In and of itself, social mobility is far from ambiguously good. Imagine a society of 10 individuals ranked by income from the poorest, No. 1, to the richest, No. 10. Assume that a good government (the one you would prefer) jacks up the income of No. 3 to between that of No. 6 and No. 7, putting its favorite in the 6th income slot. No. 3 has now become No. 6; No. 4, No. 5, and No. 6 have all fallen down one slot. The government could increase social mobility more if, from the same starting point, it moved each odd-numbered individual one rank up and, consequently, each even-numbered individual fell one rank down: half the population would have been mobile up and half mobile down.
Relative social mobility up is necessarily accompanied by social mobility down. Few people would consciously argue that social mobility in this sense is unambiguously good, especially if the arguer is among the downward-mobile. Whether relative social mobility is good or bad must depend on its causes and consequences.
If people switch relative places but the absolute incomes of all move up in the process, social mobility can be said to be absolute: everybody gains. Economists would say that the new distribution is a Pareto-improvement if everybody gains or at worst stays put, and nobody loses. Note that the only social mobility that will eliminate envy is complete immobility when everybody earns exactly the same income. That’s the only way for everybody to be in the middle class, although in reality the equalizers would probably fare better than the equalized. The main point here, however, is that what people generally want is economic growth, not relative social mobility per se. (In a free society, ascetic choices are of course allowed too.) A widespread measure of absolute social mobility is the probability that a child will grow up to earn more than his parents.
One way to avoid clear thinking about social mobility is to loosely equate it with “equality of opportunities.” Cecilia Rouse, chairwoman of President Biden’s Council of Economic Advisors, declared to The Economist (“The Democrats’ Social-Spending Package Cannot Repair the American Dream,” November 6, 2021):
Most would agree that our current rates of social mobility are too low. There is not equality of opportunity. Kids are not starting at the same place.
That “kids” all start at the same place is of course impossible (see Anthony de Jasay, Social Justice and the Indian Rope Trick, Liberty Fund, 2014). Even if, as some 19th-century French revolutionaries wanted, the state stole children from their parents in order to educate them in a perfectly egalitarian way, young adults would not start at the same starting gate. Besides genetic factors, the state’s educators would not be all equally competent or they would themselves form a new aristocracy and fight hard to protect their privileges. If we follow James Buchanan and most classical liberals, this does not mean that some minimal education should not be available to all children.
Social mobility, then, is not a fundamental or ultimate value. It is an instrumental or secondary value. It is valued as a consequence of individual liberty and an accessory of general prosperity. Individuals thriving to improve their conditions generate social mobility and constant disruptions of old ways of doing things, and disruptions are necessary for economic growth. In competing to offer consumers (individuals in their consumer activities) what they want at the lowest possible prices, producers (individuals as producers) continuously jostle the distribution of income. In the process, the absolute incomes of nearly everybody increase or are anyway maintained much higher than they would be in an unfree society.
A related argument is given by Friedrich Hayek, who shows that, in a free society, nobody can have a guaranteed position in the distribution of income (or in the social ranking, which I have assumed to be coextensive with the distribution of income, which is not always true). The shuffling of relative positions, that is, relative social mobility is necessary for economic prosperity. A short quote from his Law, Legislation and Liberty, Vol. 2: The Mirage of Social Justice (University of Chicago Press, 1976, p. 94) may serve as an introduction:
The frequent recurrence of such undeserved strokes of misfortune affecting some group is, however, an inseparable part of the steering mechanism of the market: it is the manner in which the cybernetic principle of negative feedback operates to maintain the order of the market. It is only through such changes which indicate that some activities ought to be reduced, that the efforts of all can be continuously adjusted to a greater variety of facts that can be known to any person or agency, and that the utilization of dispersed knowledge is achieved on which the well-being of the Great Society rests. …
If we were all to be consistently deprived, as the socialists proposed to do, of all ‘unearned benefits’ which the market confers upon us, we would have to be deprived of most of the benefits of civilization.
READER COMMENTS
rsm
Nov 25 2021 at 3:09pm
《(In a free society, ascetic choices are of course allowed too.)》
May I thank you for at least acknowledging this possibility?
If I get an inflation-protected basic income, as compensation for the loss of commons on which formerly hermits could legally go self-provision upon, what do I care how much bigger your bank account may be?
Can I also retain free speech, to use my words to persuade you all to listen to the still quiet voice inside more? Is that a turkey I hear, petitioning you for redress of grievances?
Pierre Lemieux
Nov 25 2021 at 9:11pm
rsm: You don’t have to thank an economist for attaching a value to individual preferences. As for the “inflation-protected basic income,” one problem is that you or other recipients may soon think it’s not enough and want more people to climb down the social ladder in order to boost up your consumption. Regarding the turkey (if I understand you well and I am not a victim of your sense of humor), perhaps a guaranteed income for her would also help?
Pierre Lemieux
Nov 25 2021 at 9:41pm
rsm: The Georgist argument has some relevance, however, if that is what you referred to. If we were governed by angels, it would probably be difficult to counter.
