Neglect and Uncle Sam, not the Internet, Killed the Middle Class

In an interview with Salon and his newest book, “digital visionary” (Salon’s words) Jaron Lanier claims that the internet has destroyed the middle class. Kodak employed 140,000 people, while at the point of its sale to Facebook, Instagram employed just 13, and (without much exaggeration) thus, the internet killed the middle class. QED.

What a crock.

Lanier is apparently incapable of stepping back from technological determinism and looking at the actual causes of our ballooning economic inequality — which, to cut to the chase, is primarily a result of our policy choices. Yet the role of government in determining the overall shape of the economy is too often understated or outright ignored by those who wring their hands about growing economic inequality.

With some noted exceptions, those who criticize Lanier still mostly point at the old standby twin bogeymen of automation and outsourcing. The HuffPost chat in which all of the guests are willing to challenge Lanier’s conclusions is typical on this count but hardly alone. To his credit, Buffalo State College economist Bruce Fisher starts heading in the right direction with his concerns about fostering and preserving the political and social engagement of those who are being left out, but he fails to take it the next step and discuss the major policy changes and political neglect that have brought us to this point.

The best explanation that I’ve seen of America’s growing wealth inequality is Winner-Take-All Politics, in which Jacob Hacker and Paul Pierson start with a simple look at other industrialized countries to show that inequality isn’t an inexorable outcome trade and automation. The Germans and Swedes certainly have similar chances to outsource their manufacturing and use technology to reduce labor forces.

Not only does the rest of the industrial world have the internet, too, better telecom policy means they generally have faster connections and cheaper prices. Yet as measured by the Gini Coefficient, a measure of economic inequality, their economies have far more equal distributions of income in take-home pay and wealth.

The wealth distribution in particular is just shocking — the US has a wealth Gini of .801 (where 1.000 is “one person owns everything”), the fifth highest among all included countries and almost exactly the same as the distribution of wealth across the entire planet (.803). Think about that for a second; we have the same radically unequal distribution of capital within the US as among the entire population of the world across all countries — from Hong Kong and Switzerland to Nigeria and Haiti.

With our paper-thin social safety net and highly unequal distribution of income and wealth, we’re left with an economy where tens of millions struggle to get by while wealthy Manhattanites are hiring handicapped “relatives” for $1,000 per day to be able to skip the lines at Disney World.

Across countless major policy areas —health care, education, financial regulation, taxation, support for the unemployed, and many more — the rest of the industrialized world generally does far more to make their societies fairer for all. Our shrinking protections for workers may be the greatest single cause of the shrinking middle class. Of course, this can be done badly — I would certainly not want to swing as far as Italy and Spain, where it’s nearly impossible to fire somebody once they’re a regular, fulltime employee. Yet we should not allow employers to fire union organizers with near impunity. We should not force organizers to wait for months between card check and votes to unionize so that employers can “educate” their captive audience workforce with the most pernicious disinformation and intimidation. We should not sit idly while nearly half of states fail to meet even “minimum workplace-safety inspection goals, due to state budget cuts and reduced staffing.”

It’s true that the middle class is being gutted in the US, but this is primarily due to how our political system turns the act of surviving and thriving into a high-wire act for an ever-larger slice of the population. Laid-off baby boomers, even those with desirable skills, are having a devil of a time finding work in a country where age discrimination is only nominally illegal. Meanwhile, our children attend public schools with an unconscionably unequal distribution of funding, so moving or being born into a more affordable neighborhood may cost kids their futures, too.

Teens and laid off workers alike are told that college is the route to a better future, but the cost of education is skyrocketing as states and the feds slash public investment in higher education. Many families — even many families with health insurance — are one major medical problem away from unemployment and bankruptcy. Since it’s totally legal to use credit reports and current employment status in making hiring decisions, being laid off or losing one’s job after a medical problem can quickly become a death spiral. None of this is due to outsourcing or automation, but is instead the result of a noxious combination of deliberate policy changes (the privileged seeking to strengthen their own hand) and policy drift (the rest of us sitting idly by or being ignored when we do speak up).

Frankly, I’m glad that Lanier has released this book, sloppy though it may be. (The people raving about this book as a carefully wrought masterpiece are deluding themselves — and not, as Lanier accuses others of doing, “diluting themselves”.) This is not primarily because he has some insights here and there, but because we need to talk about the gutting of the middle class as loudly and as frequently as possible. We must do so, however, in a way that examines how our collective decisions have gotten us to this point. That includes making international comparisons with other “laboratories of democracy” to see how we can do better.

After even a cursory glance abroad, we will see that we should stop returning to the too-easy explanations based on globalization and technology. These forces are at play across the world, and the other wealthy industrialized countries have generally not had the same dismal results. The more likely culprit is in the halls of government.

5 thoughts on “Neglect and Uncle Sam, not the Internet, Killed the Middle Class

  1. Have you actually read the book? Seriously, you should read it. The arguments he makes are much more subtle than that Salon interview might lead you to believe, and the point you’re making here about social choices is one that’s actually a central theme of the book.

  2. I guess you were referring to the “wealth gini” coefficient, but this measure is infrequently used.

  3. Wow, thanks for all the feedback! Sorry for my delay in responding.

    Norton: I mentioned and linked to both income and wealth gini figures, and we’re pretty unequal (vs. other industrial countries) on both counts. I thought I was fairly clear that the higher figure is the wealth gini, and you’re right that it is less-used, but for the reasons I pointed out, that figure is (also!) shockingly high.

    RPM: No, I have not read the entire book. Using the Amazon preview, though, I’ve skimmed it to a nontrivial (if not serious) degree, and I have to say that it’s not impressive for its ability to answer the questions presented. I did look for his discussion of labor unions, for instance, and while he has at least something like the beginning of the right idea (they’re a “levee” against less-equal distributions of wealth, and they are under attack from above and below), the technological determinism and lack of international context are both still pretty damnable.

    Obviously, as a professional social scientist, I’m pretty biased toward the methods of social science, but we do things this way for good reason. These are hard questions, and we’re not in the era of Francis Bacon, where only a few people are both smart enough and resource-rich enough to tackle these questions, so the available data and methodological toolkit are limited. If anything, the opposite is true today; it practically requires a graduate education just to learn how to sort through the mountains of data and methods available. Still, even an outsider can get access to at least the bulk of our findings (grad degrees are hard to get; library cards are not), and one should not proceed without making at least a good-faith effort — roughly the same kind of effort that responsible legal scholars make to understand the research by their colleagues from around campus.

    Yet Lanier writes as though the best way to answer these questions is for an intelligent person with some spare time to start from scratch, think really hard, and give his take on current events. Look at his endnotes! With so many libraries worth of valuable, serious research on these very questions, his cites are almost exclusively popular press and internet sources. Little wonder he fails to make a full accounting of what has happened and is still happening to the middle class. No wonder he has such a thin theory about the intersection of technology, economics, and politics.

    Lanier is a great example of what’s wrong with how we discuss the major issues of the day. We have great research on how various policies turn out, but without using that research, we’re all making stabs in the dark. (See: education “reform” movement) The popular press, popular figureheads, and the political class make their careers primarily by ignoring this research and making bold, sweeping statements based on little more than their own hunches and ideologies.

    As I noted, his book is more subtle and has more insights than the interview. But still: Not impressed. And if you’re not even going to bother stepping into library before trying to answer some of the hardest, most complicated issues of our day? Not even going to read the popular-press versions of this research written for outsiders? Then those of us who do this for real don’t have to listen to you.

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