A plague on both your houses part 4: Mutant Republicans
It was not any kind of left-winger, but the stalwart conservative Paul Jacob, who, in his April 3, 2005 column, gave a symptomatic account of changes in American society. His column is all matter, and I give it (save for a bit of ingenuous self-promotion) as it was published:
Though March is gone, the madness of the NCAA basketball tournament continues this weekend with the Final Four. Yet, lost in all that fun madness is this scandal: According to the University of Illinois, some Fighting Illini fans are more important than others.
So far, the Illini have weathered the scandal handily. The story broke weeks ago . . . and fizzled. It was of little note when they won the Big Ten and went on to win their first games of the NCAA tournament. And, after coming back from 13 points down with just minutes to play against Arizona, and then winning in overtime to earn a spot in the Final Four, well, hardly a word has been uttered about egalitarianism or privilege. Instead, all the talk has been about defense and Illinois' three-guard line-up.
But, what about the scandal over ticket sales?
Now, I'm not talking about the policy to sell tickets game-by-game, way in advance. Dropping the season ticket scheme was probably a smart move. It certainly helped farsighted fans get tickets - and other farsighted individuals to engage in a lucrative scalpers' biz, on the streets and on eBay.
That's just supply and demand. To complain about that is like complaining how unfair it is that tall people have such an advantage making dunks and grabbing rebounds.
No, the ticket sales I'm talking about are the cheap ones set aside for the people who really count. The politicians. And those of the politicians' bloodlines.
When the ticket-set-aside story broke in late February, I noticed some pretty important Fighting Illini fans. Former Governor Jim Edgar bought over 60 tickets this season to the team's games. Illinois State Representatives Roger Eddy and Naomi Jakobsson bought over 30 each, while Democratic Senator Deanna Demuzio and Republican Kurt Granberg bought 16 each. In all, dozens of politicians bought tickets, some right before the games.
It's nice to see these highfalutin politicians mingling with the people in a beloved pastime, eh?
Well, no.
These "more equal" fans bought their tickets for $30 or less, outside the normal ticketing system, with the help of high-muckety-mucks at the University. The administration sets aside a certain number of tickets to go to its trustees and supporters and special friends. And the politicians who vote for the institution's programs are indeed special. Very.
Most fans, on the other hand, have to wait in line for tickets, pay a lot more at game, or go to scalpers who charge even more yet. Most must watch from home.
Now, this isn't the biggest scandal of our age. But it is a good marker of how Big Government institutions make room for a special class of people - legislators and governors and such - while treating the taxpayers who do the actual funding as little more than cash cows.
The University defended its policy, of course. It's just a few tickets, 147 for each home game.
Thankfully, some object. "I don't think it's right legislators can get tickets where the general public can't with a public entity involved. That's just wrong. It's a perk that shouldn't be there," Rep. Jack Franks, chairman of the House State Government Administration Committee was quoted, "and one I was unaware of," he added, ominously. Which is worse, I wonder, the fact that some politicians were getting cheap tickets, or the fact that others didn't know about it?
Well, I choose to believe Franks is on the side of the angels. At least he's complaining. A spokeswoman for Senate Minority Leader Frank Watson defended the system nicely, saying "I'm sure higher ed funding, the U. of I., medical malpractice and the state budget were discussed. . . ."
Hmmm, noisy place for that discussion.
If this ticket policy were nothing more than a special frill for those who do the University big legislative favors - a political bribe, say - then maybe one could see the point of the policy. Maybe. If you were awfully tolerant and forgiving and not at all suspicious of power . . . and in position somehow to get the cheaper tickets.
But then why does the University grant tickets to the family members of former governors? The son of former Governor George Ryan was among the biggest ticket users. What possible use was he to the University? And the fact that his father is under indictment, is that not supposed to matter to us, either?
There is a ruling class in America, and there is a paying class - that's us. It shouldn't take an advanced degree in sociology or economics to figure this out.
America's class system is firmly in place. Read all about it in the sports section.
Well, yes, it is. And the thing is, it is in a way that it was not fifty years ago. Conservatives of the Jacob kind see it happening mainly in America’s self-replicating political class, and Jacob reports with horror that 98% of incumbents who stand for re-election get elected. Their remedy is term limitations. But quite frankly, term limitations are a joke. They would only mean that a member of the chosen circle would do his two terms as a state senator, then his two terms as mayor of the state’s largest city, then his two terms as federal representative, then his two terms as governor… four year term after four year term, it soon mounts up. Clearly, this is no way to deal with the problem of a self-replicating, inward-looking aristocracy. Indeed, it might strengthen it. The essence of an oligarchy is solidarity: nobody must be much bigger than the rest. A man who keeps getting elected because his constituency trusts him and has confidence in his record may well become a maverick on the national or state stage; which a man who has to depend on the favour of a party machine for the next step in his career never will.
At any rate, politics is only a symptom. The occupation of power and prestige by determined elites resolute to establish a permanent position by “confidential” means does not begin with politics: it begins with business, taking advantage of the essentially ownerless nature of the modern business corporation. Paul Krugman: The messy divorce proceedings of Jack Welch, the legendary former C.E.O. of General Electric, have had one unintended benefit: they have given us a peek at the perks of the corporate elite, which are normally hidden from public view. For it turns out that when Welch retired, he was granted for life the use of a Manhattan apartment (including food, wine and laundry), access to corporate jets and a variety of other in-kind benefits, worth at least $2 million a year. The perks were revealing: they illustrated the extent to which corporate leaders now expect to be treated like ancien regime royalty. In monetary terms, however, the perks must have meant little to Welch. In 2000, his last full year running G.E., Welch was paid $123 million, mainly in stock and stock options.
Is it news that C.E.O.'s of large American corporations make a lot of money? Actually, it is. They were always well paid compared with the average worker, but there is simply no comparison between what executives got a generation ago and what they are paid today. Over the past 30 years most people have seen only modest salary increases: the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That's about a 10 percent increase over 29 years -- progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers.