Thomas Lee Hutcheson
Nov 26 2021 at 7:10am
I guess this means that the best kind of growth is that in which low income groups gain income faster than the high income groups
Pierre Lemieux
Nov 27 2021 at 12:18pm
Thomas: That’s a subjective value judgment that you may legitimately entertain. Other individuals make different value judgments, for example, “the best growth is that in which the incomes of the Coastal “liberals” increase faster because they will buy concert tickets instead of beer and chips.” Other statements incorporate (and confuse) moral judgments with (what I think is questionable) positive economics: “the best growth is that which mainly benefits the rich because they invest more of their incomes is invested and thus they better contribute to sustained or increasing growth”; or “the best growth is that which benefits the poor because they consume more of their incomes and thus increase ‘aggregate demand’ relatively more.”
To minimize the demands on our moral credibility, de Jasay’s “live and let live” moral postulate appears to be much better; so is the Pareto criterion (although perhaps a bit on the more demanding side) as Buchanan and Tullock argue in The Calculus of Consent; and so perhaps is even Hayek’s presumption in favor of evolved rules of conduct in a Great Society. (The latter may be a bigger red pill to swallow.)
Jose Pablo
Nov 29 2021 at 8:10pm
Why Thomas?
You are assuming that “the flattening of the income distribution” is a positive thing but why is so? You are just assuming your conclusion.
Actually, it is clear that “equality” is not “per se” intrinsically good. On this topic, see Huemer:
http://www.owl232.net/papers/equality.htm
Peter Gerdes
Nov 26 2021 at 2:13pm
Yes, I agree that simply having lots of people adjust their places on the wealth hierarchy isn’t necessarily good. Though, I do think there is some benefit to having pure churn in society (ensures that elites don’t become too isolated/unaware of the problems of the poor and keeps everyone invested in the welfare of others rather, e.g., if you might become rich one day then class warfare is less attractive.)
But, TBF, I think what most people mean by social mobility is the ability of people to change their social status if their level of ability doesn’t match their level of wealth. In other words, social mobility isn’t a measure of how many people change between wealth/income levels but a measure of what fraction of people whose skills are mismatched with their income level manage to change.
I think one underlying reason for the poor quality of public thought on this issue is that admitting that a substantial component of ability might be genetic (or even culturally transmitted from parents) is a third rail. And, if you assume that rich parents are no more likely to have a highly talented child than poor ones, it follows that the measure of how many people do change wealth levels is proportional to the fraction of those who are mismatched who change to match.
Pierre Lemieux
Nov 27 2021 at 12:31pm
Peter: Good point in your first paragraph!
On the rest, note that it is not only a matter of genetics or ability, but also of luck and of the efficient use of knowledge in society (see Hayek’s “The Use of Knowledge in Society, which is not very technical). Consider the following example. Somebody has recently invented pocket calculators. The hundreds, perhaps thousands, of people who are working at designing and manufacturing slide rules are soon going to lose their jobs, for no fault of theirs and whether they have or not more “abilities” than manufacturers and salesmen of pocket calculators. This is an unavoidable consequence if you attach value to consumer sovereignty. Resources should move from slide rules to pocket calculators, and some of the former slide-rule workers won’t be able to switch to making pocket calculators.
Jose Pablo
Nov 29 2021 at 7:44pm
I think that in our society “ability” (and “hard work”) are greatly overrated (obviously “mythified”).
Napoleon was right when saying: “I’d rather have lucky generals than good ones.” I, no doubt, would rather have lucky managers than good ones. And discussing whether or not Leo Messi has more “ability” or works harder than my accountant is a useless discussion (“ability” can only be very narrowly compared).
People can change their “social status” based on a lot of things: beauty, charm, emotional intelligence, sense of humor, … luck of course and all of them are very unevenly distributed among people and, yet nobody makes a fuss of it.
But if the “uneven distribution” has to do with money or “formal (useless) education” then they make a “colossal fuss”. That’s a puzzle to me. Maybe they think they can “alter” the distribution of money or “formal education” in a way they can’t alter beauty, charm, sense of humor or luck … but they are wrong, and they have been proved wrong once and again and yet, they are immune to discouragement.
Why?
Floccina
Nov 30 2021 at 10:31am
And this from Bryan. The worst thing about being a nice but poor person in the USA is that you much live around poor people:
The effect is large:
Persons in poor households at or below the Federal Poverty Level (FPL) (39.8 per 1,000) had more than double the rate of violent victimization as persons in high-income households (16.9 per 1,000).
Persons in poor households had a higher rate of violence involving a firearm (3.5 per 1,000) compared to persons above the FPL (0.8-2.5 per 1,000).
The overall pattern of poor persons having the highest rates of violent victimization was consistent for both whites and blacks. However, the rate of violent victimization for Hispanics did not vary across poverty levels.
Poor Hispanics (25.3 per 1,000) had lower rates of violence compared to poor whites (46.4 per 1,000) and poor blacks (43.4 per 1,000).
Poor persons living in urban areas (43.9 per 1,000) had violent victimization rates similar to poor persons living in rural areas (38.8 per 1,000).
Poor urban blacks (51.3 per 1,000) had rates of violence similar to poor urban whites (56.4 per 1,000).
What is good in upward relative mobility for nice people but that is not the same thing and I think that happens more.
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