The permanent problem

Much has been made in this election of the split between the rich and the rest of us - the 1% vs the 99%. And President Obama at least keeps harping on how his liberal policies are going to change this. But I wonder if it can be changed, whatever a politician promises.

It is true that a relative handful of overpaid CEOs and hedge fund managers seem to have figured out how to game the system to their advantage, but they really only represent a small fraction of the much-demonized 1%. Most of that upper 1% (really more like the upper 5%) are paid much more than the national average because they are smart, well-educated, and working in the new "knowledge industry" that is driving much of the world economy, and especially the America economy, these days. Murray's book Coming Apart (cited in this blog a few days ago) addresses just this issue.

It is a fact that people in the "knowledge industry" get paid much more on average than those in most other industries. Nor is this likely to change any time soon, since in fact they produce more "value" (products/services people are willing to pay good money for) per labor hour than workers in most other industries. It is simple economics.

It is also a fact that people have to be smarter and more educated than average to work in these new "knowledge industry" fields. They need to be smart enough to get through at least undergraduate college, which implies a minimum IQ of about 120, about 1 1/3 standard deviations above the average. That limits the available pool of talent to only about 1 person in 10, and no government program, however ambitious and well funded, is going to change that. (Dumbing down college, as some have tried to do, obviously doesn't solve the problem).

Given these two facts, I don't see how any program or government policy, however clever and well-intentioned, is going to appreciably change the situation. It may make good political rhetoric to promise to level the "playing field", but in fact there is no way to level the playing field - the smarter elite are going to continue to make more than the rest of the nation, a good bit more. It is neither fair nor unfair - it just is.

This gets us back once again to the question I have pondered in other posts - in a highly advanced technological society, where even the proverbial ditch digger needs to be relatively highly skilled and educated, what does the social system do with those who are simply not capable of functioning at a high mental or technological level? And especially what does the system do if that group constitutes the majority of the nation?