Economist.com | Meritocracy in America
A growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the Gilded Age, around the 1880s. But social mobility is not increasing at anything like the same pace: would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap. The United States risks calcifying into a European-style class-based society.
The past couple of decades have seen a huge increase in inequality in America [mjh: hmmm, starting with Raygun]. The Economic Policy Institute, a Washington think-tank, argues that between 1979 and 2000 the real income of households in the lowest fifth (the bottom 20% of earners) grew by 6.4%, while that of households in the top fifth grew by 70%. The family income of the top 1% grew by 184%—and that of the top 0.1% or 0.01% grew even faster. Back in 1979 the average income of the top 1% was 133 times that of the bottom 20%; by 2000 the income of the top 1% had risen to 189 times that of the bottom fifth.
Thirty years ago the average real annual compensation of the top 100 chief executives was $1.3m: 39 times the pay of the average worker. Today it is $37.5m: over 1,000 times the pay of the average worker. In 2001 the top 1% of households earned 20% of all income and held 33.4% of all net worth. Not since pre-Depression days has the top 1% taken such a big whack. …
The most remarkable feature of the continuing power of America’s elite—and its growing grip on the political system—is how little comment it arouses. Britain would be in high dudgeon if its party leaders all came from Eton and Harrow. Perhaps one reason why the rise of caste politics raises so little comment is that something similar is happening throughout American society. Everywhere you look in modern America—in the Hollywood Hills or the canyons of Wall Street, in the Nashville recording studios or the clapboard houses of Cambridge, Massachusetts—you see elites mastering the art of perpetuating themselves. America is increasingly looking like imperial Britain, with dynastic ties proliferating, social circles interlocking, mechanisms of social exclusion strengthening and a gap widening between the people who make the decisions and shape the culture and the vast majority of ordinary working stiffs. …
Teddy Roosevelt advocated an inheritance tax because he thought that huge inherited fortunes would ruin the character of the republic. … The Republicans, by getting rid of inheritance tax, seem hell-bent on ignoring Teddy Roosevelt’s warnings about the dangers of a hereditary aristocracy.