New classes do not rise by large-scale design from some outside agency. They are the result of one, ten, a hundred, a million individuals, seeing an opportunity and taking it. In the last forty or fifty years, the CEOs not only of the United States, but of the world at large, have made two important discoveries. First, that their companies have effectively no owner. The faceless mob of shareholders is generally made up of financial institutions that rarely stay with a company consistently, preferring to make its money by a complicated process of gambling on the rise or decline of the price of stock - which itself has only a general and careless relationship with the real profitability of the company. Indeed, skilful shareholders can make money out of the fall as well as the rise of stock. The second discovery is closely related to the first: the only people directors have to please is other directors - and it is incredibly easy to scratch each other’s back.
Before this earth-shaking discovery, the CEO who wanted to seriously tap into the enormous streams of money that passed through the organisation they managed - and of which they were, supposedly, employees - had a number of options: embezzle, do some insider trading along with a complacent stockbroker, direct corporate contracts to favoured clients. The trouble is that all these things are illegal, and most are quite risky. You may go to jail, be sacked in disgrace, even fail to make any money. But to simply treat the company as a milch cow from which to draw ever fatter paychecks, perks and pensions is perfectly legal. All it takes is an informal agreement with a few board members that if they back my wage rise in my company’s board meeting, I will back theirs in theirs. For I am too, of course, a director in a couple of other dozen corporations.
This has a further corollary. When the road to riches is illegal and dangerous, only a comparatively few take it. Embezzlement, fraud, insider trading, are going to remain minority traditions among the leaders of business, so long as the laws against them are enforced. But the game of mutual raises on top wages is both safe and incredibly rewarding. Laws against it not only do not exist but are very hard to frame. And it follows that as soon as the mechanism takes hold here or there, it will spread like an oil slick. Krugman’s observation, which I quoted earlier, bears repetition: Over the past 30 years most people have seen only modest salary increases: the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That's about a 10 percent increase over 29 years -- progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers.
An instance - from outside America - of this entrenchment of the director class in action (from the British magazine PRIVATE EYE, no.1170):
Although the Financial Times gave copious coverage to the recent report highlighting increases in top directors' pay which couldn't be justified by the performance of their companies, one of the most grotesque examples was off-limits to FT hacks - its own boardroom.
In 2000 the newspaper made record profits of £81 m. Last year this was just £2m, following hefty losses in 2003 and 2004. Performance has also been dismal in other parts of the Pearson empire, which owns the FT, with the result that over six years the company's share price has dropped from a high of above E20 to its current level of under £8.
But you'd never guess it from the pay packets of the two principal architects of this calamity. In 2000 FT chairman Sir David Bell earned £539,000 in pay and bonuses; by last year this had leapt to £972,000. Group chief executive Dame Marjorie Scardino saw her annual pay and bonuses double during the same period, from £938,000 to £1,810,000.
Unlike other shareholders these two have also been cushioned from the huge fall in the share price because in addition to their bonuses, the company regularly gives them large numbers of extra shares. Since 2000 the number of shares owned by Bell has risen from 14,208 to 122,518, while Scardino's increased from 28,334 to 212,160.
Meanwhile, despite last month's cull of 54 hacks, plans are being hatched for yet more redundancies on the editorial floor.
Evidently, then, this process has nothing to do with corporate success. I do not deny that some CEOs have done brilliant things and helped companies, but, as the case of Pearsons shows, lousy directorship is equally well rewarded. It is rewarded because, as with the winning and losing politicians and politicians’ relatives who were allowed to profiteer on Fighting Illini ticket touting, what was taking place was independent of success or failure. It had to do with being in the right place. If you are at the top level of a company, you can milk it: whether it does well or badly, its veins still throb with money - and you can take the money out and do what you want with it. Then, if things really go badly, you manage a merger with your most successful competitor and retire with a fat packet of the competitor’s shares, now made more valuable by the successful merger, and a pleasant executive retirement package.
Anyone who says that executive lifestyles and behaviour in this day and age have anything to do with market forces and market discipline have their heads in the clouds. The management class may suffer from infighting, but it does not suffer from anything that may happen to the company. They are insulated against failure by retirement packages, mutually supportive behaviour, and the practice of mergers. Employees get sacked; CEOs retire with a clutch of directorships, a few seats on quangos, and the odd consultancy. The important thing to get on in this part of society is not competence in business and finance; you are expected to have that before you ever start, and people are to a considerable extent interchangeable - a fact they recognize themselves, by frequently and willingly moving between different companies and fields, from electricity to sweets, from contracting to publishing, to advance their careers. What is really essential is to be agreeable and socially adept. The few stories of utter ruin one hears from this stratum of society are not to do with business success; they have to do with the deliberate rejection of one person by his or her own social circle.
One instance I knew well. Years ago there was a brash, opinionated, competent, hard-working manager who had worked his way pretty much to the gates of the director class of one of Italy’s largest conglomerates. The only trouble is, people around him hated him - and he did not even realize it. So, just as top management role and directorships seemed to be the next step for him, his colleagues of equal and higher rank conspired to shove him on to an associated company which, they knew and he did not, was about to go reverberatingly bust. The thing sank with him in charge; and it took him weeks to realize that the supposed friends who had engineered this opportunity for him, instead of trying to set up an exit for him, were busily making things worse. Well, in many ways this man asked for it. His egotism, arrogance, insensitivity, his expectation that everyone else had to fit into his schemes, had driven even pleasant people mad. Nevertheless this disaster was engineered on him; and he never recovered from it.
