Tag Archive for: inequality crisis

California is a Bastion of Innovation Marred by Deep Inequality. Is That America’s Future?

Everyone seems to be California dreaming these days. Much of America, particularly its red parts, see California as a hopeless dystopia best understood as everything the nation should avoid. Meanwhile, for the progressive Left and many around Joe Biden, California is the Mecca, a great role model being attacked by jealous reactionaries.

As in so many cases, both sides have a piece of the truth.

To be sure, despite the many well-documented problems, California still has an impressive economy that will shape the country’s and the world’s economic future—through the entertainment, space, critical software and social media industries and international trade. A spirit of experimentation and innovation persists across the state and fuels this industriousness.

Sadly, along with new technical and cultural innovations, the everyday reality outside the glamor zone presents a prospect as cautionary as it is aspirational, a harbinger of innovation marred by massive social inequality.

For the parade of startups and youthful billionaires coexists with the country’s highest cost-of-living adjusted poverty rate, the largest gap between the middle class and the rich, the most crowded housing and second lowest homeownership rate.

California once projected the essence of our common national dream. Today, its leaders increasingly see it as a kind of post-America, with its own racial, gender and environmental standards. It’s an approach welcome in Malibu or Palo Alto, but most Californians are left coping with the nation’s worst homeless crisis and rising crime. A ride on Highway 33 through the impoverished expanses of the Central Valley reveals a vast and bleak landscape of abandoned cars, dilapidated houses and threadbare shops.

The pandemic has accelerated California’s class divide, vastly enriching the tech elite and financial oligarchs but leaving California with the nation’s highest unemployment rate and making it the second hardest place to find a job.

Silicon Valley was once among the most egalitarian regions in the nation; today, as it has become more aggressively woke and taken to massively funding progressive Democrats, it has become one of the most segregated places in the country, what CityLab has described as “a region of segregated innovation.”

Times may be flush for venture capitalists and serial tech entrepreneurs, but they’re not so great for those who clean their own buildings and work in the food service industry. Nearly 30 percent of Silicon Valley’s residents rely on public or private financial assistance. African Americans and Latinos have seen declines in real incomes. The one percent pay roughly half of the state’s income tax and windfalls from IPOs fund the state’s ultra-generous pensions and an ever expanding welfare state—and yet, none of this creates good jobs.

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Class War is Just Beginning

With the seeming deconstruction of the Biden Administration proceeding at a rapid clip, many on the right hope for an end to the conscious stoking of class resentments that has characterized progressive politics. Yet despite the political meltdown, America’s class divides have become so wide, and so bitter, that Biden’s presidency may prove more a prelude than a denouement for the future of class warfare.

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Trouble in Paradise: The Crumbling California Model

Some horrified conservatives dismiss California as the progressive dystopia, bound for bankruptcy and, let’s hope, growing irrelevance. Progressives, for their part, hail the Golden State as the avatar of a better future, the role model for a new, more environmentally friendly and socially just economic order. They often dismiss critiques as conservative misinformation.

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Serfing the Planet

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 New Labor Crisis is the Biggest Opportunity in a Generation

The COVID-19 pandemic has left pain and tragedy in its wake. But it has also created a unique opportunity to address the country’s persistent class divides, thanks to a persistent lack of labor resulting from the pandemic. In a world economy that has seen labor’s share of income drop for generations, this labor shortage could provide some restored leverage for both white and blue collar workers.

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Joel Kotkin talks about the middle class rebellion against progressives, with Jamil Jivani

Host: Jamil Jivani
On: Jamil Jivani Show on Omny

Joel Kotkin talks with Jamil about the middle class rebellion against progressives that’s gaining steam.

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A Middle Class Rebellion Against Progressives is Gaining Steam

How Los Angeles Descended Into Neo-Feudalism and How to Fix It

For most of the last century, Los Angeles loomed as the next great American city, a burgeoning paradise riding the shift of world power west. It seemed posed to leave New York and London in the dust, the engines of growth inexorable. There was the city’s dominance of the entertainment and aerospace industries, which incited migration from both the rest of the country and abroad, and all this promise was symbolized by a spread of suburban single-family houses that seemed to embody the ideal American dreamscape.

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Joel Kotkin talks about what happened to social democracy, with Amanda Vanstone

Host: Amanda Vanstone
On: Counterpoint

What happened to social democracy? Joel Kotkin reminds us that it was born of the radical Left in Marx’s own time, social democrats worked, sometimes with remarkable success, to improve the living standards of working people by accommodating the virtues of capitalism. Now, he says that in its place, we find a kind of progressivism that focuses on gender, sexual preference, race, and climate change. He takes us through the history of social democracy to today’s progressives and says that arguably the single greatest distinction between social democracy and the new progressivism lies in the word ‘agency’. The original social democrats sought to enhance their economic power by mobilizing grassroots support. In contrast, today’s Left tends to favour rule by experts. They have a preference for censorship and the political repression of uncooperative political tendencies. How did this happen and why?

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Joel Kotkin Virtual Salon, on the Topic of Neo-Feudalism

Host: Virtual Salon
On: Fieldstead and Company

Fieldstead opened its 2021 salon series with Joel Kotkin, described by the New York Times as “America’s uber-geographer.” Joel is an internationally-recognized authority on global, economic, political, and social trends. His work over the past decade has focused on inequality and class mobility as well as how regions can address these pressing issues. Joel discusses his research findings from his recent book, The Coming Neo-Feudalism: A Warning to the Global Middle Class.

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Joel Kotkin on Menzies Research Centre: Medieval Mindset

Host: Nick Cater
On: The Watercooler Podcast by Menzies Research Centre (Soundcloud)

Joel Kotkin warns that traditional middle class aspirations and values such as family, nationhood and home ownership are under threat from a new class of oligarchs.

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