Trying to explain the political divide between rural and working-class Americans on the one hand and urban Americans on the other a lot of blame has been placed on the responsibility of elites for the alienation of rural and non-college educated Americans.
This past year, though, the critique of the elites has targeted a particular segment, namely, the educated elites. One part of this elite comprises college administrators, faculty, and students. The reasons behind this critique vary. Some take issue with the conduct of pro-Palestinian students and faculty. Others resent the push of uncompromising political correctness that comes out of campuses, especially those of elite universities. Another reason is the application of double standards that favor liberal causes and speakers. To some extent the criticism is justified and at any rate it is useful as part of checks and balances. In a democratic society, we all have a great deal of stake in the function of universities as institutions that support free speech and inquiry and safeguard everybody’s right to partake in these privileges without exclusion or harassment.
There is also criticism directed in general against educated Americans, who seem to do a lot better than those living in rural parts of the country and those employed in blue-collar jobs. This overall educated elite allegedly treats rural and less educated Americans with derision and scorn and fails to recognize their values and cultural identity. That the paths of these two groups have diverged in the past several decades is an undeniable reality. However, making sweeping generalizations about the responsibility of educated elites for our current political maladies grossly misses the point.
The declining economic and social status of rural and less educated Americans has much less to do with the squabbles taking place on campuses or the attitudes of educated people and a lot more with economic and social developments for which both conservatives and liberals are responsible. These developments not only affected the relative power and status of rural and blue-collar workers, they also reallocated a greater slice of the costs toward rural and less educated Americans.
Globalization and automation have been the primary factors for the elimination of well-paying manufacturing jobs which in turn contributed to the decay of social and family life in rural areas and past industrial hubs. Most severe has been, however, the transformation of the economy into one relying on knowledge and information with its attendant requirement for more sophisticated technical skills and education. The failure of the decision makers who steered the country toward the new order was their inability or unwillingness to foresee the economic and social costs of these transformations on those who were ill-equipped to survive under the new conditions.
More importantly, the new economic order of neoliberalism accentuated the trend toward increasing income and wealth inequality. By one important measure of income distribution, labor compensation as percent of GDP declined from 49.8% in 1973 to 43.6% in 2021.* Left with a smaller piece of the pie, it is not surprising that the frictions among working-class people intensified. Given their previous privileged position, white workers felt particularly diminished in economic and social status after wages stagnated in the early 1970s and then in the 1990s as manufacturing jobs were off-shored. No wonder their feelings towards minorities of color and immigrants, whom they consider competitors for the smaller income slice, have hardened.
What was then the role of educated elites in these adverse developments? Well, some of the strongest voices in favor of open borders and unregulated markets came out of elite institutions, like the University of Chicago. The neoliberal order was also supported by overoptimistic expectations that drawing adversaries, like China, into the web of capitalist markets, would promote national security and world peace. The experience of the last two decades has dashed these hopes. That’s why we see now a remarkable bipartisan retreat from neoliberalism in favor of industrial policies and tariffs.
The intellectual and pragmatic underpinnings of the neoliberal order also favored education, innovation, and entrepreneurship that in time would place less educated workers at a disadvantage. Let’s not forget that the modern Western world was built on these three pillars. That’s how the 16th century scientific revolution put Europe on a divergent path from other contemporary powers, chiefly China, and led to the West’s world dominance. In addition, conservative and liberal thought has also emphasized individual responsibility, reason, and free agency. That implies that people respond to changing circumstances to maintain their well-being. Therefore, economic rewards and losses are distributed according to one’s effort and merit. This thinking assumes that safety nets are redundant and people accept their diminished fortunes as the result of their choices.
The reality though is that historically what we call progress has been driven by the interests of a minority of innovators, entrepreneurs, and learned people. The expectation that the rest of society will respond to the changes ushered only by the few reflects their own aspirations and assumptions. The fact that even in our times close to two thirds of working age people in the Western world lack college education should tell us something. We should recognize that for a variety of economic, social, and political reasons a lot of people are not given the opportunities to move over to the winning side. For others, it is a lifestyle choice that should not condemn them to substandard living.
That’s why Acemoglu and Johnson, whose book I highlighted in my last blogpost, argue that innovations and changes in general do not represent true progress unless they ensure that we all participate in their benefits. In other words, only when new directions into the future are made with the goal of shared prosperity we make real progress. Our political malaise these days has a lot to do with our failure to chart our future path with this goal in mind. For this failure, we need to look much beyond the behavior of educated elites.
*Labor income participation in the GDP or the Gross Domestic Income can vary by source. However, all sources show a decline over the past fifty years.
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