Let nobody tell me that this sort of thing has anything to do with market forces. Market forces in modern big business bureaucracies have the value of the legend of early Rome in historical Rome: they are a legend. Rome, a great market town founded as a fortress to guard a major river harbour at the end of the most important trade route in the region, was rich and commercial from the word go; and in the third century, when it began to turn into an empire, it was already dense with luxury products, rich men and their pampered offspring. Read Plautus and reflect on the society he describes. So the Romans - Cato the Elder was younger than Plautus - collectively conceived a great origin legend featuring poor, hardy warrior-peasants living fiercely simple lives and speaking and acting with grim, Spartan simplicity; this served both to reproach and to justify their current wealth and not infrequent dissipation. (We have evidence of a homosexual underworld in Rome from early on.) By the same token, pampered multi-millionaires with their backs safely protected by generous retirement benefits like to imagine themselves as fierce warriors of the boardroom and the market, giving and taking no quarter, driving their ships of business over the stormy seas of market forces, staking everything on the success of their visionary conceptions. The truth is that security is the first thing they have sought from their careers - personal security.
The rise of the New Aristocracy may or may not have began with CEOs, but it does not end with them. Krugman again: The explosion in C.E.O. pay over the past 30 years is an amazing story in its own right, and an important one. But it is only the most spectacular indicator of a broader story, the reconcentration of income and wealth in the U.S…. Census data clearly show a rising share of income going to the top 20 percent of families, and within that top 20 percent to the top 5 percent, with a declining share going to families in the middle... In fact, the census data understate the case, because for technical reasons those data tend to undercount very high incomes -- for example, it's unlikely that they reflect the explosion in C.E.O. compensation. And other evidence makes it clear not only that inequality is increasing but that the action gets bigger the closer you get to the top. That is, it's not simply that the top 20 percent of families have had bigger percentage gains than families near the middle: the top 5 percent have done better than the next 15, the top 1 percent better than the next 4, and so on up to Bill Gates.
Studies that try to do a better job of tracking high incomes have found startling results. For example, a recent study by the non-partisan Congressional Budget Office used income tax data and other sources to improve on the census estimates. The C.B.O. study found that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10 percent gain for families near the middle of the income distribution… Since the 1970's… income gaps have been rapidly widening… the top 10 percent contains a lot of people whom we would still consider middle class, but they weren't the big winners. Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million… in 1970 the top 0.01 percent of taxpayers had 0.7 percent of total income -- that is, they earned ''only'' 70 times as much as the average, not enough to buy or maintain a mega-residence. But in 1998 the top 0.01 percent received more than 3 percent of all income. That meant that the 13,000 richest families in America had almost as much income as the 20 million poorest households; those 13,000 families had incomes 300 times that of average families.
And let me repeat: this transformation has happened very quickly, and it is still going on. You might think that 1987, the year Tom Wolfe published his novel ''The Bonfire of the Vanities'' and Oliver Stone released his movie ''Wall Street,'' marked the high tide of America's new money culture. But in 1987 the top 0.01 percent earned only about 40 percent of what they do today, and top executives less than a fifth as much. The America of ''Wall Street'' and ''The Bonfire of the Vanities'' was positively egalitarian compared with the country we live in today.
…We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ''eminence of excess,'' an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts...
This is not a by-product of America’s generalized wealth. America was wealthy, indeed perhaps wealthier, when her richest men were not so wealthy - or so ostentatious, at least. Nobody imagines that Americans in the fifties or sixties starved. In point of fact, they were an image of prosperity for the entire world: this was a time when people from Europe to the Far East really did wake up in the morning and say to themselves, I want to be more like an American. I came in at the end of that period, but I can still remember that in my childhood - the sixties - people sang Bernstein’s “I wanna be in Ame-ri-ca” seriously. I remember at least two more songs with the same content, whose lyrics are much too embarrassing to repeat today. Now Republican columnists wonder why Europeans detest them - and foolishly ascribe it to European jealousy. Krugman again: …the America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich… Daily experience confirmed the sense of a fairly equal society. The economic disparities you were conscious of were quite muted. Highly educated professionals -- middle managers, college teachers, even lawyers -- often claimed that they earned less than unionized blue-collar workers. Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work… The middle-class America of my youth was another country…
Here, then, we have the root of the rage from the Democrat point of view - Krugman is a fanatical Democrat, and in future articles I shall find reason to criticize him severely. The America of my youth was another country. Indeed it was: a country without an aristocracy. A few grand families such as the Kennedys and the Fords might continue to dominate the news, conspicuous consumption might be the rule in a few crazed areas such as Hollywood, but an aristocracy is not something so small. An aristocracy is pervasive: it dominates the nation where it exists, and its influence may be found everywhere, because its instinct is to occupy every part of society that commands not only money, but respect. (That is why one-fourth of Britain’s 500 richest men, according to a recent Times survey, have been in the Brigade of Guards; military service in a select unit may not contribute much by way of pay, but it offers high rewards in terms of respect, useful contacts, and training in that all-important social ability.)
I call this the New Aristocracy for a very good reason: that this segment of the population sustains its position in society not by any distinguishable service they render, but by having occupied the summit of public and private institutions, and by mutually backing their occupation of said summit and their exploitation of it for private advantage. The wealth and privilege of this social group becomes institutional and quite separate from any function it may perform other than conspicuous consumption. And, coincidentally, economic theories arise (two words: trickle, down) to justify this rentier position.
What I describe is nothing new. It is the way aristocracies worked all over the West for most of the historic past. However, a century ago, a small number of countries - Britain and the British Dominions, France, the United States, Italy - which had successfully negotiated the painful transition to universal franchise and full democracy, decided to break up this class of hereditary wealth. The means they employed was the death tax, or inheritance tax. This did not prevent an individual from becoming mightily rich; it did not even prevent him (or her) from passing a comfortable living to their children; but it worked strongly against the continued existence of an institutionally rich, as opposed to merely comfortable, class.
