Serfing the Planet

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Like its global predecessors, the COP26 Glasgow conference will usher in a new wave of apocalyptic warnings about climate change. It will also likely prove no more successful, in terms of actually addressing the issue, than its predecessors, particularly as China, India and other developing countries ramp up their emissions.

Nevertheless, none of this will force the climate activists to reconsider how the current strategies against global warming could break the backs of the already beleaguered working and middle class. (For British readers, I use the phrase ‘middle class’ here in the American – less bourgeois – sense.) The climate chorus of celebrities, oligarchs and royals may feel virtuous, but for most people the future could prove to be propertyless proletarianisation. Many of those in Glasgow at the moment pray at the altar of ‘de-growth’. They want to limit the consumption of the working and middle classes, undermine their jobs, raise their energy bills, and inhibit their ability to buy property or travel.

These policies are fine with ‘woke’ corporatists like BlackRock, who see enormous profits in the regulated shift in energy, even as they seek to expand their business with the world’s dominant polluter, China. What’s missing is any focus on how to cut emissions without causing high inflation, raising energy prices and destroying the middle class. So far, more palatable options, like increasing remote work, geothermal energy, natural gas, nuclear power and varied new technologies, have not managed to get on to the agenda.

With climate, as with many other issues, the upper classes are inflicting their own preferences on working- and middle-class people. As nonprofits, oligarchs and bureaucrats plot out the future, small business owners and the middle class, as one entrepreneur put it, are ‘not at the table – or even in the room’. This is the very class – what I refer to as the yeomanry – that has driven much of the West’s economic progress and nurtured self-government. Democracy was born when both Athens and later Rome included small property owners in governance. Democracy died when these small owners lost power to what Aristotle labelled the ‘oligarchia’.

After the autocratic Middle Ages, both human progress and self-rule came back as the middle classes began to rise – first in Italy but then more profoundly, and more pervasively, in the Netherlands and the British Isles, before spreading to North America and Oceania, where there was no true hereditary aristocracy. Students of classical experience, such as Thomas Jefferson, James Madison and John Adams, all considered the over-concentration of property in a few hands as a basic threat to republican institutions, an insight shared by such intellects as Edmund Burke, Alexis de Tocqueville and Adam Smith.

After the brutalities of the early Industrial Revolution, and two world wars, the middle class thrived not just in America, but also in Britain, Australia, Canada and increasingly in East Asia. But by the 1970s we began what has become an inexorable march towards an ever more feudalistic structure. The Organisation for Economic Cooperation and Development has noted that, across the 36 wealthier countries, the uber-wealthy have taken an ever greater share of national GDP in recent decades, while the middle class ‘looks increasingly like a boat in rocky waters’.

These patterns are clearly evident in the United States, where wealth gains have been especially concentrated among the top 0.1 per cent. The share of national wealth held by those below the top 10 per cent has fallen since the 1980s by 12 percentage points, the same proportion that the top 0.1 per cent have gained. Today, roughly half of all Americans earn less than $35,000 annually, living essentially pay cheque to pay cheque.

Even with their robust social-welfare provisions, over two thirds of European Union countries, including Sweden, have experienced declining social mobility. Germany is significantly less equal than its EU peers, with richer households controlling a bigger share of assets than in most other Western European states. The bottom 40 per cent of German adults hold almost no assets at all; barely 45 per cent of Germans own homes. Even in theoretically socialist China the top one per cent of the population hold about one third of the country’s wealth. Meanwhile, the prospects for the Chinese middle class are fading, particularly in light of the recent debt and housing crisis.

Read the rest of this piece at Spiked.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Paul Farmer, via Geograph.org.uk, CC 2.0 License.

The Great Office Refusal

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The pandemic has cut a swath through our sense of normalcy, but as has been the case throughout history, a disastrous plague also brings opportunities to reshape and even improve society. COVID-19 provides the threat of greater economic concentration, but also a unique chance to recast our geography, expand the realm of the middle class, boost social equity, and develop better ways to create sustainable communities.

