Americans with elite educations advocate for socialism because they are shocked at not being rich?

by philg

“If you’re so smart, why aren’t you rich?” was a common expression in New York City during my father’s youth (Great Depression and World War II).

I’m wondering if this way of thinking explains why so many Americans who’ve obtained degrees from elite institutions and earn above-median wages are advocates of socialism. On the face of it, it doesn’t seem rational for people who earn 4-5X the median wage to say that income inequality is a national emergency and to be more enthusiastic about socialism than are people who earn below-median wages.

Pre-2016, my neighbors here in Eastern Massachusetts were upset when politicians and bureaucrats in Washington, D.C. would make decisions without consulting them. Since they knew themselves to be the smartest folks on the planet, why wouldn’t President Obama, the Wise One, call them up to ask for advice? Upset turned to rage following the country’s choice of Donald Trump.

What’s even more upsetting than not having one’s desired level of political influence? Not having one’s fair level of financial reward.

In a fair market, someone with a Ph.D. in humanities would get paid more than someone with a high school degree, at least if the Ph.D. in humanities is allowed to define “fair.” Yet an American bond trader with a high school degree can easily earn 10X what a liberal arts professor may earn (100X if we compare to an adjunct!). Thus we come to slightly newer adage: “When the market gives you an answer you don’t like, declare market failure.”

Readers: What do you think? What accounts for people with incomes that are well above the median advocating for “socialism”, which would tend to narrow the income distribution? Could it be rational? As the U.S. population expands and there is a brutal competition for scraps of desirable real estate, for example, will it help the Ph.D. academic to afford a beach house if central planners won’t give the bond trader enough to buy 10 beach houses?

42 thoughts on “Americans with elite educations advocate for socialism because they are shocked at not being rich?”

  1. “What do you think? What accounts for people with incomes that are well above the median advocating for “socialism”, which would tend to narrow the income distribution?”— This is simply a case of the liberal pathogen strongly infecting a host ultimately leading to TDS. Trump Derangement Syndrome: Unhappiness caused by the election of Donald Trump to the Presidency of the United States. Sufferers display an inordinate loathing for and preoccupation with Donald Trump. The grief and distress they suffer is real.

    • I don’t think those people are all deranged, some of them are just opportunistic.
      You see: under socialism, someone has to be put in charge of redistribution. That’s their chance.

  2. I’ll bite. It’s possible that academics and the overeducated underclass have:
    1. a better sense of the actual inequality
    2. some inkling that the actual overclass often have White Russian style escape routes for pitchfork scenarios and that the cozy smarty pants class may bear the brunt of cultural revolutions and elitist purges as they are often more accessible, less able to defend themselves and have a propensity to irritate others.

    So they may have a rational incentive to forestall underclass revolutions that complements their less rational image of themselves as progressive thought leaders, and their dreams of being able to say ‘I told you so’ when the next collapse comes along.

  3. The “bond trader with a high school education” sounds like an 80s anecdote, when bond traders did make a lot of money, and some clerks might have managed to rise from the back office to become a trader. But that is a long time ago.

  4. They aren’t smart, period. Anyone who after events of 20th century still thinks socialism is a good idea is a flaming idiot. No ifs and buts about that.

    • averros: Per M’s comment above, I think it is always good to start by assuming that people are acting out of rational self interest. At first blush, it may appear that an increased role for government allocation in the U.S. economy wouldn’t help those who are already earning 4X the median. But maybe they can come up with a way for it to work for them!

    • Well, the assumption of rational self interest is demonstrably wrong in case of leftism – at least for the vast majority of supporters (in any kind of movement, generally speaking, there are two kinds of people – believers and psychopaths who lead believers).

      Even a cursory study of the history of socialist movements yields clearly unambiguous trajectory common to all of them: first, idealists (usually gullible young people lacking any life experience and wisdom) who are for everything good and against everything bad, then it’s psychopathic revolutionaries (who eventually get enough support from believers and suppress enough “reactionaries” to get into power), then it’s civil war, and if the socialists survive the civil war, it’s Red Terror time – labor camps, purges, and such. Then it’s expansion wars (usually curbed by less insane societies, at great cost), and then years of stagnation and decay followed by societal collapse (which also comes with high human costs). The initial population of believers doesn’t survive the terror and the labor camps. Some psychopaths do (though absolute majority of them perish in the internecine game of thrones) and preside over the societal decay and collapse.

      If you look at any successful take-over of a society by socialists, none of the early supporters gain anything (other than early grave or years in labor camps) from it. It’s not a rational self-interest which moves them.