Now, not all this new class of institutional profit-takers is Republican; we will see that the Democrat Party has also been changed by similar influences. But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business. It is, after all, never too hard to turn from a party of the respectable middle class to a party of the respected (or respect-purchasing) Upper Middle Class, and then of the Upper Class with no hint of middle and no great need for respectability. It went up that particular alley in the nineteen-twenties; but it proved a blind alley. Now, as Krugman rightly says, it has happened again. I think it should be clear what I am saying, and why I am bringing in the early-twentieth-century invention of the inheritance tax or death tax. This was the tax whose abolition was central to Bush II’s policies, and for which, we remember, he was willing to throw his Christian allies overboard. This was the tax whose abolition caused the protests of Warren Buffet and Bill Gates, exactly because of this: that these two absolutely typical instances of the Self-Made Man were profoundly opposed to the idea of inheriting, not just a comfortable social position, but vast wealth and privilege. The economic justification for it, repeatedly waved by “conservative” columnists, is equally ghostly. The idols of the conservative movement - the international markets - have shown what they think of it, and of the supposedly red-hot (if you listen to Republicans) American economy: they have hammered the US Dollar into a condition of weakness and submission that it had not seen since 1914. They have raised high the yen, the renminbi, the rupee; above all, they have raised to the stars that despised artificial creation of socialist dogmatists, the Euro. I am no worshipper of the all-holy Markets myself; but is it not interesting how those who make a fetish of Market Forces turn a completely deaf ear to them when they bear a message they do not like.
Nevertheless, one thing ought to be made clear. While the rise of an aristocracy may be unwelcome or even disgusting to people who, like me, believe in the republican democratic ideal, it is nevertheless not illegitimate or unlawful. As things are at present, this is simply a feature of the landscape, to which we have to get used. Unless society makes up its mind not to tolerate such a presence in its midst, and to make use of suitable legislative tools to break it, then an aristocracy there will be, and it will be a legitimate presence with legitimate interests. And in future chapters, I will show why it is much more difficult for society to make such a collective decision now than it was a century ago.
It is perfectly clear that the governmental action of the Republican Party at least since Reagan, and to a much higher degree under Bush II, has been intended to support and entrench the new aristocracy at the expense of the rest of the country. The Republican Party of today has become, what it had never been before, a variation on a European right-wing or conservative party. There is still a large difference, however. While a British Tory or Italian Liberal or German National Liberal, in the days of their greatness, worked mainly to support the paternal rule of an aristocracy that had existed for centuries, the American Republicans are working at forming one. And this is another reason why they are so hated by one half of the electorate. Old entrenched aristocracies learn to justify their power by taking a genuinely paternal and supportive interest in their inferiors, developing a notion of noblesse oblige, a sense that the lesser orders depend on them. That is why the Welfare State was invented and developed its greatest efficiency and perfection in the most aristocratic countries in Europe - Germany, Sweden, and to a lesser extent England. If the new aristocracy endures, perhaps in a century or two they will learn to excuse their power in similar ways. But at present, they are at the predatory stage of their self-establishment; and, having grown up with a vague notion that entrenched wealth is wrong in itself, they are also busy blinding themselves to what they are doing and generating the most ridiculous excuses (chiefly about the chimera of “market forces”) to justify their seizure of power. To opponents not blinded by the same process, the hypocrisy is all too clear. And there is even worse. Anyone who is not a committed Republican can only watch in disgust and horror when their supporters in the media, ever ready to back the economic value and moral justice of the formation of immense private fortunes and social networks, start prating about the position of entrenched privilege of… Federal and State employees, as compared to privately or self-employed citizens. To describe this as an attempt to drive a wedge between two sections of the middle class and build one of them up as a bogeyman for the other is, I think, all too obvious a criticism; and there is also the hatred of the aristocrat for the petty little bureaucrat who is the only figure in society that can still get in the way of his grand plans. But I think there is something other than that. It is a genuine displacement activity, a psychological mechanism to shift on to a third party the inevitable, instinctive disgust and the inevitable, instinctive sense that these advantages are not deserved, that must strike in the gut of anyone who has been brought up in a republican and egalitarian tradition, when their minds have to take in the rise of a new aristocracy. I do not, that is, think that these feelings are fraudulent; I think that they are real; and I think that they are merely shifted on to a convenient target - after all, nobody likes a “faceless” bureaucrat - because they contrast with the basic attitude taken by the person concerned.
Naturally, as this process develops, the group of real beneficiaries of Republican policies grows smaller and smaller. The focus of party policy has shifted from the Republican suburban householder who had looked to the Party to help them with their practical problems, to the top manager who is building himself a country mansion - and, if he is of a travelling disposition, flats in a few foreign cities - with the millions a year he earns, so to speak, from his having managed to place himself at the head of a public corporation. Obviously, from the electoral point of view, this ought to be a suicidal strategy. One of the strengths of democracy is that one millionaire, however rich, has no more votes than one policeman or one schoolteacher; and one would think that to run a party mainly for their advantage would not be to the advantage of the party. However, that the formation of an hereditary aristocracy involves the formation or enlargement of interests going well beyond those of the owners of the wealth themselves. There are Krugman’s “armies of servants,” the large areas of business which depend on supplying their conspicuous consumption or protecting their interests. (Let us not be imprecise: when a man owns tens of millions, he inevitably has plenty of legitimate interests to defend. Whether he has any business owning those tens of millions is another matter.) There are those who aspire to reach the same level, and have a good chance of doing so; those who delude themselves that they have; and those who teach their children, care for their properties, and manage their investments; and finally, there is that unaccountable part of mankind that manages to convince itself, without having any personal interest in doing so; that this class has a perfect right to take advantage of its position, and that to prevent them from taking advantage would have all sorts of terrible consequences. When we sum up all these areas of common interest, convinction and desire, we come to realize that we must reckon not only with the infinitesimal part of society that actually forms this new class, but with considerable areas which set store on it.
Even so, nobody in their right minds would imagine that this could add up to an election-winning coalition. Even in Europe in the old days, the conservative parties were never majorities, except when the folly or misfortune of their opponents gave them an advantage. What has so far saved the Republicans has been, exactly, the folly, and, what is more, the structural inability of the Democrats to reach out to a large, indeed election-winning part of the population; a part which has remained Republican, or indeed moved over to the Republicans, purely by default, and in spite of deep doubts and justified mistrust. I mean, of course, the values voters. And why the Democrats are bound to behave in so suicidal a way is something I will deal with in my next article.
