what is elite?

A friend challenged me to define what I meant when I said "elite." It was a fair question. So, here's my attempt at an answer.

Admittedly, "elite" is a pretty slippery term, and I understand the objections of those academics who say that it is simply not valid; that one can speak of influential groups, but not of any one elite (more on that in a moment). And I have read with considerable interest the arguments of those on the libertarian side of the spectrum who argue that the word unfairly demonizes the very individuals who are most responsible for economic progress, that is, the entrepreneurs who build new ventures and provide jobs.

That said, I respectfully disagree with both positions. While I have been accused (by people on the Right) of being politically Left …intellectually I am somewhat conservative. Or, perhaps, Old Fashioned is the term, I'm looking for. My conception of the world is derived from those theorists who argue that in almost any society one fairly small group tends to be predominate in decision-making. It will not monopolize all decision-making, but it will be predominant. (See #1 below).

Now, this decision making group is the "elite," that is, at small, highly interconnected circle which exists at the core of the society and which leverages far greater power than its numbers would suggest. It may draw that power from economics, from politics, from intellectual prowess, or from combinations of all these or more. It may define itself as Conservative, or Liberal, or Moderate. It may be based on millionaires or union leaders or tenured professors. It may include media barons, talk-show hosts, bloggers, film stars and (as in modern Italy) porn stars (2).

But, regardless of its make-up, it exists.

This may not be a comfortable political reality, but it does seem to be inevitable. Exactly 100 years ago, in 1911, the brilliant political theorist Robert Michels formulate what he called the "iron law of oligarchy," which states that no matter how democratic a nation may want to be, eventually power comes to reside in small band of administrators. In the century since Michels suggested his law, nothing has happened that (at least in my opinion) disproves him.

That said, elites are not necessarily a bad thing. Indeed, when they are good, they are very, very good. For example, the American founding fathers (and mothers)—particularly Washington, Jefferson, Hamilton, and the Adams husband and wife team—were genuinely awe-inspiring. All the postmodern and New Left critiques cannot alter the fact that those men and women were utterly amazing. They changed the course of history.

But, the Founders were competent. They might battle among themselves, engage in the fiercest party politics imaginable, even kill one another (as when Burr shot Hamilton), but they knew how to run a country and an economy. And they did it very, very well.

When elites are not competent, then things are painfully different. When it forgets that it has a common destiny with the rest of society, or when it is so busy with internal struggles that it fails to notice external enemies, or when it is so lethargic that it cannot respond to natural disasters, or …well, when it fails in a hundred other ways, it is doomed. If the society is lucky, then the larger culture won't go down with it.

I believe, further, that you can actually trace the development and evolution of elites over time. In particularly, I think you can follow them in terms of their sources of power (which will change with time).

Let's take just the American example. Here, unlike Europe, political power usually grows out of economic power. And, so, our first elites based their wealth on international trade—they were either ship-owners, as in Salem (once the richest city in North America) or they produced goods for export to England or its colonies.

After about 1810, though, the elite shifted its focus. Increasingly, it based itself on the ownership of land. (Think of all the presidents who were gentlemen farmers from Virginia). Also, everyone was a lawyer.

Then, starting about 1840, American elites shifted to commerce and industry—a situation that would eventually lead to clash of elites that we call the Civil War. And I think that's where it stayed until very recently. Oh, it expanded to include Press Barons (like William Randolph Hearst, a.k.a. Citizen Kane), more and more bankers, and still more lawyers…but basically that's where things stayed…

Until the 1930s, when we get two new players—people who headed-up large, activist, government agencies (ranging from the WPA to the Army), and University professors who cycle in and out of administrative or consultative roles with the government depending on which President is in power. For the first time, private business has a real competitor for the elite's attention.

Then, once more, things settle down for a while. Again, new groups are added over the course of time—the Press Barons become Media Moguls, film stars and other celebrities take on overt political roles, and so on—but, on average, the American elite remains in industry, commerce, the law, and government…with universities and Think Tanks acting as a kind of waiting room for elite members whose party is out of power for the moment. Come a new election, and they swap places with the other party's intellectuals.

Okay, but, then everything changes after the 1960s. As the nation de-industrializes, outsources, off-shores, etc., the elites begin to exit industry. Manufacturing is no longer an American specialty.