Driven partly by fear of infection, and by the liberating rise of remote work, Americans have been increasingly freed from locational constraints. Work continues apace in suburbs and particularly in sprawling exurbs that surround core cities, while the largest downtowns (central business districts, or CBDs) increasingly resemble ghost towns.

This shift has made it more practical for individuals and particularly families to migrate to locations where they can find more affordable rents, and perhaps even buy a house. But such a pattern may be countered by investors on Wall Street, who seem determined to turn the disruption to their own advantage by gearing up efforts to buy out increasingly expensive single-family homes, transforming potential homeowners into permanent rental serfs and much of the country into a latifundium dominated by large landlords.

We are in the midst of what the CEO of Zillow has called “the great reshuffling,” essentially an acceleration of an already entrenched trend of internal American migration toward suburbs, the sunbelt, and smaller cities. Between 2019 and 2021 alone, a preference for larger homes in less dense areas grew from 53% to 60%, according to Pew. As many as 14 million to 23 million workers may relocate as a consequence of the pandemic, according to a recent Upwork survey, half of whom say they are seeking more affordable places to live.

This suggests that the downtown cores of U.S. cities will continue to struggle. Since the pandemic began, tenants have given back around 200 million square feet of commercial real estate, according to Marcus & Millichap data, and the current office vacancy rate stands at 16.2%, matching the peak of the 2008 financial crisis. Between September 2019 and September 2020, the biggest job losses, according to the firm American Communities and based on federal data, have been in big cities (nearly a 10% drop in employment), followed by their close-in suburbs, while rural areas suffered only a 6% drop, and exurbs less than 5%. Today our biggest cities—Los Angeles, New York, and Chicago—account for three of the five highest unemployment rates among the 51 largest metropolitan areas.

The rise of remote work drives these trends. Today, perhaps 42% of the 165 million-strong U.S. labor force is working from home full time, up from 5.7% in 2019. When the pandemic ends, that number will probably drop, but one study, based on surveys of more than 30,000 employees, projects that 20% of the U.S. workforce will still work from home post-COVID. 

Others predict a still more durable shift: A University of Chicago study suggests that a full one-third of the workforce could remain remote, and in Silicon Valley, the number could stabilize near 50%. Both executives and employees have been impressed by the surprising gains of remote work, and now many companies, banks, and leading tech firms—including Facebook, Salesforce, and Twitter—expect a large proportion of their workforces to continue to work remotely. Nine out of 10 organizations, according to a new McKinsey survey of 100 executives across industries and geographies, plan to keep at least a hybrid of remote and on-site work indefinitely.

The shift of work from the office to the home, or at least to less congested spaces, threatens the strict geographic hierarchy of many elite corporations. Some corporate executives, like Morgan Stanley’s Jamie Dimon, are determined to force employees back into Manhattan offices, like it or not. It’s now a common mantra among like-minded executives, especially those connected to downtown office development, that workers are “pining” to return to the office. Some have even threatened employees who do not come back in person with lower wages and decreased opportunities for promotion, while offering to reward those willing to take the personal hit of coming back on-site every day.

Read the rest of this piece at Tablet.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Steven Zwerink via Flickr under CC 2.0 License.

Can the South Escape its Demons?

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Out on the dusty prairie west of Houston, the construction crews have been busy. Gone are the rice fields, cattle ranches and pine forests that once dominated this part of the South. In their place sit new homes and communities. But they are not an eyesore; the homes are affordable and close to attractive town centres, large parks and lakes. These are communities rooted in the individual, the family and a belief in self-governance.

The new American Dream has its heart in the states of the old Confederacy. But its allure does not merely lie in a conservative embrace of lower taxes, less regulation and greater self-reliance, although these surely matter. More important are the opportunities that come from building businesses and owning new homes, not for the privileged few but for an increasingly diverse, and growing, populace.

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To Make Homeownership Affordable in California, Rethink the Suburbs

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California’s future as a place of aspiration is fading for all but the wealthiest residents — with that promise nearly out of reach for young people and new immigrants.

This state has become a place marked both by spectacular successes and by not-so-welcome superlatives. The rise of the tech giants, engines of wealth creation, coexists with the nation’s highest cost-adjusted poverty rate, the second-lowest rate of homeownership among the states and the greatest concentration of overcrowded housing in the nation.