Though March is gone, the madness of the NCAA basketball tournament continues this weekend with the Final Four. Yet, lost in all that fun madness is this scandal: According to the University of Illinois, some Fighting Illini fans are more important than others.
So far, the Illini have weathered the scandal handily. The story broke weeks ago . . . and fizzled. It was of little note when they won the Big Ten and went on to win their first games of the NCAA tournament. And, after coming back from 13 points down with just minutes to play against Arizona, and then winning in overtime to earn a spot in the Final Four, well, hardly a word has been uttered about egalitarianism or privilege. Instead, all the talk has been about defense and Illinois' three-guard line-up.
But, what about the scandal over ticket sales?
Now, I'm not talking about the policy to sell tickets game-by-game, way in advance. Dropping the season ticket scheme was probably a smart move. It certainly helped farsighted fans get tickets - and other farsighted individuals to engage in a lucrative scalpers' biz, on the streets and on eBay.
That's just supply and demand. To complain about that is like complaining how unfair it is that tall people have such an advantage making dunks and grabbing rebounds.
No, the ticket sales I'm talking about are the cheap ones set aside for the people who really count. The politicians. And those of the politicians' bloodlines.
When the ticket-set-aside story broke in late February, I noticed some pretty important Fighting Illini fans. Former Governor Jim Edgar bought over 60 tickets this season to the team's games. Illinois State Representatives Roger Eddy and Naomi Jakobsson bought over 30 each, while Democratic Senator Deanna Demuzio and Republican Kurt Granberg bought 16 each. In all, dozens of politicians bought tickets, some right before the games.
It's nice to see these highfalutin politicians mingling with the people in a beloved pastime, eh?
Well, no.
These "more equal" fans bought their tickets for $30 or less, outside the normal ticketing system, with the help of high-muckety-mucks at the University. The administration sets aside a certain number of tickets to go to its trustees and supporters and special friends. And the politicians who vote for the institution's programs are indeed special. Very.
Most fans, on the other hand, have to wait in line for tickets, pay a lot more at game, or go to scalpers who charge even more yet. Most must watch from home.
Now, this isn't the biggest scandal of our age. But it is a good marker of how Big Government institutions make room for a special class of people - legislators and governors and such - while treating the taxpayers who do the actual funding as little more than cash cows.
The University defended its policy, of course. It's just a few tickets, 147 for each home game.
Thankfully, some object. "I don't think it's right legislators can get tickets where the general public can't with a public entity involved. That's just wrong. It's a perk that shouldn't be there," Rep. Jack Franks, chairman of the House State Government Administration Committee was quoted, "and one I was unaware of," he added, ominously. Which is worse, I wonder, the fact that some politicians were getting cheap tickets, or the fact that others didn't know about it?
Well, I choose to believe Franks is on the side of the angels. At least he's complaining. A spokeswoman for Senate Minority Leader Frank Watson defended the system nicely, saying "I'm sure higher ed funding, the U. of I., medical malpractice and the state budget were discussed. . . ."
Hmmm, noisy place for that discussion.
If this ticket policy were nothing more than a special frill for those who do the University big legislative favors - a political bribe, say - then maybe one could see the point of the policy. Maybe. If you were awfully tolerant and forgiving and not at all suspicious of power . . . and in position somehow to get the cheaper tickets.
But then why does the University grant tickets to the family members of former governors? The son of former Governor George Ryan was among the biggest ticket users. What possible use was he to the University? And the fact that his father is under indictment, is that not supposed to matter to us, either?
There is a ruling class in America, and there is a paying class - that's us. It shouldn't take an advanced degree in sociology or economics to figure this out.
America's class system is firmly in place. Read all about it in the sports section.
Well, yes, it is. And the thing is, it is in a way that it was not fifty years ago. Conservatives of the Jacob kind see it happening mainly in America’s self-replicating political class, and Jacob reports with horror that 98% of incumbents who stand for re-election get elected. Their remedy is term limitations. But quite frankly, term limitations are a joke. They would only mean that a member of the chosen circle would do his two terms as a state senator, then his two terms as mayor of the state’s largest city, then his two terms as federal representative, then his two terms as governor… four year term after four year term, it soon mounts up. Clearly, this is no way to deal with the problem of a self-replicating, inward-looking aristocracy. Indeed, it might strengthen it. The essence of an oligarchy is solidarity: nobody must be much bigger than the rest. A man who keeps getting elected because his constituency trusts him and has confidence in his record may well become a maverick on the national or state stage; which a man who has to depend on the favour of a party machine for the next step in his career never will.
At any rate, politics is only a symptom. The occupation of power and prestige by determined elites resolute to establish a permanent position by “confidential” means does not begin with politics: it begins with business, taking advantage of the essentially ownerless nature of the modern business corporation. Paul Krugman: The messy divorce proceedings of Jack Welch, the legendary former C.E.O. of General Electric, have had one unintended benefit: they have given us a peek at the perks of the corporate elite, which are normally hidden from public view. For it turns out that when Welch retired, he was granted for life the use of a Manhattan apartment (including food, wine and laundry), access to corporate jets and a variety of other in-kind benefits, worth at least $2 million a year. The perks were revealing: they illustrated the extent to which corporate leaders now expect to be treated like ancien regime royalty. In monetary terms, however, the perks must have meant little to Welch. In 2000, his last full year running G.E., Welch was paid $123 million, mainly in stock and stock options.
Is it news that C.E.O.'s of large American corporations make a lot of money? Actually, it is. They were always well paid compared with the average worker, but there is simply no comparison between what executives got a generation ago and what they are paid today. Over the past 30 years most people have seen only modest salary increases: the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That's about a 10 percent increase over 29 years -- progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers.