Where do they go? A couple of places: the boardrooms of multinational corporations and Wall Street. We can see that from studies of who earns what. According to one such, nearly 40% of the richest Americans are managers of large companies (I mean really large companies) while another 18% is connected to Wall Street.(3) Of course, there are other billionaires from other places, like Bill Gates and the late Steve Jobs, but on average it is in those segments, multinationals and finance, where we have our most powerful people.

Now, I submit that this elite has not shown itself to be particularly competent. They may not be as inept as some elites we've had in the past (during the Gilded Age, our elites were actually embarrassing), but underachieving all the same.

It is under the watch of these people that our economy has drifted dangerously close to disaster. They have allowed de-industrialization, which makes sense on paper but which is truly deadly in practice. They have shifted millions of jobs overseas. They have blundered into crisis after crisis—starting with the Savings and Loans scandals in the 1980s, then moving on from there to the current sub-prime mortgage mess. And, worst of all, they have allowed the transfer of more and more wealth from the middle classes to themselves.

None of this is good.

So, that is my definition of "elite." And it is why I think that elite needs to be reformed. It has ceased to be what elites are at their best, engines of creation, and become instead the very opposite.

And that is a condition which cannot long endure.


Footnotes

1) Technically, this is known as "elite theory" or "elite studies."
2) Italy's parliament has included porn star Ilona Staller.
3) Mike Konczal, Who are the 1% and What Do They Do for a Living?, New Deal 2.0, newdeal20.org/2011/10/14/who-are-the-1-and-what-do-they-do-for-a-living-61759/?author=101

The American Elite

My problem is that the American elite has proved itself stunningly inept. What has it managed in the last few decades? Well, let's see, it de-industrialized the country, shipped tons of jobs overseas, shifted trillions of dollars from the middle class to the one percent, plunged us into a Recession, and generally put the nation on the verge of collapse.

The thing is, on some level I'm a conservative. I know that societies will always have the leaders and the led and (alas) I'm never going to be in the White House or the Board Room.

But, come, let us face facts. If any corporation was run as badly as America has been, the stockholders would run the CEO out of town and sue the socks off the Board of directors.

adventures in cafe living

I'm writing this in Boston King Coffee, a great café in Woburn. I highly recommend it. But it took some little courage for me to come in here today. That's because my history with the place hasn't been exactly thrilling lately. You'll recall I've mentioned my adventures here a couple of times lately. First, I was in a while back and there was a robbery and shootout at a jewelry store directly upstairs. I spent the rest of the day behind yellow crime scene tape waiting to be interviewed by police. Then, second, last week, I went in again and got promptly balled out by a harpy-yuppie-bully-lady who was on a major psycho power trip and I happened to be handy. Great stuff if you want into verbal abuse. I'm not.

So, basically, hold your breath.

*

Twenty-four later. No bullets. No snotty aging yuppies with a Catherine The Great complex.

Three cheers.

more on ows and the media

watching a Daily Show re-run. In it, John Daily & Co. show a number of clips from various news and chat shows ... mostly on Fox, I assume...that basically trashed the Occupy Wall Street Movement as being somewhere between idiotic and treasonous, if not both.

Depressing. I am not sure which is worse. The misrepresentations of those who are blatantly lying, or dimness of those who fail to grasp what is happening.

OWS

I write for business publications now and then. I have, however, become concerned by some of them. Their coverage of the Occupy Wall Street protests is, I think, blinkered to say the least. Originally, they paid them no heed. Then, they mocked them. Now, they present the protestors as anti-capitalists and a threat to free enterprise.

Yet, in fact, the story is enormously more complicated. Some of the protestors are, indeed, radicals. Yet, others are most certainly not. Many are as devoted to free enterprise as anyone else in the middle class. They protest not because they hate profit, but because they can no longer make one. Quite simply, so much wealth has been so unfairly been transferred to the very rich from the rest of us in the last few years that economic activity has been almost impossible.

Thus, the revolution is not against capitalism but to save it. Failing to understand that is the first sign that one does not understand the world. For that reason, I fear for my editors.

Zen?

Spent most of the morning rewriting a piece of short fiction. There is a sort of Zen quality to this activity. You know that it may, indeed, be published…somewhere, someday, by some small literary journal…but it will make you no fortune. No material good will come of it. Let us be frank, indeed, and confess that no one may ever read it. Not even the editors of the journal…other than, of course, for the cursory glance.

Yet, you turn to it anyway, with a passion. You do not complain, or at least do so quietly, without expectation of redress. Is there, then, something spiritual to be gained? Do you emerge the better for it? Is your soul more pure?

