Why the “New Global Elite” is Unable to Rule
Anthony Mansueto
President and Senior Scholar at Seeking
Wisdom
Chrystia Freeland’s article in this month’s Atlantic, “The
Rise of the New Global Elite,” raises important questions about the analysis of
the current situation which Seeking Wisdom has advanced in this journal
and in The Death of Secular Messianisms. Much of what Freeland discusses
is, to be sure, “old news.” The rich have been getting richer while the working
classes and middle strata, at least in the developed countries, have lost
ground. The new rich have benefited from globalization, and especially the
liberalization of capital flows and the emergence of new information
technologies in ways that the vast majority have not. And the new rich are
increasingly global in their allegiances and outlook, with little loyalty or
investment to any one nation state.
This all sounds a great deal like the analysis advanced by
Robert Reich almost two decades ago in The Work of Nations, and elements
of it, at least, simply represent a working out of tendencies identified nearly
a century ago by Lenin. But Freeland describes the contours of the “new global
elite” in a very distinctive way which merits further analysis. It is
especially important to understand this sector because it is concentrated in
the information, technology, and investment banking sectors which we have
identified as the principal, enduring base of the Democratic Party in the United
States. Freeland’s analysis also has some profound implications for our
“civilizational crisis” thesis.
First, Freeland argues, the new global elite is composed almost
entirely of nouveaux riches who, while rarely of working class origin,
derive mostly from relatively modest “professional middle class” or “new petty
bourgeois” backgrounds. The have enjoyed access to good, often elite schools
but have not generally benefited from inherited wealth or aristocratic social
capital. Freeland does not address this point, and it needs to be tested
empirically, but the tendency seems to be for technology entrepreneurs to have
“dropped out” of an elite institution at some point in their education (though
often at the doctoral rather than the undergraduate level, like Bill Gates).
Those in the financial sectors are more likely to be top graduates with
outstanding quantitative skills and a record for risk taking, often validated
by membership in secretive, elite organizations such as Skull and Bones which
have initiation rituals centered on taboo-breaking. They are, in this sense,
the polar opposites of their cousins in the academy, which values conformity,
collegiality, and “fit” even more than it does intellectual brilliance and has
zero tolerance for those who break its rules. Technology and information sector
entrepreneurs generally “make it” by coming up with a great new idea –Google,
Facebook, Groupon—and building a team and raising the money to make it happen.
Recruits to the financial sector “make it” by developing ever more exotic
financial instruments which allow them to meet “tenure” criteria which would
make most academics (as well as their priors in the industry) tremble with fear
–e.g. earning the firm staggering profits during their first years on the job.
Economically, this stratum is distinguished from the bourgeoisie
proper by the fact that it draws most of its revenue from nominal salary.
Freeland quotes a study by Emmanuel Saez showing that while in 1916 the
wealthiest 1 percent of the US population derived only 20% of its income from
wages and salaries, in 2004 that number had risen to 60 percent. And this is in
spite of the fact that it is more advantageous from a tax standpoint to report
income as capital gains than as wages and salaries. What we are looking at here is a social stratum constituted by
monopoly rents on skill. Economically, they are more like athletes or movie
stars than like the financial, industrial, commercial, or agrarian capitalists
of the past.
Politically the behavior of this stratum has two well defined
characteristics. First, to the extent that they have engaged the political
arena, they have leaned Democratic and were, in fact, among the most important
funders of Barrack Obama’s 2008 campaign. Many, though not all, appear to have
pulled away over his attempts to raise taxes on the wealthy and regulate the
financial industry, reigning in the ability of its superstars to find ever more
creative ways to capture surplus created elsewhere. But with the exception of a
few outliers they tend to be social liberals.
Politics,
however, has not been their main arena for engaging global issues. They have
invested most of their money instead in what Matthew Bishop and Michael Green have
called “philanthrocapitalism.” In short, they look to replicate in the
philanthropic arena their success in business, introducing the next big, world
transforming idea. While a few, like George Soros, have actually built real
institutions, most have not. Nor have they supported existing artistic, educational,
charitable, and religious institutions. Their projects are almost all directed
either at ecological issues such as climate change or at the very poor,
especially in Africa. The “new global elite tends” to believe that if one comes
from a solid working class or professional middle class background and fails to
achieve global elite status it is due either to mediocrity or poor choices.