New classes do not rise by large-scale design from some outside agency. They are the result of one, ten, a hundred, a million individuals, seeing an opportunity and taking it. In the last forty or fifty years, the CEOs not only of the United States, but of the world at large, have made two important discoveries. First, that their companies have effectively no owner. The faceless mob of shareholders is generally made up of financial institutions that rarely stay with a company consistently, preferring to make its money by a complicated process of gambling on the rise or decline of the price of stock - which itself has only a general and careless relationship with the real profitability of the company. Indeed, skilful shareholders can make money out of the fall as well as the rise of stock. The second discovery is closely related to the first: the only people directors have to please is other directors - and it is incredibly easy to scratch each other’s back.
Before this earth-shaking discovery, the CEO who wanted to seriously tap into the enormous streams of money that passed through the organisation they managed - and of which they were, supposedly, employees - had a number of options: embezzle, do some insider trading along with a complacent stockbroker, direct corporate contracts to favoured clients. The trouble is that all these things are illegal, and most are quite risky. You may go to jail, be sacked in disgrace, even fail to make any money. But to simply treat the company as a milch cow from which to draw ever fatter paychecks, perks and pensions is perfectly legal. All it takes is an informal agreement with a few board members that if they back my wage rise in my company’s board meeting, I will back theirs in theirs. For I am too, of course, a director in a couple of other dozen corporations.
This has a further corollary. When the road to riches is illegal and dangerous, only a comparatively few take it. Embezzlement, fraud, insider trading, are going to remain minority traditions among the leaders of business, so long as the laws against them are enforced. But the game of mutual raises on top wages is both safe and incredibly rewarding. Laws against it not only do not exist but are very hard to frame. And it follows that as soon as the mechanism takes hold here or there, it will spread like an oil slick. Krugman’s observation, which I quoted earlier, bears repetition: Over the past 30 years most people have seen only modest salary increases: the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That's about a 10 percent increase over 29 years -- progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers.
An instance - from outside America - of this entrenchment of the director class in action (from the British magazine PRIVATE EYE, no.1170):
Although the Financial Times gave copious coverage to the recent report highlighting increases in top directors' pay which couldn't be justified by the performance of their companies, one of the most grotesque examples was off-limits to FT hacks - its own boardroom.
In 2000 the newspaper made record profits of £81 m. Last year this was just £2m, following hefty losses in 2003 and 2004. Performance has also been dismal in other parts of the Pearson empire, which owns the FT, with the result that over six years the company's share price has dropped from a high of above E20 to its current level of under £8.
But you'd never guess it from the pay packets of the two principal architects of this calamity. In 2000 FT chairman Sir David Bell earned £539,000 in pay and bonuses; by last year this had leapt to £972,000. Group chief executive Dame Marjorie Scardino saw her annual pay and bonuses double during the same period, from £938,000 to £1,810,000.
Unlike other shareholders these two have also been cushioned from the huge fall in the share price because in addition to their bonuses, the company regularly gives them large numbers of extra shares. Since 2000 the number of shares owned by Bell has risen from 14,208 to 122,518, while Scardino's increased from 28,334 to 212,160.
Meanwhile, despite last month's cull of 54 hacks, plans are being hatched for yet more redundancies on the editorial floor.
Evidently, then, this process has nothing to do with corporate success. I do not deny that some CEOs have done brilliant things and helped companies, but, as the case of Pearsons shows, lousy directorship is equally well rewarded. It is rewarded because, as with the winning and losing politicians and politicians’ relatives who were allowed to profiteer on Fighting Illini ticket touting, what was taking place was independent of success or failure. It had to do with being in the right place. If you are at the top level of a company, you can milk it: whether it does well or badly, its veins still throb with money - and you can take the money out and do what you want with it. Then, if things really go badly, you manage a merger with your most successful competitor and retire with a fat packet of the competitor’s shares, now made more valuable by the successful merger, and a pleasant executive retirement package.
Anyone who says that executive lifestyles and behaviour in this day and age have anything to do with market forces and market discipline have their heads in the clouds. The management class may suffer from infighting, but it does not suffer from anything that may happen to the company. They are insulated against failure by retirement packages, mutually supportive behaviour, and the practice of mergers. Employees get sacked; CEOs retire with a clutch of directorships, a few seats on quangos, and the odd consultancy. The important thing to get on in this part of society is not competence in business and finance; you are expected to have that before you ever start, and people are to a considerable extent interchangeable - a fact they recognize themselves, by frequently and willingly moving between different companies and fields, from electricity to sweets, from contracting to publishing, to advance their careers. What is really essential is to be agreeable and socially adept. The few stories of utter ruin one hears from this stratum of society are not to do with business success; they have to do with the deliberate rejection of one person by his or her own social circle.
One instance I knew well. Years ago there was a brash, opinionated, competent, hard-working manager who had worked his way pretty much to the gates of the director class of one of Italy’s largest conglomerates. The only trouble is, people around him hated him - and he did not even realize it. So, just as top management role and directorships seemed to be the next step for him, his colleagues of equal and higher rank conspired to shove him on to an associated company which, they knew and he did not, was about to go reverberatingly bust. The thing sank with him in charge; and it took him weeks to realize that the supposed friends who had engineered this opportunity for him, instead of trying to set up an exit for him, were busily making things worse. Well, in many ways this man asked for it. His egotism, arrogance, insensitivity, his expectation that everyone else had to fit into his schemes, had driven even pleasant people mad. Nevertheless this disaster was engineered on him; and he never recovered from it.
Let nobody tell me that this sort of thing has anything to do with market forces. Market forces in modern big business bureaucracies have the value of the legend of early Rome in historical Rome: they are a legend. Rome, a great market town founded as a fortress to guard a major river harbour at the end of the most important trade route in the region, was rich and commercial from the word go; and in the third century, when it began to turn into an empire, it was already dense with luxury products, rich men and their pampered offspring. Read Plautus and reflect on the society he describes. So the Romans - Cato the Elder was younger than Plautus - collectively conceived a great origin legend featuring poor, hardy warrior-peasants living fiercely simple lives and speaking and acting with grim, Spartan simplicity; this served both to reproach and to justify their current wealth and not infrequent dissipation. (We have evidence of a homosexual underworld in Rome from early on.) By the same token, pampered multi-millionaires with their backs safely protected by generous retirement benefits like to imagine themselves as fierce warriors of the boardroom and the market, giving and taking no quarter, driving their ships of business over the stormy seas of market forces, staking everything on the success of their visionary conceptions. The truth is that security is the first thing they have sought from their careers - personal security.