I doubt that very much. But perhaps that is the point of Zen, if Zen can be said to have a point. What is the use of belles-lettres? May haps the value is not in the answer but the act of query.

BoA

Like everyone else I've been watching the slow disintegration of Bank of America with a mixture of astonishment and disbelief. First the bank imposes new fees on its customers for the use of debit cards and then, when faced with an overt customer revolt, basically does nothing except have its CEO issue a statement to the effect that BoA will do in what is in BoA's best interests, thank you very much, and if the customers don't like it, well, tough darts.

What strikes me most forcefully, though, is that this does not say good things about the general competence of BoA's management. Let us walk through the situation: in the midst of the worst economic downturn since the Great Depression, when nearly 10 per cent of the American people are out of work; when depositors are already rolling pennies to buy food; when the public's general impression of bankers is that they're unprincipled scum …

What does BoA do?

It happily plunges into a PR disaster and never even seems to notice.

Interesting.

Let's just say I'm not buying any BoA stock in the near term.

din of us altogether

Strange. I am writing here as if in a private journal. I am saying things that I would never have said in the old e-zine version of Xcargo, which went out regularly to 1000 people I knew would get it.

Yet, I can't help but think that my privacy will be…alas…almost perfect. The reality is that there are so many blogs, so many pages, so many forums, so many confessions expressed on the web that no one would have time to read them all. And I am relatively obscure, not to say boring. Who would search me out among all those other, most interesting choices?

Thus I fear for our liberty. We are helpless before our elites. We are silenced by them. Not by the usual process of gags and censors. But by babble. No one can hear any one of us in the din of all of us together.

ragged claws

Still mildly depressed today. Partly because of the incident in the coffee shop, which shook me more than I knew. (She was so fantastically self-important. So certain of her own superiority. Why is that so many of the most aggressive bullies one meets these days are women? Is this what Feminism really envisioned?)

But also because I'm in the midst one of those regrettable periods we have in life when you wonder if any of your acts has significance. If anything you do will be accounted as an accomplishment. If both your good, and evil, and (the majority part of our souls) the mostly-in-between will be interred with your bones. It is that moment when you suspect that you are not even Mr. Prufrock's ragged claws. Rather, you are the sand at the rank bottom of the depths.

It is a mood that, happily, does not last long. If it did, none of us would live beyond thirty. Doubtless I'll be all smiles by morning.

Once More At Boston King...and I am ashamed

Odd day, so far. Uncomfortable. I'm embarrassed. And a little worried about, well, things than more important than I.

Here's my story: I'd gone to a local coffee shop, Boston King Coffee. You may remember that was the one I was in when the jewelry store was robbed, and there were bullets flying about, and I ended up squatting behind yellow "crime scene, do not pass" tape for a day.

I hadn't originally meant to go there. I'd originally meant to go to a Dunkin Donut shop, but it was crowded so I headed up the road to Boston King.

I bought an iced coffee and worked for a bit on my laptop. Then a man came in and set up shop at one the tables near mine. He was professional in dress, suit and tie. A little while later, a woman joined him, also dressed very professionally, very confident. They sat and carried on a conversation about a subject I'm interested in. Suffice to say it had to do with schooling and apprenticeships. Apparently they had something to do with a program involved with same.

As an aside, their conversation included a lot of union bashing. It seems that our state, Massachusetts, is heavily oriented to union-based apprenticeship programs, and this has led to some difficulties for them. But this aspect of their conversation didn't concern me particularly so I didn't pay much attention to it.

Then I made a mistake. And I confess that it WAS my mistake and I was at fault. There was a lull in their conversation. I was curious about the school they were involved with because, like I say, it is an interest of mine. So, I leaned toward them, apologized for listening to their conversation, and started to ask what the school's name might be.

But I never got the chance. The woman, in a very quiet, very controlled, but very emphatic way, reamed me out. "This is a business meeting," she said. "If you wish to ask questions, you may do so when we are finished." And there was a quite bit more to that effect, but I don't remember it all.

In any case, I pulled back (of course) and spent a very uncomfortable few minutes at my table before I left the place. As I went, they were still at their very, very important conversation.

Now, as I say, I'm embarrassed, even a little ashamed. Because, of course, she was absolutely right. I was not invited into their conversation. I was an intruder. And, if I'm wholly honest with myself, I suppose that my desire to talk to them was partly motivated by something other than my professional considerations. A small part of me wanted to talk to them because, well, I was a little lonely.

So, on some level, I'm ashamed.