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Feudal Future Podcast – The Reshoring Revolution

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On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by JR Turner, Michelle Comerford, and Harry Moser to discuss the practice of reshoring, or bringing manufacturing back to the United States.

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The Fading Family

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For millennia the family has stood as the central institution of society—often changing, but always essential. But across the world, from China to North America, and particularly in Europe, family ties are weakening, with the potential to undermine one of the last few precious bits of privacy and intimacy.

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Big D is a Big Deal

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Located on the Southern Plains, far from America’s coasts and great river systems, the Dallas–Fort Worth metropolitan area epitomizes the new trends in American urbanism. Over the past decade, DFW has grown by some 1.3 million people, to reach a population of just under 7.7 million, making it the nation’s fourth-largest metro, based on new figures from the 2020 census. Rather than building on natural advantages, the metroplex owes its tremendous growth to railroads, interstate highways, and airports, plus an unusual degree of economic freedom and affordability.

There’s an adage in Texas about a braggart being someone who’s “all hat and no cattle.” But you can’t say that about “Big D,” rapidly emerging as the de facto capital of the American Heartland. The DFW metroplex is now home to 24 Fortune 500 company headquarters, trailing only New York and Chicago; 40 years ago, the region had fewer than five. DFW’s economy has grown markedly faster than those of its three largest rivals (New York, Los Angeles, and Chicago), and it has come through the Covid-19 pandemic with less employment loss than any other metro among the nation’s 12 largest.

Population, too, has surged almost three times faster than the average for the nation’s 50 largest metros. Much of this growth has come from net domestic migration: among America’s top 20 metros, DFW boasts the fourth-highest rate of net inbound migration (including millennials), and the area has experienced a massive surge in its foreign-born population. Demographers project that DFW will reach 10 million people sometime in the 2030s, surpassing Chicago to become America’s third-largest metro area.

Dallas–Fort Worth is emerging as a megacity but a distinctly polycentric one—more like Los Angeles than New York or Chicago. As of 2017, the Dallas central business district contained only 11 percent of DFW’s total office space and only 5.2 percent of the region’s office space under construction. Even including Fort Worth’s smaller downtown, the area has a smaller share of its office space in traditional downtowns than almost any other large American city. Since 2010, more than 87 percent of the metro area’s population growth has been outside the city of Dallas, as has virtually all the region’s job growth. That growth has been concentrated in two corridors: one stretching from the northern suburbs almost to the Oklahoma border; and another radiating outward from downtown Fort Worth.

At the same time, some of the region’s core urban areas, particularly Southern Dallas, continue to struggle. If DFW is really going to vault into the ranks of top-tier global cities, it will need to offer not just suburban safety and quality of life but also more options for those who want to live in a traditional urban setting, as well as better economic opportunities for residents of neighborhoods that have been left behind.

Farmer and lawyer John Neely Bryan founded Dallas in 1841, when he claimed a plot of land on an eastern bluff overlooking the Trinity River. Settled after the Civil War by Confederate veterans (Bryan himself served as a Confederate soldier) and freed slaves, the Dallas–Fort Worth area unequivocally belonged to the South in its attitudes and social relations up to the early twentieth century.

Between 1880 and 1900, the city of Dallas grew fourfold, exceeding 40,000 in population, based on its position as a railroad junction and a cotton-trading hub. Fort Worth, meantime, boomed in the late nineteenth century as a key stop on the great Western cattle drives. Early on, the region developed a reputation as a violent, riotous place—a Wild West outpost known for spawning legendary figures from Doc Holliday to Bonnie and Clyde, as well as carousing cowhands and other unsavory sorts.

In the early twentieth century, the Texas oil boom raised the region’s profile, making Dallas a local financial center. Still, the state’s economy depended on resource extraction, an industry controlled by the big eastern cities. Texas remained, in the words of governor (and Dallasite) Pappy O’Daniel, “New York’s most valuable foreign possession.”