The rise of the New Aristocracy may or may not have began with CEOs, but it does not end with them. Krugman again: The explosion in C.E.O. pay over the past 30 years is an amazing story in its own right, and an important one. But it is only the most spectacular indicator of a broader story, the reconcentration of income and wealth in the U.S…. Census data clearly show a rising share of income going to the top 20 percent of families, and within that top 20 percent to the top 5 percent, with a declining share going to families in the middle... In fact, the census data understate the case, because for technical reasons those data tend to undercount very high incomes -- for example, it's unlikely that they reflect the explosion in C.E.O. compensation. And other evidence makes it clear not only that inequality is increasing but that the action gets bigger the closer you get to the top. That is, it's not simply that the top 20 percent of families have had bigger percentage gains than families near the middle: the top 5 percent have done better than the next 15, the top 1 percent better than the next 4, and so on up to Bill Gates.
Studies that try to do a better job of tracking high incomes have found startling results. For example, a recent study by the non-partisan Congressional Budget Office used income tax data and other sources to improve on the census estimates. The C.B.O. study found that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10 percent gain for families near the middle of the income distribution… Since the 1970's… income gaps have been rapidly widening… the top 10 percent contains a lot of people whom we would still consider middle class, but they weren't the big winners. Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million… in 1970 the top 0.01 percent of taxpayers had 0.7 percent of total income -- that is, they earned ''only'' 70 times as much as the average, not enough to buy or maintain a mega-residence. But in 1998 the top 0.01 percent received more than 3 percent of all income. That meant that the 13,000 richest families in America had almost as much income as the 20 million poorest households; those 13,000 families had incomes 300 times that of average families.
And let me repeat: this transformation has happened very quickly, and it is still going on. You might think that 1987, the year Tom Wolfe published his novel ''The Bonfire of the Vanities'' and Oliver Stone released his movie ''Wall Street,'' marked the high tide of America's new money culture. But in 1987 the top 0.01 percent earned only about 40 percent of what they do today, and top executives less than a fifth as much. The America of ''Wall Street'' and ''The Bonfire of the Vanities'' was positively egalitarian compared with the country we live in today.
…We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ''eminence of excess,'' an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts...
This is not a by-product of America’s generalized wealth. America was wealthy, indeed perhaps wealthier, when her richest men were not so wealthy - or so ostentatious, at least. Nobody imagines that Americans in the fifties or sixties starved. In point of fact, they were an image of prosperity for the entire world: this was a time when people from Europe to the Far East really did wake up in the morning and say to themselves, I want to be more like an American. I came in at the end of that period, but I can still remember that in my childhood - the sixties - people sang Bernstein’s “I wanna be in Ame-ri-ca” seriously. I remember at least two more songs with the same content, whose lyrics are much too embarrassing to repeat today. Now Republican columnists wonder why Europeans detest them - and foolishly ascribe it to European jealousy. Krugman again: …the America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich… Daily experience confirmed the sense of a fairly equal society. The economic disparities you were conscious of were quite muted. Highly educated professionals -- middle managers, college teachers, even lawyers -- often claimed that they earned less than unionized blue-collar workers. Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work… The middle-class America of my youth was another country…
Here, then, we have the root of the rage from the Democrat point of view - Krugman is a fanatical Democrat, and in future articles I shall find reason to criticize him severely. The America of my youth was another country. Indeed it was: a country without an aristocracy. A few grand families such as the Kennedys and the Fords might continue to dominate the news, conspicuous consumption might be the rule in a few crazed areas such as Hollywood, but an aristocracy is not something so small. An aristocracy is pervasive: it dominates the nation where it exists, and its influence may be found everywhere, because its instinct is to occupy every part of society that commands not only money, but respect. (That is why one-fourth of Britain’s 500 richest men, according to a recent Times survey, have been in the Brigade of Guards; military service in a select unit may not contribute much by way of pay, but it offers high rewards in terms of respect, useful contacts, and training in that all-important social ability.)
I call this the New Aristocracy for a very good reason: that this segment of the population sustains its position in society not by any distinguishable service they render, but by having occupied the summit of public and private institutions, and by mutually backing their occupation of said summit and their exploitation of it for private advantage. The wealth and privilege of this social group becomes institutional and quite separate from any function it may perform other than conspicuous consumption. And, coincidentally, economic theories arise (two words: trickle, down) to justify this rentier position.
What I describe is nothing new. It is the way aristocracies worked all over the West for most of the historic past. However, a century ago, a small number of countries - Britain and the British Dominions, France, the United States, Italy - which had successfully negotiated the painful transition to universal franchise and full democracy, decided to break up this class of hereditary wealth. The means they employed was the death tax, or inheritance tax. This did not prevent an individual from becoming mightily rich; it did not even prevent him (or her) from passing a comfortable living to their children; but it worked strongly against the continued existence of an institutionally rich, as opposed to merely comfortable, class.