And yet, there is another aspect of the story. Perhaps a more troubling one. For, you see, I can't help but feel that the real issue was not the fact that I interrupted them, but that I was…for lack of a better word…déclassé. I think her real message was "I am important. You are not. Don't forget that fact."

In other words, I suspect that the social interaction wasn't that of me, the clumsy oaf, being rebuked…or at least not only that…but rather simple, primitive, schoolyard bullying. Something not far removed from the middle school Queen Bee deciding who can and cannot talk to the cool kids.

Which would be bad enough, but, again, it is only the beginning. These are the people who head the non-profit educational institutions which I believe to be vital to our economic survival as a nation.

There is something distressing in that fact.

*

Oh, one last note. As I look back on the scene, I don't think I recall there being coffee cups or plates on their table. I think they came in and sat and had their "business meeting," but never once purchased anything from the café itself. In other words, I think they simply came in and squatted, without paying the fee in goods and services that a café owner should be able to request for taking up space and tables during a lunch hour.

I wish I had noticed that at the time. I wish I had mentioned it to them. It would have given me some, small consolation.

Alas, I did not.

On the postindustrial aged…

I've written that there is a growing disconnect between the needs of the Powers That Be of the postindustrial age and the rest of us. If you'd like to test that, perform the following little experiment. Gather together fifty or so people over sixty five (preferably older) and ask them about their medical care.

You won't have to wait long before you get stories about how they have been denied important medical treatments…because of their age. And I'm not talking heroic measures here—not say, face transplants or radical new therapies that come with zillion dollar price tags. I mean fairly normal, fairly inexpensive things…like some forms of chemotherapy or even physical therapy. Yet, you will hear that these people were denied because, after all, "you're old" and don't have that much time left anyway, even if you're only in your sixties and have at least a good twenty years of productive life to come.

If one were paranoid, one would suggest that such behaviors were part of a deliberate policy of, shall we shall? Thinning out the herd a little. I'm not (I think) quite on that level of suspicion, but, really, it doesn't matter. You don't need to propose a sinister plot to observe the effect. Simple economics—postindustrial economics, which do not love people—are quite enough to explain the seeming inhumanity of our era.

A community of interest

There will be a curious community of interest between the great corporations and we who are no longer of value to them. They want to be rid of us. We need to find a way to survive without them. It will, then, be in the interest of the great economic powers to assist us in the creation of alternative economic structures—what I call the deuxiéme economy—by which we can support ourselves. These alternatives will be much cheaper than welfare, and much, much, much less expensive than dealing with the consequences of mass destitution and its attendant violence.

The deuxième economy

The thing to remember about the so-called "postindustrial" economy is that it isn't just post-industry, it is actually post-human—and I don't mean that in the positive sense that the "Transhuamanists" use the term, i.e., for super-intelligence and 2001-style Star Children. Rather, I mean that the new economy is actually post-people. It doesn’t like people, or, really, need them.

Increasingly, it doesn't want them as workers. Labor is ever more performed by machines, or by contractors in China. And, increasingly, it doesn't want them as customers. More and more, large businesses do business with other businesses—B2B, as it's called.

In a very real sense, then, the traditional drivers of the economy, the great corporations, have ascended into a higher order of existence, leaving us behind. The most pressing issue for the nation -- and, indeed, for the whole of the West -- is what to do about that.

My suspicion is that we shall create a second level of economic activity, one that is "below" that of the big corporations. This other, second level — I call it "la deuxième" in an attempt to remove the nuance of lesser importance—will be what provides employment, services, health care, education, products, and just about everything else to those of us who are not in the favored 1% of the population that controls so much of the world's wealth.

And what will the deuxième be like? I'm guessing it will be a welter of smaller economic entities, limited in scope, local in effect, and coming in a thousand different flavors of ownership—partnerships, family businesses, sole proprietorships, co-operatives, non-profits, communes, corporations of the sort that the British call "Community Service Corporations" and Americans call "Low-profit Limited Liability Corporations," and many others as well.

And, yes, as you've already guessed, there is nothing radical in this proposal. It is precisely what people have done whenever large businesses found them to be unprofitable. It was to Co-ops that farmers turned in the Middle West during the Gilded Age. It was to Credit Unions and Savings and Loans (before S&Ls were demolished during the Reagan Years) that ordinary men and women went for mortgages and home loans.

Indeed, in a strange way, it may be that the deuxième economy will be the most conservative of all economic developments. It is a return to the small-scale enterprise of a hundred years ago.