But even as they genuflected eastward, the young city’s business leaders had big plans and a talent for self-promotion. As Fortune observed in 1949, “Dallas doesn’t owe a thing to accident, nature, or inevitability. . . . It is what it is . . . because the men of Dallas damn well planned it that way.” Starting in the 1930s, the Dallas Citizens Council, a business group representing what historian Darwin Payne has called “the local oligarchy,” remade the city, building parks and cultural institutions, promoting the growth of Southern Methodist University, and creating annual tourist attractions—especially the State Fair of Texas and the Cotton Bowl college football classic.

Their efforts paid off. New York travel writer John Gunther dismissed Houston as uncouth and money-obsessed in a 1946 profile but praised Dallas as “a highly sophisticated little city,” with fine hotels, restaurants, and department stores, epitomized by Neiman Marcus. Gunther described downtown Dallas as “a mini-Manhattan.”

Read the rest of this piece at City Journal.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

J.H. Cullum Clark is Director, Bush Institute-SMU Economic Growth Initiative and an Adjunct Professor of Economics at SMU. Within the Economic Growth Initiative, he leads the Bush Institute’s work on domestic economic policy and economic growth. Follow him on Twitter @cullumclark.

Feudal Future Podcast – Inside the Republic of China

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On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Leading Historian Ross Terrill, to discuss the history and likely future of the Republic of China.

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Critical Race Theory Ignores Anti-Semitism

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National Socialism, Maoism and Marxism-Leninism all have one thing in common: they boil down human experience to one aspect, such as race or class, and diminish the struggles and achievements of much of humanity.

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How America Abandoned the World—and Our Own Inner Cities

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In America and across the globe, COVID-19 is diminishing people’s prospects, exacerbating inequality and creating ever-more feudal societies as the pandemic ravages the health and the pocketbooks of the poor and the poorly educated.

Globally developing countries are suffering from what The Nation describes as “a gargantuan north-south vaccination gap” between developing countries where fewer than 10 percent of people have been vaccinated compared to around 70 percent in Western Europe, Israel, Canada and US. And within affluent countries, there’s nearly as wide a gap between well-off and well-educated populations, and rural and urban backwaters still suffering from “a pandemic of the unvaccinated.”

In the long history of pestilence and plague, French historian Fernand Braudel noted, there was always a “separate demography for the rich”. As today, the affluent tended to eat better and could often escape the worst exposure to pestilence by retreating to country estates, while the poor have been left to fend for themselves as “victims of the urban graveyard effect” that’s persisted since the fall of Rome.

Despite attempts in the media to deny or downplay the links between density and disease, COVID death and infection rates remain worse in dense urban counties where poorer residents often have to navigate insufficiently ventilated enclosed spaces that their more affluent and mobile counterparts have been mostly able to avoid.

Generally speaking, educated and affluent city and suburban dwellers recovered their incomes within the first year of the pandemic, even as millions of Americans have fallen into poverty or are on the verge of destitution, and the federal moratorium on evictions is about to expire. Overall, upper-income workers recovered completely while lower-wage workers suffered major income declines.

As of May, employment for those making $60,000 a year or more is up by 7.4 percent since the pandemic began, while employment for those making $27,000 a year of less has plunged by 21 percent, according to tracktherecovery.org. The drop in low-wage employment has been even steeper in affluent areas, like Manhattan, as the high-wage workers who had clustered there are now dispersed while working remotely and buying services in their new locales.

This trend could accelerate if new pandemics emerge in the near future, as many fear they will. But for now, at least for developed countries, vaccinations offer a way out. Since January, COVID-19 has dropped from the leading cause of death in America to the seventh leading cause. But even here, the widely varied inoculation rates suggest future social problems, particularly as COVID-19 is becoming “hyper-regionalized” in communities with both low vaccination and low immunity rates, according to former FDA commissioner Dr. Scott Gottlieb.

These come primarily in two very different, but historically impoverished and poorly educated populations: rural America, where the national media has mocked the people getting sick as Trumpist rubes, and inner-city America.

Read the rest of this piece at Daily Beast.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: MCJ1800, via Wikimedia under CC 4.0 License. Composite, R. Howard.