Manufacturing the Middle Class

Philo of Alexandria – whose blog I have never visited before, but I might now – writes of something he calls (after Instapundit’s Glenn Reynolds) Reynolds’ Law: “Subsidizing the markers of status doesn’t produce the character traits that result in that status; it undermines them.”  He draws it out of this quotation from Reynolds:

The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.

This is a nice way of crystallizing some conceptual differences between conservatives and progressives.

The essential, intuitive idea is that granting the trappings of middle class life, to those who have not shown the qualities and habits that lead the lower class to rise into and remain in the middle class, (1) undermines the incentives to develop those qualities and habits, (2) places people within the middle class who will soon fall out of the middle class because they lack the qualities and habits that would keep them there, and (although this is less explicitly explained in this specific passage) also (3) promotes a bubble in the market for those trappings, since the government is now subsidizing things such as (and thus sellers can demand more for) a college education and home ownership.  The housing bubble burst with a destructive power that is still roiling not only the American but the global market — and many speak now of a tuition bubble that will soon burst as well.

I agree with this picture to an large extent, but the reasons are complicated.  The basic questions are these: To what extent are people in the lower class, and in the middle class, due to the qualities and habits they possess — as opposed to being in the lower class, say, because of systemic obstacles against social climbing?  And are college education and home ownership merely “markers” of middle class status, and not also “makers” or contributors to that status?  Is it true, in other words, that being given these things will not at all cultivate the qualities and habits that sustain the middle class?

I can agree with (1).  When an individual can work hard to attain a college education and home ownership — or can not work hard and simply receive them from the government, then indeed the incentives are out of whack and the government is poisoning the culture out of which the qualities and habits that make people effective and successful tend to develop.  In this sense giving the “markers” of status to those who do not possess the “makers” of status (initiative, discipline, etc.) undermines those makers.

I can only partly agree with (2).  For one thing, when a person becomes a homeowner for the first time, it may well awaken traits and disciplines that will make him more likely to be able to retain the house.  It will not make him a different person over night, to be sure; but now the individual has something significant he wants to retain, and potentially a great deal of debt if he fails to secure a job and manage his money wisely.  However, if the government not only helps the individual secure the home but also promises to help him retain the house even if he cannot pay for it (by, say, cramming down mortgages), then again the incentives are undermined.  It may seem uncompassionate for the government to let people lose their homes, yet such thorough interference in the housing market may be more destructive over time.

A college education seems rather different — more likely (at least when a college education is what it should be) to accomplish a substantial change in the individual’s qualities and habits — than home-ownership.  This of course is the hope that lies behind government-subsidized college education: that the government can take lower-class individuals, supply them with the right education, and release them to climb the social ladder.  In other words, a college education is not just a “marker” of social status; it is also a “maker” of status.  This certainly happens in some cases.  We all know people who have climbed the social ladder due to their college education.  Reynolds still has a point here, since the people who make the most of their college education and use it for advancement tend to have the qualities and habits that would have led them to be successful even apart from government subsidy.  Yet, for some, a college education is simply out of reach apart from such a subsidy.  This may be best addressed by withdrawing government from the process and letting educational institutions compete on a non-inflated field, but it is still the case that an education is both a “maker” and a “marker” of status.

The other problem here, however, is that colleges and universities seem less interested now in conveying middle-class character qualities such as diligence and thrift and the desire to provide for one’s family than they are in conveying the politically correct qualities of tolerance and liberally-defined compassion.  It is not exactly true that academia is uninterested in character development; it is rather that the “character” they seek is not the character they sought decades ago, and indeed many academics look with open scorn on the traits and habits of the American middle class.

There will always, by definition, be a lower class.  In a free market, there will always be some who make less than others, and the prices of goods and services will generally rise so that the lower class can afford some of them and the middle class can afford most of them.  The first question is how “low” the lower class will be; it is far better to be the in lower class in the United States than, say, in India.  The second other question is how open the ladders into the upper classes will be, and how easy it will be to climb them for those who have the initiative and discipline to do so.

The conservative vision focuses on the qualities and habits that tend to place individuals, and keep them, in the lower class.  Qualities such as shiftlessness, lack of ambition, lack of discipline and restraint, disrespect for authority, etc. — and these qualities tend to lead to poor habits and poor decisions with regard to money, jobs, relationships, and family planning.  The progressive vision tends to focus (especially when it comes to minorities) on the obstacles and lack of resources that make it difficult for lower class individuals to climb the ladder.  The conservative focuses on equality of opportunity, so that those with the inclination and the qualities to climb the ladder can do so.  The progressive focuses on equality of outcome; systemic prejudices against the poor are so great that equality of opportunity can only be an illusion, and so we must assure a fairer distribution of resources.

I find the conservative analysis more compelling because (a) I find character, habits and decisions to be more fundamental to the problem than obstacles and lack of resources, and because (b) I believe it is better to focus on equality of opportunity, since equality of outcome requires government intervention that is more destructive in the long term.