      The key to understanding socialist movements is recognition of the fact that they are branches of an aggressive religious cult, and so their believers are adept at ignoring and dismissing facts and rational arguments which conflict with their dogma. Leftism did not appear in 19th century in a vacuum (and certainly is not a logical consequence of scientific progress as the leftists like to claim), but is the direct spiritual descendant of millenarian sects ostensibly shedding the religious trappings in favor of atheism, but retaining their character and essence. If you haven’t read it already, Rothbard’s essay “Karl Marx as Religious Eschatologist” (https://mises.org/library/karl-marx-religious-eschatologist) provides a fascinating historical background on emergence and pedigree of communism and socialism.

    • @averros:
      Are you describing the communist hoi polloi? I wouldn’t worry about well-being of the likes of Mao, Stalin, and Pol Pot: they’ll do just fine, and so will their extended families as well as their deputies (well, most of them anyway).

      Of course communism is a cult, but their clergy will be comfortable, thank you very much.
      As to the smart vs stupid debate, never underestimate people at the top of any large organization or a sovereign nation: natural selection works well.

    • Averros makes a very good point with respect to rational self interest of the left. Not only hoi polloi were exterminated in Stalin’s labor camps, but the majority of the original Lenin’s Guard (Ленинская гвардия) were dealt with in the same manner as well:
      58% of the 1917 Communist Party Central Committee was liquidated by 1938.
      63% of the first Council of People’s Commissars (the government) was executed by 1938.
      Out of 267 1917-1934 Central Committee members, 34 died before 1937, 36 survived the Purge, the rest (74%) were executed.
      https://ru.wikipedia.org/wiki/%D0%9B%D0%B5%D0%BD%D0%B8%D0%BD%D1%81%D0%BA%D0%B0%D1%8F_%D0%B3%D0%B2%D0%B0%D1%80%D0%B4%D0%B8%D1%8F

      Yes, the likes of Bernie Sanders, AOC, and their supporters are indeed “flaming idiot[s]. No ifs and buts about that”.

    • Ivan: so why does “socialism” work for large parts of the world aside from the U.S.A. ( since you want to define socialism as health care for all and higher marginal tax rates )?

    • Socialism worked great for us! In just four years, we managed to solve issues with our nation’s food supply and urban overpopulation, social inequality and ethnic diversity, and eliminated problems with healthcare and infrastructure (that included all doctors and civil engineers).

      Our experience has proven that rejecting socialism is an irresponsible choice that may have an adverse effect on your health and well-being: https://allthatsinteresting.com/cambodian-genocide Please vote for the real socialism!

  5. I see the screaming socialist BS as pure white elitist nonsense our of Mass…… Out west our screaming liberals are talking about climate change and immigration and a fix for medical care. And yes they hate Trump because he is lying ass**** and hate mongering bully. But no way are they talking socialism. They are pure rich capitalists…

    See Democrats John Delaney and Kamala Harris and Amy Klobuchar views here on socialism.
    https://www.foxnews.com/politics/kamala-harris-affirms-support-for-capitalism-as-sanders-enters-race

  6. What you claim about the west is true of the whole country, Bill. Elizabeth Warren has also stated that she’s a great supporter of capitalism.

    https://www.bloomberg.com/news/articles/2019-02-02/why-elizabeth-warren-still-calls-herself-a-capitalist

    Bernie Sanders says that he’s a New Deal liberal. The New Deal programs are very popular with the American people.

    http://nymag.com/intelligencer/2019/04/bernie-sanders-democratic-socialism-new-deal-liberalism-cnn-town-hall.html

    So the whole premise of this post is false. Very few Americans, highly educated or not, are clamoring for “socialism”. The people who rant and rave about socialism are Fox News, Rush Limbaugh, the rest of the crackpot right wing media complex, and their confused audience. The purpose of that ranting and raving is to convince non-rich Americans to support policies that benefit the wealthy. Ask someone who hates socialism so much what socialism is and they can’t even define it.

    • > So the whole premise of this post is false. Very few Americans, highly educated or not, are clamoring for “socialism”.

      Huh?

      The very first line of the article that you linked to in the previous line would seem to contradict that statement:

      > Universal health care, tuition-free public college, a giant hike in the federal minimum wage, and a guaranteed federal job for anyone who is involuntarily unemployed are all very popular ideas in the United States.

      If those aren’t socialist policies, then I don’t know what possibly could be.

      It seems to me that this isn’t a particularly hypothetical exercise, either. Between existing socialist policies and crony-capitalist fraud, there’s a remarkably small portion of the US economy that’s still operating under anything like actual market forces.

