Inequality in America has been widening rapidly in recent decades resulting in a minority reaping the majority of the economic rewards. This state of affairs, as Lindsey recognises, is unstable and undermines overall economic growth. So I looked forward to reading the new thinking on the reasons for this widening inequality promised by the cover of this book. I was deeply disappointed.
Instead of new insights, it churns out the same old arguments that regularly crop up about the cultural shortcomings of the working class leading to their own economic failures and that of their children. This telling is no more convincing for the new context in which Lindsey aims to place them than any of the previous versions.
Lindsey's basic thesis is that from the industrial revolution onwards we have entered an age of increasing complexity. This, he argues, has had two major impacts. First, we have all become smarter. From an overview of all of human history in two short chapters, he concludes that the ‘market economy and modern science’ have led to ‘unprecedented levels of analytical sophistication and rigor’. From this he concludes that ‘human capital’ – the commercially valuable knowledge and skills people have – has replaced real capital – stocks and shares and equipment – as the key driver of capitalism.
The second pillar of his argument is that this increasing smartness is unevenly shared. For those in the upper third or so of the socioeconomic scale, increasing complexity has resulted in greater investment in human capital which has led to greater opportunities to ‘put those investments to productive use’ – which in turns makes them smarter still. The socioeconomic elite is able to analyse and think long term. Its members can even ‘govern their desires and curb their appetites through a relatively flexible and customized process of making trade-offs’.
The working class, by contrast, have only modest thinking skills. Perverting the British educationalist Basil Bernstein's concepts of ‘restricted’ and ‘elaborate’ codes he argues that these differences in language usage show the limitations in working class ways of thinking. Bernstein himself drew attention to these different ways of speaking to draw out the cultural mismatch between the language of working class children and that used in schools and certainly not to imply any lesser intelligence (Bernstein, Reference Bernstein1971). But Lindsey goes further: the working class tend to lack long-term goals and rely on others to ‘keep their lives in order’. And this lack of drive and motivation is passed on to their children through a laissez-faire child-rearing philosophy, quite different to that of interventionist middle class parents.
Such simplistic cultural explanations get us nowhere. There is, of course, a link between parenting and educational outcomes for children. Strong parent/child relationships are associated with higher cognitive abilities (Gutman et al., 2009). But it is not the case that that working class parents have different parenting styles to others. The ESRC-funded Poverty and Social Exclusion survey of 2012 examined different parenting styles by income level and found very few differences (Lansley and Mack, Reference Lansley and Mack2015).
Lindsey dismisses off-hand the idea that children's outcomes are related to parental income, drawing on the 1997 work of the University of Chicago's Susan Mayer to back up his case (Mayer, Reference Mayer1997). It is a work that is not without its critics; other work from that time finds that family income, in and of itself, does matter and does affect children's academic outcomes (Brookes-Gunn and Duncan, Reference Brooks-Gunn and Duncan1997). There are many ways in which lack of money affects children's outcomes, from being unable to concentrate at school because they are hungry to not being able to join in with the activities of their peers to reduced opportunities outside school.
Most studies conclude that both parenting styles and income, independently of one another, matter (Kiernan, Reference Kiernan2010). Rising levels of poverty are having an impact; increasing numbers are, for examples, missing out on school trips, a hobby or a holiday (Lansley and Mack, Reference Lansley and Mack2015). Moreover, the degree of inequality also matters. Overall, countries that have low levels of inequality have higher levels of social mobility and better outcomes for children from poorer backgrounds (OECD, 2010). Lindsey's one-sided and partial analysis of the evidence hardly strengthens his case.
Moreover, simplifying the arguments of those who (like myself) would argue for the importance of structural factors as being interested only in handing out money is to tilt at windmills. There are many structural factors that impact on people's chances, from differential schooling opportunities to the types of employment available. But Lindsey accepts none of this ‘because, quite simply, culture is trumping economics’ – as if there was an inseparable divide between them and they acted independently.
His solutions for the poor being trapped in what he sees as a vicious cycle of downward mobility is for policies that encourage ‘healthy’ cultural change. Perhaps not surprisingly for someone from the right-wing, free-market-oriented, Cato Institute, these include things like ‘encouraging entrepreneurship’, removing the ‘regulatory barriers to entrepreneurship’ and ‘unleashing competition’ – though quite how these fit into his earlier analysis is less clear. He certainly does not want European-style redistribution which he sees as both counter-productive and fiscally unsustainable.
These policy proposals are fairly modest. Even on his own terms, they are unlikely to tackle what he sees as the problem, shifting those lazy working class people into having the thinking skills that enable them to cope with modern complexity.
As his book completely ignores what I, and many others, would regard as the main drivers of inequality – systematic changes in the nature of work, shifts in the proportion of income away from workers to shareholders, and sharply increasing income differentials, for example – this failure to put forward policies that might go some way to tackling growing inequality is hardly surprising. But then I would challenge his basic premise that what matters now is ‘human capitalism’. This seems to me like an alternative universe where the financial crash didn't happen and the rise in the power of economic capital is simply ignored.
