Why The Nattering Nabobs Of Nonsense Distract You With TALK About "Race Relations"...,

heisenbergreport |  It’s never capitalism or the hyper-hierarchical society capitalism created in America.

This situation isn’t an accident, of course. The fact is, virtually all of the people who weigh in on the subject — from economists to analysts to bankers to investors — sit somewhere near the top of that hierarchical society. The hierarchy is constructed atop the meritocracy myth, which is used to justify otherwise indefensible manifestations of inequality. Blaming monetary policy for everything obviates the need to face an uncomfortable reality: The hierarchy, like almost all historical hierarchies, isn’t natural. Rather, it’s the product of a system which, over time, evolved and optimized around itself in order to preserve the privileges accorded to the people at (or near) the top of the pyramid.

On the fiscal side of things, a similar cognitive dissonance is observable. Economists, analysts, bankers and market participants of all shapes and sizes habitually bemoan the plight of “Main Street.” How many times have you heard the anecdote about the “average” American not being able to afford a $400 emergency medical bill or home repair? In the same vein, how often have you read derisive takes (always cloaked as concern) bemoaning America’s “bartender and waitress economy”? And so on and so forth.

The concern isn’t always feigned, but it is always disingenuous, if only by accident. The number of economists, analysts, bankers and investors who care about the family that can’t afford to buy a new refrigerator is generally proportionate to the percentage of economists, analysts, bankers and investors who know a family that doesn’t have $400 in spare cash. In other words, zero — or somewhere close to it.

Some of those expressing concern may be genuinely disheartened at the increasingly precarious economic prospects of the American everyman/woman, but generally speaking, one’s position at (or near) the top of the social hierarchy precludes empathy because it doesn’t permit one to acknowledge that the hierarchy itself is almost entirely arbitrary. Consider the following passage from Immanuel Wallerstein’s discussion of universalism:

Universalism means in general the priority to general rules applying equally to all persons, and therefore the rejection of particularistic preferences in most spheres. On the one hand, universalism is believed to ensure relatively competent performance and thus make for a more efficient world-economy, which in turn improves the ability to accumulate capital. Hence, normally those who control production processes push for such universalistic criteria. Of course, universalistic criteria arouse resentment when they come into operation only after some particularistic criterion has been invoked. If the civil service is only open to persons of some particular religion or ethnicity, then the choice of persons within this category may be universalistic but the overall choice is not. If universalistic criteria are invoked only at the time of choice while ignoring the particularistic criteria by which individuals have access to the necessary prior training, again there is resentment. When, however, the choice is truly universalistic, resentment may still occur because choice involves exclusion, and we may get “populist” pressure for untested and unranked access to position. Under these multiple circumstances, universalistic criteria play a major social-psychological role in legitimating meritocratic allocation. They make those who have attained the status of cadre feel justified in their advantage and ignore the ways in which the so-called universalistic criteria that permitted their access were not in fact fully universalistic, or ignore the claims of all the others to material benefits given primarily to cadres. The norm of universalism is an enormous comfort to those who are benefiting from the system. It makes them feel they deserve what they have.

America’s economists, analysts, bankers and (most) investors benefit handsomely from the system and are deeply indebted psychologically to the meritocratic myth. In almost all cases, they fail to acknowledge the extent to which, as Wallerstein put it, “universalistic criteria are invoked only at the time of choice while ignoring the particularistic criteria by which individuals have access to the necessary prior training.”

This makes it impossible to truly empathize with the family for whom a $400 emergency expense is an economic death knell. Sad though it may be, the situation is, in one way or another, attributable to the choices someone made, not to a system which dooms a slim majority of society to economic precarity. That’s how nearly everyone you hear from on the economy thinks about things. Crucially, liberal-minded economists (and politicians) will vociferously deny that accusation. They’ll say they do think the system is at fault. “That was the centerpiece of my campaign!,” they’ll exclaim. Or: “I wrote a whole book about our failed system!” But if you ask them to reconcile the admission that the system doesn’t work with their own success in the same system, rarely will you see any economist or politician shrug their shoulders and say “To be totally honest with you, it’s pure luck.”