    • In a speech [Bernie Sanders] gave at the National Committee for Independent Political Action in New York City on June 22, 1989, reprinted in the December 1989 issue of the socialist publication Monthly Review: “In Vermont, everybody knows that I am a socialist and that many people in our movement, not all, are socialists. And as often as not — and this is an interesting point that is the honest-to-God truth — what people will say is, ‘I don’t really know what socialism is, but if you’re not a Democrat or a Republican, you’re OK with me.’ That’s true. And I think there has been too much of a reluctance on the part of progressives and radicals to use the word ‘socialism.’”

      https://www.politico.com/story/2015/07/14-things-bernie-sanders-has-said-about-socialism-120265

    • Universal health care, tuition-free public college, a giant hike in the federal minimum wage, and a guaranteed federal job for anyone who is involuntarily unemployed are all very popular ideas in the United States.

      If those aren’t socialist policies, then I don’t know what possibly could be.

      That doesn’t make any sense. Once again, a definition of the word is required if you’re going to claim that those are socialist policies. Is any increase in the minimum wage, whatever the current level happens to be, a socialist policy? If free health care and public colleges are socialist policies, are free health care for senior citizens and and free K-12 education socialist or not? If the answer is no, what’s the definition of socialism that would justify the distinction?

    • The fact that you have to go back 30 years to find an old Bernie speech appears justify my assertion that it’s hard to find people demanding socialism.

    • In 2016, Mr. Sanders made a strong bid for the Democratic presidential nomination. Far from hurting his candidacy, the “socialism” label helped it. Mr. Sanders wasn’t a liberal, a progressive or even a Democrat. He was untainted by all the words and ways of politics as usual.

      That’s why the two most important utterances of today’s socialists are Ms. Salazar’s demand that New York abolish the law prohibiting strikes of government workers and Ms. Ocasio-Cortez’s call “to occupy all of it.” Both statements reveal what socialists have always understood: Mass action — sometimes illegal, always confrontational — will determine socialism’s final form.

      Socialism is not journalists, intellectuals or politicians armed with a policy agenda. As Marx and Engels understood — this was one of their core insights, what distinguished them from other socialist thinkers, ever ready with their blueprints — it is workers who get us there, who decide what and where “there” is.

      That, too, is a kind of freedom. Socialist freedom.

      https://www.nytimes.com/2018/08/24/opinion/sunday/what-socialism-looks-like-in-2018.html

    • In a speech at Georgetown University on Thursday afternoon, Sen. Bernie Sanders, the independent from Vermont who’s seeking the Democratic presidential nomination, did something unprecedented for a major candidate: He made the case for democratic socialism.

      The address, which Sanders wrote himself, had been in the works for weeks, and in it Sanders embraced a label that has most often been used to attack him.

      https://www.motherjones.com/politics/2015/11/bernie-sanders-socialism-speech-georgetown/

    • This is from that Mother Jones article:

      The next time you hear me attacked as a socialist—like tomorrow—remember this: I don’t believe government should take over the grocery store down the street or own the means of production, but I do believe that the middle class and the working families of this country who produce the wealth of this country deserve a decent standard of living and that their incomes should go up, not down.

      I do believe in private companies that thrive and invest and grow in America, companies that create jobs here rather than companies that are shutting down in America and increasing their profits by exploiting low-wage labor abroad.

      I believe that most Americans can pay lower taxes if hedge fund managers who make billions manipulating the marketplace finally start paying the taxes that they should.

      Bernie doesn’t sound like a real socialist. If he was one, there would be no hedge fund managers to tax. This takes us back to the need to define the term. All this ranting about socialism for the last 11 years amounts to laziness. People opposed to Bernie want to employ one word instead if making actual arguments in opposition to his proposals.

    • Socialists don’t have to be the most numerous group, it’s enough to be the loudest and the most intolerant. Case in point: Russia, October 1917

    • Government administered health care all over the world is on the brink of collapse. We’re talking ten years at most, but it will be an obvious catastrophe in five years. US-Medicare, Canada-Medicare, UK-NHS, and various other European systems won’t exist in a decade.

      Socialism is what we’ve been swimming in for 60 years. The tide is going out and the polls are irrelevant. The system is right now being Thatchered: Eventually you run out of other people’s money. Doctors and pharma companies are in for a rude wake-up.

      Analogize this analysis out to education, large pieces of finance, military, and infrastructure spending. The semantics of “socialism” are irrelevant. Other people’s money has been used up and the party is over.

    • @ tygertgr Precisely right. Pedantic disputes about whether something is socialism, as if it were some binary state, are just rhetorical masturbation. What’s obvious is that if you smooth out the trend line of the past 60ish years, it’s almost entirely in the direction of increasing socialism and diminishing personal and economic freedom. Whichever side of the debate one resides on, this shouldn’t be a controversial statement.