There is a strong bias towards the view that the working classes and middle
strata in the Europe, North America, and Japan are over paid relative to the
value added they create and need to take a “pay cut” to world market levels.
They are, in effect, advocating the leveling down to world market wages
which Robert Reich predicted but offered strategies to prevent,
in The Work of Nations two decades ago.
We do not have hard data on the ideological and religious
orientation of this stratum but two tendencies are apparent. First, the sector
shows evidence of a strong neomodernism, believing that technology –especially their
technologies— can resolve most global problems. This is accompanied by a very strong
tendency towards subjective idealism (the historic ideology of rentiers since
the seventeenth century) and especially the idea that we create our own
reality. Perhaps this explains the attraction for this elite and its
peripheries for the Kagyu and Nyingma schools of Vajrayana Buddhism which are
often interpreted (incorrectly I believe) as teaching something like this.
Traditions stressing ethical conduct and community –Judaism, Catholicism,
Islam, and Confucianism—have little appeal. Protestantism, especially Calvinism
should have some appeal to this sector which appears convinced that it
is doing God’s work. But then Calvinism regarded productivity as merely a possible
indicator of election. These people know they are elect. And they
are modernist enough to believe that they are the God whose work they are
doing.
What are the implications of this analysis for the
civilizational crisis thesis we have been advocating and for our analysis of
the present political conjuncture as defined by a struggle between
“progressive” sectors of capital which understand at least elements of this
crisis (climate change, demographic inversion) and backward sectors which are
either committed to the very technologies which created it (petroleum and the
internal combustion engine) or to regressive, patriarchal, pronatalist
solutions?
First, it suggests that we need to strengthen further the claim
we put forth in “The Protestant Elite and the Crisis of Capitalism” that we do
not currently really have a ruling class. The new global elite falls
short of this status in a number of ways. First, it is not entirely clear that
it meets the minimum criterion generally used in the dialectical tradition: ownership
or control of the means of production. Exorbitant claims on surplus are not the
same thing as ownership or control in that they do not give one the same
capacity to shape long term development.
In this sense, the new elite looks more like a super-new-petty-bourgeoisie
than like a fraction of the bourgeoisie proper.
Second, this elite does not seem to really have a credible
strategy for rule. While we have frequently disputed the claims by Gramsci and
the historical materialist tradition generally that the petty bourgeoisie
cannot become a ruling class because it is not a “fundamental class” like the
bourgeoisie and proletariat (i.e. one constituted by the relations of
production of the dominant economic structure), and thus always focuses on partial
aims (in contemporary parlance “single issues”) rather than on global
structural or civilizational transformation, I see no evidence that this group
has advanced a “global agenda.” It does have a legitimation strategy: claiming
that its privileges are justified by its superior intellectual talents. And
this strategy does have some traction, though it is working better for the
technology and information elites than for the financial sector. Not
surprisingly, people “like” Facebook better than they do derivatives or, at
this point, subprime mortgages. But its policy and program agenda is basically
a collection of “cool ideas” for solving problems like climate change, global
hunger, illiteracy, inner city education, etc. Some of these ideas really are
cool and most are good solid philanthropic efforts, but they do not amount to a
vision for the next steps in human civilizational project.
These programmatic limitations are matched at the level of
institution building. The new global elite (the conspiracy theorists
notwithstanding) do not have a political party. While they have tended to
dominate the Democratic Party in the US in recent years they appear not to be
sufficiently invested in it either to make sure that the candidates they
support follow policies they can live with or that they retain the
congressional majorities they need to govern effectively. They are, in short,
political dilettantes. The elite conference circuit which attracts much of the
intellectual and organizational energy of this elite is not really a potential
instrument of rule.
