Beyond The Top One Percent

Mark Kleiman writes:

The Washington Post takes a look at the fundamental trend driving American political, social, and economic life: the growing wealth, power, and social isolation of a tiny slice of the population. The whole right-wing shtick about “elites” is designed as a distraction from the fact that a plutocratic elite is chewing up more and more of the nation’s resources and has become more and more able to shape the political process to its selfish, stupid, short-sighted ends.

I’ve grown kind of disillusioned with this line of critique. Consider the CEO of Dean Foods:

The current chief executive, Gregg L. Engles, averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time — two in Texas and two in Colorado. While Douglas’s office sat on the second floor of a milk distribution center, Engles’s stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the company’s $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal.

To be perfectly honest, it seems to me that I’d rather be a tenured professor at UCLA like Mark Kleiman than be CEO of a Dallas-based dairy company like Gregg Engels. The professor does more interesting work, has less day-to-day stress, lives in a much better city, and has much more opportunity to form meaningful social relationships with colleagues and students. I don’t even slightly envy the idea of membership in multiple golf clubs. I’ll admit that I would love access to a corporate jet, but I’d like the flexible schedule and ample opportunity for travel that academia provides even more. Now of course if you offered me Engels’ job, I’d say yes. But I’d try to do it for a year or two, put millions away in the bank, then quit to become an independently wealthy political blogger who’s working on a book about his fake life as a dairy company CEO. That, however, is just one of the many reasons I’m not qualified to be the CEO of business enterprise. The board needs to hire executives who won’t just take the money and quit, even though quitting is exactly what any sensible person with that much cash would do.

In other words, it seems to me that if you’re a waitress or a cab driver or a security guard or a carpenter or a cashier you’re perfectly entitled to regard “the elites” as encompassing the CEO and the professor and the blogger too. Whose life you’d prefer really has to do with your tastes and preferences. The diminishing marginal utility of money means there’s a strong case for redistributing funds from people who have a lot of it to people who’ll get more use from it. But that very same diminishing marginal utility of money means that there’s little reason to believe that inequality in real living standards among the elite is nearly as big as the inequality in income.