      And as the old saw goes, bankruptcy comes very slowly — then all at once.

      It can take a shockingly long time, but companies (and governments) are eventually taught the one fundamental lesson: you can’t outrun mathematics. You can’t outrun cash flow. Eventually the cheque bounces, and nobody works for free.

      That said, I’m AMAZED at how long they can keep the plates spinning, and we shouldn’t underestimate the extraordinary efforts that governments (and banks) will expend to keep the party going for just one more bonus cycle, just one more administration. I assume that “Lord grant me the strength to delay the collapse until the next guy’s watch” is printed on all of the White House and Congressional hand towels in the private bathrooms.

      They know how unsustainable the current course is. Most of them are greedy, or perhaps evil, but not stupid.

    • The number of bond traders have been decimated over the past 10-12 years as automated bond-trading has become commonplace. Some folks had to learn to code. 🙂 The remaining traders are still well-compensated although the excesses described in books 🙂 are long gone.
      So why? Partly a tradition and partly because a single bespoke bond trade can be easily in tens megadollars.

  8. This is a well discussed issue referred to as “elite overproduction.”

    For example, those “students” in Tienanmen Square were mostly pissed off they weren’t getting spots in the party like they thought they deserved.

    • Lenin would have called that “parasite overproduction” 🙂

      What these half-educated leftists with impressive degrees do not understand is that to a socialist revolutionary they *are* parasites who need to be exterminated.

      More level-headed look at the role of intellectuals and their discontent at the disconnect between their self-perceived worth and their actual compensation can be found here: https://mises.org/library/natural-elites-intellectuals-and-state

  9. Various folks above: I’m not sure that “socialism” is the best term for the current U.S. system. The true socialist paradise economies required all able-bodied citizens to work. A person who didn’t work was a “parasite.” The U.S. is a work-optional society. We have people who’ve never worked living in public housing, receiving Medicaid, shopping with food stamps, and making calls on their Obamaphones. There are Americans who had sex with a worker and are now living off that worker in a court-ordered arrangement via child support or alimony. There are American adults who are in a voluntary arrangement with a spouse or relative that enables them to refrain from work despite being of working age. None of this would have been possible in the old USSR, for example.

    See https://www.kansascityfed.org/~/media/files/publicat/econrev/econrevarchive/2018/1q18tuzemen.pdf and https://fred.stlouisfed.org/series/LRAC25MAUSM156S for how our society has been transformed since the 1960s, but not in the “everyone works” direction of classical “socialism”.

    • Gee, somehow you forgot to mention people who inherit large fortunes from wealthy parents or grandparents and don’t work.

    • Vince: When parents earn a lot and then voluntarily choose to leave some of the money that they earned to children who don’t bother to work, that’s included in the above comment. It is part of “are in a voluntary arrangement with a spouse or relative that enables them to refrain from work despite being of working age.”

    • Maybe I got that one backwards. Does more people in work represent more socialism? Then a nice brutal recession like the one that occurred 10 years ago would result in an increase of what phik call freedom.

    • Vince: It is conventional for economists who study labor force participation over these long periods to look at only those residents of the U.S. who identify as “men.” That way the economic trends aren’t conflated with social trends, e.g., the no-fault divorce revolution of the 1970s, the trend toward two-earner households (maybe a sign of growing population and increased competition for scarce resources?), etc.

    • It is conventional for economists who study labor force participation over these long periods to look at only those residents of the U.S. who identify as “men.” That way the economic trends aren’t conflated with social trends, e.g., the no-fault divorce revolution of the 1970s, the trend toward two-earner households (maybe a sign of growing population and increased competition for scarce resources?), etc.

      That may be true of some economists. It’s hard to imagine that there aren’t some economists who think it’s worth paying attention massive flow of women into paid employment that occurred in the ’70s and ’80s. It would make no sense to not consider an increase in the total workforce (men plus women) to be an economic trend. Some of that was caused by women having fewer children (something causes population to grow less slowly) and thus not needing to devote as many years to rearing the kids.

  10. Many of the employed people I’ve encountered do little to no “work” as well.

    And doing “work” is no indication you’re contributing to society. See a prominent employed individual who claims avoiding paying any taxes was a “game”.

    • baz, you forgot to include the link to your tax returns so we can see how much extra tax you’ve voluntarily been paying. Just forgetfulness, no doubt.

    • Palmer: you deny any facts you don’t like, it wouldn’t matter what evidence is provided you’d just declare “fake news”.

      To clarify your point of view – no one should pay any tax?

    • Obviously, the poor should pay all the taxes. The rich already have everything they need so they have no use of government services. OTOH, the poor who rely on the government should help sustain that government.

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