DECLINING SOCIAL MOBILITY ... AMERICA'S CANARY IN THE MINE?

Tyler Durden at Zero Hedge has an interesting guest post on what's been happening to social mobility in America. Specifically, the chance to improve our lot in life in America is not what it used to be ...

Both capitalism and democracy promise the opportunity for upward mobility. Capitalism offers upward mobility to anyone with a profitable idea or productive skillset and work ethic. Democracy implicitly promises a "level playing field" of meritocracy, where talent, drive and hard work open opportunities for advancement. Crony capitalism offers wealth to the class that already possesses it. Feudalism bestows "rights" to wealth to a favored few. In a way, upward mobility is a real-world test of a nation's economic and social order: if upward mobility exits in name only, then that nation is neither capitalist nor democratic. Stripped of propaganda and misleading labels, it is a feudal society or a crony-capitalist economy masquerading as a capitalist democracy.  The wealth that could have been transferred to the next generation has been consumed suporting a "middle class" lifestyle and providing the next generation with what was once the basis for advancement: a university education, healthcare insurance, a reliable vehicle, etc. Now that jobs are hard to find and compensation is low, the next generation still needs the accumulated wealth of the household to get by. That is not upward mobility, it is downward mobility, on a vast and largely unnoticed scale.

If upward mobility in America is increasingly restricted (and it is) the implications for our nation are not good.

As I pointed out in my book (and here and here), the moral justification of capitalism rests on one simple principle: If you work hard you can get ahead. This what brought the world to America, and is the cornerstone of our society. If the conditions that enable us to work hard and get ahead are undermined one must ask, what's the point?

You can read the entire post here.

- Mark