This is, to be sure, not the first time that a rising political
stratum has amassed economic wealth and cultural influence without (yet)
developing an effective strategy for rule. As the industrial bourgeoisie was
rising in the US in the early nineteenth century it kept advancing proposals
which amounted to a demand that the federal government subsidize its rise by
building roads, canals, railroads, and a network of research universities on
the German model. Their organization –the Whig Party— advanced these proposals,
but offered nothing to the working class or the small farmers who made up the
majority of the US population. It was only when the Republican Party joined the
Whig program of state subsidized industrialization to the promise of free land
in the West that the industrial bourgeoisie was able to come to power in the
US. Similarly, Hegel’s “universal class” of modern intellectuals went nowhere
politically until it linked its fortunes to those of the working class and
peasantry to build the modern socialist and communist movements. But both these
classes were able to make the moves they did because they had a vision for the
next steps in the human civilizational project, a vision in which their working
class and peasant allies were something other than failures and surplus
population, some tiny percentage of which might eventually “make it” with a
boost from their philanthropic ventures.
The new global elite lacks such a vision. While it is well
educated by contemporary standards, having received what passes for a liberal
education at most elite institutions in the US and around the world, they have
not really inherited the civilizational patrimony which such an education is
intended to pass on. Indeed, very much
a product of that strange cultural moment we call “the ‘60s,” they were
constituted by a rejection in principle of teachers and the inherited
civilizational wisdom they pass on. They lack the ability to make and evaluate
arguments regarding fundamental questions of meaning and value or to
participate in humanity’s ongoing conversation regarding such questions. For
the most part they don’t know what they want to do with the wealth and power
they have built, and even when they do they don’t know why.
And this brings us to the third implication of Freeland’s
analysis for our understanding of the current situation. We have, up until now,
argued that the enduring strength of the Right rests 1) in the growing economic
weight of the extractive sector due to resource depletion, 2) the salience of
pronatalism as a strategy both for defending a West threatened by demographic
inversion and for and advancing other, more conservative (e.g. Islamic)
civilizations which are still demographically expansive and 3) the resentment
of those (themselves relatively privileged) elements in the middle strata who
are being “left behind” by globalization and the information revolution (those
who are being told to take a “pay cut” to global market wages). These claims
remain correct. But there is a fourth reason for the enduring salience of the
Right. As the old Protestant elite has declined, it is only the Right which
has advanced a vision which takes responsibility for the human civilizational
project. Specifically, the Right has become, largely by default, the
custodian of the inherited wisdom of millennia of human civilization. Even the
new global elite, when it feels the need for authentic wisdom (and all human
beings do) depends either on gurus who themselves are, by any reasonable
description, civilizational conservatives or on New Age spiritual entrepreneurs
who are essentially parasitic on those masters.
Strategically this means that in our response to the current
civilizational crisis, we need to make a new civilizational conservatism an
integral part of our program. Let me be clear. There can be no concessions to
neopatriarchal pronatalist attempts to return women to “their place” as wombs
and nurturers. And we must continue our long standing resistance to the neoliberal-social
conservative discourse which links the market order to humanity’s
civilizational patrimony as one of many “spontaneous” orders (like language,
the family, and religion) which have proven their survival value. Markets may
well be a permanent feature of human civilization. The market order in
which resources are allocated without respect to substantively rational
judgments regarding the impact of various activities on the development of
human capacities is a perversion. Rather, we must actively compete with the
Right as the authentic custodians of the human civilizational project, showing
that our proposals for addressing climate change and demographic inversion and
our commitment to finding ways (beyond the market, beyond the state) to capture
a larger share of surplus for activities which promote the full development of
human capacities is, in fact more faithful to the heritage of humanity’s great
spiritual civilizations than their program of carbon spewing resource depletion
and neopatriarchal pronatalism –or, for that matter, the new global elite’s
obsession with the next new thing and its spiritual dilettantism which confuses
wishful thinking with authentic enlightenment.
This means, of course, that we must ourselves become worthy
custodians of that patrimony, like the wise scribe, who “brings out of his treasure old
things and new (Matt 13:52).” And we
must embody its highest spiritual principles and values, at once conserving
them and adapting them to the challenges of a new era. As Zhou Dunyi
put it: “The Sage
properly orders … [human affairs] according to the mean, correctness, humaness,
and righteousness … in this way he establishes the ultimate standard for
humanity.” When –and only when—we integrate authentic spiritual excellence with
a correct reading of history and outstanding strategic and relational
capacities will we be able to compete with both the Right and the new global
elite and lead humanity through these dark times.