Friday, October 16, 2009

Notes on Social Class in America (Part 1)

I recently starting working with a friend on a study of kids social relationships in school, with the main question being how much 'race'/ethnicity* and social class influence children's social relationships in the school. The school itself is an interesting site for this question as it is a lab school at a major university, drawing children from a range of income levels and 'race'/ethnicity groups in the Los Angeles area. So, unlike many neighborhood schools in Southern California where there is likely lower levels of diversity both in terms of income groups and in terms of 'race'/ethnicity, the levels of diversity in this school are much higher.

This research project dovetales with the teaching I have been doing in urban anthropology, particularly involving the comparative and ethnographic studies of urban poverty. Naturally, in discussing urban poverty, notions of class and 'race'/ethnicity (as Wacquant defines it below) are central, and the two are fundamentally intertwined. However, for today, I want to get some thoughts down on the dimension of social class and some basic ideas about how it is defined.

When trying to understand what class means in society, there are two general themes that I have noticed so far across multiple readings. The first theme locates social class by the ranking of various groups that make up the larger society. These groups are identified according to the assumptions the theorists make about the organization of society. Within these discussions of class one can find theories of society based on the structural organization of society according to the logic of its inherent economic & bureaucratic/political processes (e.g., Marx and Weber) or the more "empirical" model of society that has no theory of society other than that yielded by the particular means of measuring the construct of "social-economic status". So, while Marx and Weber understood society and the social class-system within it as a system of relations of economic production and political power, the empirical theorists have understood social class simply in terms of the empirical indicators that have traditionally been used to measure the construct "social-economic status" since over the last 50 or 60 years (e.g., William Warner, Social Class in America, 1949). These empirical indicators of "social-economic status" traditionally consist of levels of income, education, and occupational prestige. This latter view of social class affords a very simple model of society as a social-economic pyramid, where classes are arranged from low to high, primarily based on their levels of income.

The second theme focuses on the problem of "economic mobility," this is is essentially a liberal-economic problem, focused on how individuals can be given the full range of opportunities to improve their social economic status. Naturally, it is based on the theory of social class as "social-economic status" and how levels of education and occupational prestige naturally translate to increased income (and, as a result, the elevation of one's social economic status). The main project of social mobility theory is to understand the individual and social barriers to full economic participation --or the full availability of "opportunity" in America-- and then advocate policies that would aid in removing these barriers.

Apropos of these last comments, Ron Haskins and Elizabeth Sawhill at The Brookings Institute have a new volume that examines the question of "economic mobility" in America available online today. Check it out at its web site.

I should say that the continental view of class (represented by Marx and Weber) still presents itself as a very important model, but not one that is adequately handled by social-economic status and social mobility theories. For me, I am specifically thinking of the way one position in the system of production, i.e., the way one earns income (i.e., wages vs. profit vs. rents), has a fundamental role in shaping strategies for household management -- not to mention political interests -- ...But I digress, this topic will have to wait for another day.

*Loic Wacquant in his recent book Urban Outcasts (2008) gives a wonderful justification for the placement of 'race' in quotation mark:

'Race' is put in quotation marks to stress that (i) racial identity is but a particular case of ethnicity (one that falsely presents itself as, and is believed to be based on, biological inheritance), i.e., a historically constructed principle of social classification; (ii) the gamut of social and symbolic relations designated by 'race' (or 'colour') varies significantly from one society to the next and from one historical moment to the next; and with it (iii) the mechanisms of (re)production of racism as a mode of domination invoking nature as the principle of domination. (p. 17)

Friday, October 2, 2009

More on GDP vs. Well-Being measures....

Here is another take on the Stiglitz and Sen effort to move metrics of economic health beyond GDP ...


Simply put, the GDP is a measure of economic performance that represents the value of all the goods and services in an economy based on prices being charged. But there has long been discussion of the metric's alleged deficiencies; namely, that it does not take into account factors such as disparity in the distribution of wealth, depletion of natural resources, underground economies, and the quality of goods and services.
Stiglitz, Sen, and their colleagues say that such deficiencies helped portray the U.S. economy, and to a larger extent the global economy, as being in better shape than it actually was before the credit crisis hit. "In a performance-oriented society, what you measure affects what you do. If you have the wrong measures, you can wind up doing the wrong thing," asserted Stiglitz at a seminar last Friday sponsored by law firm Labaton Sucharow.
A key problem, according to Stiglitz, was that faux profits were factored into GDP calculations. He noted that, for example, 41% of all corporate profits in 2007 were generated in the financial sector and tied to debt. In other words, the gains were "borrowed from the future," he said.
As a result, the massive subprime-related losses that financial institutions booked in 2008 wiped out not only the profits from 2007 but also those from the preceding five years. "They were not really profits, but we recorded them as fantastic years," asserted Stiglitz.
Further, during the bubble-based run-up to the economic crisis, prices of output or capital were much higher than they should have been — 30% or more higher in the case of real estate. So the value of all goods and services being used to calculate the GDP "overestimated output," he concluded.
The GDP also fell short as a measure of sustainable growth, because the U.S. consumption boom between 2003 and 2007 was based on debt, and borrowing to generate consumption is unsustainable, added Stiglitz.
Another fundamental measuring mistake relates to household income. Adjusted for inflation, median household income in 2008 fell to $50,303, which was 4% below its 2000 level and continued a downward trend that had been accelerating for some time. That's "a striking statistic," said Stiglitz, because the GDP per capita for the same period climbed from $33,700 in 2000 to $38,100 in 2008 (adjusted for inflation).
The counterintuitive trend is explained by the increasing financial inequality within American society, which allows the two measures to go in absolutely different directions. The implication, according to Stiglitz, is that most citizens' standard of living goes down while the GDP goes up.

Read the whole thing for more.... [Link]