In the wake of the college admissions scandal of 2019 the media briefly focused on how the wealthy use their advantages to secure admission to the best schools. As part of the coverage, there was some discussion of opportunity hoarding, a concept developed by Richard Reeves in his Dream Hoarders. The gist of the concept is that opportunity hoarding occurs when parents try to seek advantages for their children in ways that are harmful to others. One extreme example would be parents disparaging children competing with their own for school admission. The practice of opportunity hoarding raises many important moral issues that I will address over the course of a short series of essays. I will begin by discussing the concept of economic mobility in the context of opportunity hoarding.
Americans want to believe in economic mobility—that by hard work, people will be better off than their parents. While people tend to just talk about economic mobility, it is important to distinguish between two types: relative mobility and absolute mobility. In both types, mobility is a matter of moving up or down relative to one’s parents. Relative mobility is measured by comparing the economic ranking of current adults relative to the rankings of their parents. This can be illustrated by an analogy to running road races. When comparing two road races, my relative performance is a measure of my place in the second race relative to how I placed in the first race. If I placed better in the second race than in the first one, then my relative performance was upward. If I placed worse, then my relative performance would be downward. In this analogy, the race is a generation: the first race would correspond to the economic ranking of the parents and the second would be analogous to the current adult’s ranking.
Absolute mobility is a measure of whether the current adults have a higher adjusted (for inflation and such) income at the same age as their parents. Going back to the running analogy, my absolute performance would be a measure of whether I was faster in the second race relative to the first race. As before, the first race is analogous to the parents’ income and the second is analogous to the current adults’ income. While both measure improvement (or decline) there are some important differences.
A critical difference between the two is that relative mobility is a zero-sum game: if someone moves up, someone else must move down. To illustrate, the top 1% can only be 1% of the population: if Sally moves into the 1%, then she pushes someone else down. The analogy to the race illustrates this as well: if I move into first place, then I push someone else into second place. In contrast, absolute mobility need not be zero-sum: my getting more income does not entail that other people get less. Going back to the running analogy, my getting faster between races does not make anyone else slower—in fact, everyone could get faster. Because of this, a country could have little or no relative mobility, but exceptional absolute mobility. Using the running analogy, the same people could place in the top 10 in race after race while everyone is also getting faster. Because of this, distinguishing between the two types of mobility is critical—especially when it comes to opportunity hoarding.
If relative mobility is low, then children almost always stay in the same economic class as their parents. For example, if Sally is born to parents in the top 20%, then she will probably stay there. If it is high, then people are likely to move up (or down) relative to their parents. While it is tempting to think that low relative mobility would always be bad, this is where absolute mobility becomes rather important. If relative mobility is low but absolute mobility is high and widely distributed, then most people will be better off than their parents—though they will still be in the same relative place as their parents. Going back to the running analogy, everybody is running faster—but people keep getting the same places in the races. One could imagine a very desirable society that has very low relative mobility but exceptional absolute mobility. Imagine, if you will, a nation in which Bartholomew Billionaire’s family has always been in the top 1% and owns dozens of houses, several yachts, three private jets and 100 luxury cars. Living in the same country is Paula Poor whose family has always been in the lowest 1% of income earners. But her family now owns a modest residence, her children are attending state college, and she and her husband can easily afford good insurance, good food and the occasional vacation.
This would seem to be far better than a society with high relative mobility but with a history of awful absolute mobility. People readily moving up (and down) from generation to generation might seem good, but if income does not improve (or worsens) from generation to generation, then moving around more freely would be worse than being “stuck” in a good situation. Going back to the running analogy, this would be like be races in which people did not get better (or got worse), but different people made it into the top 10 each race.
A society in which both types of mobility are low would also be a bad scenario: those stuck in the lower income classes would not move up relatively or absolutely. While those in the upper classes would be secure, their lot would also not improve much relative to their parents. This would be a rather stagnant society. But what about real countries, such as the United States?
Currently, the United States has low relative mobility: people tend to stick within the class of their birth. Absolute mobility used to be good, but income has stagnated and currently the United States has lower absolute mobility. As such, many Americans are worse off than their parents and are stuck in their economic class. In this situation, downward relative mobility would be rather bad: one would be moving towards or into an economic class inferior to that of one’s parents—downward mobility.
Those in the upper classes (the top 20%) are aware of what downward mobility entails and, if sensible, they endeavor to prevent this by giving their children all the advantages they can. While doing the best one can for their children is generally the right thing to do, it can become morally problematic when these efforts actively harm the opportunities of others—perhaps by locking them out of moving upward. Richard Reeves and Kimberly Howard have discussed the phenomena of the glass floor—a metaphor for the various factors that keep the children of the well off from sinking into the lower classes. This floor is obviously a ceiling for others—even if there is no malicious intent, to the degree that it keeps the children of the upper classes from descending it also keeps the children of the lower classes from ascending. This is for the obvious reason that relative mobility, like the places in a race, is zero-sum. My victory is your loss. But it should not be simply assumed that this is immoral, hence the need for additional essays on this subject.
I guess the 100 million or so immigrants who have moved here since 1970 must have missed the memo about how the opportunities are being hoarded.
Rather than inequality I think it is far better to focus on poverty. Sure, Jeff Bezos can afford 100 houses and I can only afford one. He owns private jets and I fly coach. But so what? I don’t think he has a better life than me in any meaningful way.
Rather than inequality I think it is far better to focus on poverty.
Yes, We don’t say this enough.
Let me lay it out more strongly and in more detail.
Inequality is not only unavoidable in practice; it is required to improve life for everyone. Inequality is the engine that keeps us all producing food, shelter, power, wealth, iPhones and Macs.
With equality, if I get together with 50 other people to harvest a crop, that crop is immediately taken away from us, and shared among millions, leaving nothing for us. Why then should we harvest that crop?
Imagine there is some societal mechanism that guarantees equality. Then:
a) at any given moment, there is no incentive for me to do anything useful for myself or anyone else, because
i) if I do it, any gains from what I do are immediately shared among millions of people, meaning my personal gain from the action is too small to be measured
ii) if I do not do it, I share in the gains from all the actions of other people anyway
Therefore the incentive to work, to innovate, to develop a business is indistinguishable from zero. QED.
Forced equality leads to us all sitting out on the beach starving to death.
Demogogues can always keep screaming that there is inequality is in the world, as though inequality was in itself a bad thing. That is a fallacy. Inequality is required for life to continue.
We are all, as a society, massively richer than at any time up to 150 years ago, at the Industrial revolution, before which almost everyone in the world subsisted at the level of a dollar a day or less. The internal combustion engine, and then electricity, took the constant requirement for manual labour away. Since then, we have had the leisure to develop technology and quality of life aids undreamed of – electric lights, anaesthetics, antibiotics, long-distance telephone calls, mass production, motorised transport, trains, planes, electronics, the Internet. These were all brought to us by inequality, by people motivated to get ahead,
Inequality becomes bad only insofar as it motivates actions that hurt people – either theft and threat caused by envy, or abuse of power bought by those with more.
The value of the shape of the inequality in any given time and region can be up for debate – is this the optimum spread of inequality required to move the world forward? – but inequality in itself should never is an issue.
I think one of mine was spam trapped, though there were no links.
Freed; no idea why it ended up in detention on the boarder. Maybe Steven Miller is running my spam filter now?