spaces in Big cities and keep them quiet.  Think Bread and Circuses.  The Yeomanry are constantly rebelling, but it is hard because the new ruling classes are constantly putting barriers in the way of that steady job in the suburbs.  So, the Keystone Pipeline or fracking become examples of the divide.  On the one side are the Clerisy and tech Oligarchs who oppose such things.  On the other side are the Yeomanry who support such things because it will give them lots of jobs and low energy prices and allow them to lead the lives they want to lead. 

Meanwhile, the youth are growing up and if those youth do not end up in the clerisy or the tech oligarchy, where exactly will they go?  Not much hope there.  The Middle class is drying up.

Like I said, not much new here, but I had never really put things together in this way—I had, for example, never really thought about the Silicon Valley-Clerisy connections before, but Kotkin may be right—they are aligned.

So, where is the way out?  On this, Kotkin is right—the solution here is economic growth.  Without economic growth, there is no way out.  The Clerisy does not like Economic growth.  But, how to get economic growth?  Kotkin has some fantasies of a return to a small-scale existence.  Think Russell Kirk or Wendell Berry, but with a growing, dynamic economy.  People spread out across the country, all self-employed, running their own little businesses, being empowered to lead fulfilling lives, setting their kids up to be richer than their parents.  It is a pretty picture in its way.  It is also nearly impossible to imagine it happening.

Has Kotkin tried to start a small business in modern day America?  Sure, it sounds nice and all.  But, it is a giant headache.  I know.  My wife has her own small business. She grows plants and sells them.  She does garden consulting.  The amount of paperwork and regulations to do something like that are stunning.  In the four or five years she has done this, I have never ceased to be amazed at all the little petty tyrannies thrown up by the government which make it just that much harder to run a small-scale business. 

Take the income tax alone.  I have a PhD in economics.  Long ago, I gave up trying to do our taxes by hand, so I bought TurboTax every year.  That was ridiculous.  But, then add a new business, and now we hire an accountant every year just to pay our own income taxes.  That’s crazy.  Just plain crazy.  And this is, let me remind you a small business.  If Janet wanted do hire someone to help her out, the paperwork goes up to a whole new level.  If she wanted to hire some 17 year old kid at $10/hour to help out on Saturdays from April through July, the amount of extra paperwork involved would mean hiring a bookkeeper.  Moreover, she sells tomato plants (excellent ones—lots of great varieties).  But, if she were to also sell, you know, tomatoes—yep, whole new levels of paperwork.  She sells perennials (those are the ones that live for more than a year (yeah, you probably knew that)), but if she sells “woody” perennials, then, yep, whole new levels of paperwork.  We have a farm stand on our property—self-serve, stop by, get the plants, put the money in the box.  Works great.  But, because we have a farm stand and a greenhouse, we had to add a farm policy to our homeowner’s insurance—and you guessed, it , whole new type of insurance company—and even better, there is exactly one farm insurance company licensed to operate in the state of Massachusetts, so we get to pay monopoly rates.  And, we added  a shed to store some pots.  It had to be on a temporary foundation or else, you guessed it, we would have had to go through whole new levels of paperwork to get a building permit in order to add a shed to store pots.  And…well, you get the point.  I could go on like this for hours.  And this is a small business. 

Kotkin thinks lots of people can set up small businesses—he clearly hasn’t done the paperwork for one.  The Clerisy has already stamped out that route to self-sufficiency. 

So, Kotkin may be onto something in the diagnosis here—the tech oligarchs and clerisy are operating in tandem to restructure American Society in their own image.  But, I am afraid his solution isn’t much of a solution. 

In the meantime, some things haven’t changed much.