Now, not all this new class of institutional profit-takers is Republican; we will see that the Democrat Party has also been changed by similar influences. But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business. It is, after all, never too hard to turn from a party of the respectable middle class to a party of the respected (or respect-purchasing) Upper Middle Class, and then of the Upper Class with no hint of middle and no great need for respectability. It went up that particular alley in the nineteen-twenties; but it proved a blind alley. Now, as Krugman rightly says, it has happened again. I think it should be clear what I am saying, and why I am bringing in the early-twentieth-century invention of the inheritance tax or death tax. This was the tax whose abolition was central to Bush II’s policies, and for which, we remember, he was willing to throw his Christian allies overboard. This was the tax whose abolition caused the protests of Warren Buffet and Bill Gates, exactly because of this: that these two absolutely typical instances of the Self-Made Man were profoundly opposed to the idea of inheriting, not just a comfortable social position, but vast wealth and privilege. The economic justification for it, repeatedly waved by “conservative” columnists, is equally ghostly. The idols of the conservative movement - the international markets - have shown what they think of it, and of the supposedly red-hot (if you listen to Republicans) American economy: they have hammered the US Dollar into a condition of weakness and submission that it had not seen since 1914. They have raised high the yen, the renminbi, the rupee; above all, they have raised to the stars that despised artificial creation of socialist dogmatists, the Euro. I am no worshipper of the all-holy Markets myself; but is it not interesting how those who make a fetish of Market Forces turn a completely deaf ear to them when they bear a message they do not like.
Nevertheless, one thing ought to be made clear. While the rise of an aristocracy may be unwelcome or even disgusting to people who, like me, believe in the republican democratic ideal, it is nevertheless not illegitimate or unlawful. As things are at present, this is simply a feature of the landscape, to which we have to get used. Unless society makes up its mind not to tolerate such a presence in its midst, and to make use of suitable legislative tools to break it, then an aristocracy there will be, and it will be a legitimate presence with legitimate interests. And in future chapters, I will show why it is much more difficult for society to make such a collective decision now than it was a century ago.
It is perfectly clear that the governmental action of the Republican Party at least since Reagan, and to a much higher degree under Bush II, has been intended to support and entrench the new aristocracy at the expense of the rest of the country. The Republican Party of today has become, what it had never been before, a variation on a European right-wing or conservative party. There is still a large difference, however. While a British Tory or Italian Liberal or German National Liberal, in the days of their greatness, worked mainly to support the paternal rule of an aristocracy that had existed for centuries, the American Republicans are working at forming one. And this is another reason why they are so hated by one half of the electorate. Old entrenched aristocracies learn to justify their power by taking a genuinely paternal and supportive interest in their inferiors, developing a notion of noblesse oblige, a sense that the lesser orders depend on them. That is why the Welfare State was invented and developed its greatest efficiency and perfection in the most aristocratic countries in Europe - Germany, Sweden, and to a lesser extent England. If the new aristocracy endures, perhaps in a century or two they will learn to excuse their power in similar ways. But at present, they are at the predatory stage of their self-establishment; and, having grown up with a vague notion that entrenched wealth is wrong in itself, they are also busy blinding themselves to what they are doing and generating the most ridiculous excuses (chiefly about the chimera of “market forces”) to justify their seizure of power. To opponents not blinded by the same process, the hypocrisy is all too clear. And there is even worse. Anyone who is not a committed Republican can only watch in disgust and horror when their supporters in the media, ever ready to back the economic value and moral justice of the formation of immense private fortunes and social networks, start prating about the position of entrenched privilege of… Federal and State employees, as compared to privately or self-employed citizens. To describe this as an attempt to drive a wedge between two sections of the middle class and build one of them up as a bogeyman for the other is, I think, all too obvious a criticism; and there is also the hatred of the aristocrat for the petty little bureaucrat who is the only figure in society that can still get in the way of his grand plans. But I think there is something other than that. It is a genuine displacement activity, a psychological mechanism to shift on to a third party the inevitable, instinctive disgust and the inevitable, instinctive sense that these advantages are not deserved, that must strike in the gut of anyone who has been brought up in a republican and egalitarian tradition, when their minds have to take in the rise of a new aristocracy. I do not, that is, think that these feelings are fraudulent; I think that they are real; and I think that they are merely shifted on to a convenient target - after all, nobody likes a “faceless” bureaucrat - because they contrast with the basic attitude taken by the person concerned.
Naturally, as this process develops, the group of real beneficiaries of Republican policies grows smaller and smaller. The focus of party policy has shifted from the Republican suburban householder who had looked to the Party to help them with their practical problems, to the top manager who is building himself a country mansion - and, if he is of a travelling disposition, flats in a few foreign cities - with the millions a year he earns, so to speak, from his having managed to place himself at the head of a public corporation. Obviously, from the electoral point of view, this ought to be a suicidal strategy. One of the strengths of democracy is that one millionaire, however rich, has no more votes than one policeman or one schoolteacher; and one would think that to run a party mainly for their advantage would not be to the advantage of the party. However, that the formation of an hereditary aristocracy involves the formation or enlargement of interests going well beyond those of the owners of the wealth themselves. There are Krugman’s “armies of servants,” the large areas of business which depend on supplying their conspicuous consumption or protecting their interests. (Let us not be imprecise: when a man owns tens of millions, he inevitably has plenty of legitimate interests to defend. Whether he has any business owning those tens of millions is another matter.) There are those who aspire to reach the same level, and have a good chance of doing so; those who delude themselves that they have; and those who teach their children, care for their properties, and manage their investments; and finally, there is that unaccountable part of mankind that manages to convince itself, without having any personal interest in doing so; that this class has a perfect right to take advantage of its position, and that to prevent them from taking advantage would have all sorts of terrible consequences. When we sum up all these areas of common interest, convinction and desire, we come to realize that we must reckon not only with the infinitesimal part of society that actually forms this new class, but with considerable areas which set store on it.
Even so, nobody in their right minds would imagine that this could add up to an election-winning coalition. Even in Europe in the old days, the conservative parties were never majorities, except when the folly or misfortune of their opponents gave them an advantage. What has so far saved the Republicans has been, exactly, the folly, and, what is more, the structural inability of the Democrats to reach out to a large, indeed election-winning part of the population; a part which has remained Republican, or indeed moved over to the Republicans, purely by default, and in spite of deep doubts and justified mistrust. I mean, of course, the values voters. And why the Democrats are bound to behave in so suicidal a way is something I will deal with in my next article.