The Third Pillar by Raghuram Rajan

Author:Raghuram Rajan
Language: eng
Format: epub
Publisher: Penguin Publishing Group
Published: 2019-02-25T16:00:00+00:00

THE GROWING DIVIDE

Surveys of people’s values across developed countries suggest that people tend to have greater trust and affinity for strangers, as well as are more concerned about the wider world beyond their immediate families, when they are economically secure.6 This partly explains why developed countries became significantly more open and generous to immigrants and minorities in the prosperous 1960s. The resulting policies, unfortunately, exacerbate domestic divisions today.

Developed country societies became progressively more socially liberal, as the well-educated children of prosperous 1960s middle-class parents became the tolerant vanguard of movements that pressed for the rights of the historically downtrodden, benefiting women, minorities, immigrants, and those in the LGBTQ+ community. In an insightful, satirical book, the New York Times commentator David Brooks labeled this new elite Bobos—bourgeois bohemians—because they had the work ethic of the single-minded Calvinist while retaining the social liberalism that only rebellious youth from a secure upper-middle-class background could have.7

Moderately educated male white workers, on the other hand, experienced the dwindling in decent job opportunities at the middle of the income distribution that we noted in the previous chapter. To the elite, immigrants and the newly empowered minorities were well-educated coworkers, sharing in the expanding numbers of high-quality jobs, and offering a daily testament of their own fair-mindedness. To the moderately educated worker, they were competition for scarce good jobs. As their economic security and social status became more fragile, the moderately educated became less able and willing to accommodate change.

There was a debate worth having about the merits of an open society—one open to trade, to new people, and to new ideas and values. It was not, however, a debate that took place, because the elite did not engage as they abandoned the integrated community. It was hard to fault their choice, though. The meritocratic markets now demanded it, and as they have throughout history, tested the community.

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