Elite overproduction, indicated as a precursor for past crises, is certainly an issue. That means there is upward mobility of a number of people from the upper 10% into the elites. However, I would posit that it is not only the quantity of the elites, but also the quality - in the US, the level of wealth ‘pumped’ into the elites is staggering. (Elon’s the trillion dollar man now?!) The economy isn’t infinitely expansive in wealth creation - the wealth pumped to the elites comes at the cost of everybody else in some form. So, the “quality” of the elite wealth dictates the inverse quality of the precariat. To the point where the precariat finds the housing and bus fares to be a substantial burden in NYC. And Mamdani’s message of affordability certainly resonated with the sizable educated precariat of NYC. Meanwhile, Cuomo’s message only resonated primarily with the few at the top, and perhaps the disenlightened bottom. This is not just a NYC aspect - Virginia and New Jersey governorships also went to the Dems by huge margins; their message? - Affordability.
Yes! Wealth (the monetary, market value of ownership rights) is by its very nature relative. For Robinson Crusoe alone, "wealth" is meaningless. When Friday arrived, "I 'own' it *which means you don't*" became meaningful.
The wealth pie is, if not infinitely, at least steadily growing. So a big Q is who captures what portions of those new pie slices, onto their balance sheets as assets/wealth?
When the economy is stagnating the pie doesn't really increase by much. 80% of US GDP is supposedly wrapped up in this AI tech bubble, without which USD GDP is apparently 0.1%. When the wealth accumulation of those at the top is increasing faster than the pie is growing, they increase their wealth holdings by 30, 40 or 50%, then at a certain point the only way they can continue to increase their share of the pie is to simply take everyone else's pie. It becomes more of a zero-sum game.
Right: the "joint distribution" of income and wealth. Short story, wealth is *way* more concentrated at the top than income. (Much less, than consumption! — top 20% of income recipients only do about 40% of total spending, super consistently over the decades.)
No pain, no gain! Massachusetts collected $2B this year for education and public transit with their 'millionaire tax' - a 4% tax on income over $1M (in 2023 dollars, and inflation-adjusted each year). The wealth pump capacity is so large, this 4% is basically, dare I say, a trickle down?! But one that has enormous benefits for everyone. And a viable, proven tactical path forward, methinks. The politics of it all, though, is certainly challenging.
I wonder if the precariat has become so large that the size of credentialed is almost irrelevant. After all, so much wealth has been slurped up by the uppermost elites that it is impossible for the bottom eighty-five percent to have a guarantee of a stable, good life.
If only one person out of every six people has the same comfortable and predictable life that a majority had three generations ago and with most people expecting it to get worse, I expect that we are reaching the point where the educated part of the precariat is merely the ignition, not the fuel of any unrest. I also think that many Americans got their overpriced degrees, not because they wanted to, but because they didn’t think they had a choice. This shows just how difficult it is for anyone not of the very well connected and wealthy elites to have a decent life.
Politically, what would be the least difficult way to organize a “broad middle class” movement that encompasses people who work for a living — opposed to asset holders, etc?
I don't think America has a middle class anymore. Supposedly if you make 83k you're middle class but that already puts you in the top 20% of all American earners.
I think the real class divide is between the top 10% and the top 1%. Even within the 1%, the top 0.1% have risen wayyy above the rest. These are the only real, long-term winners of neoliberalism, but how do you get all its “losers” — both highly-credentialed and working class — to join forces politically?
You don't. We're all living in separate narrative bubbles. In these discussions we sort of imagine rational human beings able to have common sense discussions and find an amicable compromise able to resolve the problems. Unfortunately this is a fantasy. We inhabit a system where the absence of truthful narratives leaves even the credentialed class (ex. Mamdani), unable to even address the existence of the wealth pump. A case in point are the RE rents. If we were to get into the weeds of this issue we would encounter complicated issues such as regulatory capture, land-use rules, zoning, short-term rentals (Airbnb), etc, and its interconnectedness with financialization, private equity and pension funds owning assets, valuations as collateral, etc, not to mention how immigration stimulates demand boosting asset prices, higher asset prices boosts wealth (boomers), and so on. Mamdani proposes rent control, which rarely works, but most importantly creates winners and losers, a sort of tribal division of entitlements and rents derived from institutional capture.
Unfortunately it's really complicated in reality to implement Turchin's ideas, which in his book were easier when rulers could be tyrants.
Great comment. This is what is not being understood, for structural reasons -- the complexity crisis. The core ability for any sizable group to grasp what is actually going on at any given time is simply not there (or actionable.). I write a lot about this (and Turchin's work as well) on my blog, empathy.guru -- if you're interested.
I tend to think of the top 20% (though we have to be clear: of income recipients, or of wealth holders?). Since they vote so reliably and resist big hits to the propertied/higher-income classes, they serve as the electoral Chinese Wall defending the true kazillionires. (There aren't enough of those voting to swing *any* popular vote.) See eg Richard Reeves' Dream Hoarders. https://en.wikipedia.org/wiki/Dream_Hoarders
Precisely. I think the great political challenge is convincing them (the top 10-20%) they’re better off joining and trying to influence the “rabble”, though they clearly don’t identify themselves as such :-/
Yeah. They perceive an immediate threat to the value of their real-estate and equity holdings, their share of the wealth pie and their share of the wealth-pie *growth*. Takes a lot of explanation to put across the bigger picture. As with jokes, "if you have explain you've already lost..."? Sigh.
Oh to add, the "wealth pump" is an excellent term to do that education. Should be heavily deployed by all left "influencers." Versus: trickle down, which (cover your children's ears!) only works with urine and semen.
Depends what you mean by "middle class" - do you mean small business owners? Do you mean skilled laborers? Do you mean service workers? I don't know what "middle class" even means any more.
But my read on "End Times" is basically that the elites (or the counter elites) will eventually offer something like a "social contract" (like the New Deal) - this will include the set of rules that those who enter it are bound by, on both sides - what kind of marriage is acceptable, what kind of effort is required on the input, to gain the output - who's in and who's out. The right-wing tends to offer the exact same kind of social contract time and time again, almost always involving some sort of "ethnic" or nationalist (or both) recipient of the benefits, for suppressing those filthy "others".
So the direct answer to your question is probably something like - make an offer of a social contract. What will your preferred counter elites have to pay to their previously immiserated army to gain their loyalty? The problem for liberals and the left, is they don't want ANY constraints, so they have a hard time imagining what a social contract might even include.
Well, I don’t believe dichotomies are always useful, but seems like the biggest socioeconomic cleavage is between those that make their money from work, i.e. salaries, even if they’re 6 figures, and those that live off asset appreciation or the like. If you’re gonna create a broad political coalition, having a clear opponent in the so-called class struggle would help
Right! People/households get money (better: assets) for three things: 1. for doing stuff (labor compensation), 2. for just owning stuff (property income), and 3. from gov social transfers.
Over the last ~quarter century, the percentages of total income *including* asset appreciation/accrued holding gains in property income:
So maybe the more specific question would be how do you get together a political coalition that demands wealth taxes outright. I advocate for land-value tax in Panama cause most of the wealth is there, but I suspect it'd be much trickier in the U.S.
Persuassive power - that's what those who sell what I call "the isms" (socialism, capitalism, communism, etc.) are trying to do. They use those frameworks to persuade and manipulate. They use them to structure not just how they think things should work (the isms are best uses a governing philosophies) but also how to perceive how things are. For example, you'd think differently about what a citizen would get from society, in exchange for what they contribute, than you would if you consider what a consumer should get from government, vs. what an innovator should get.
V good Q indeed. What astounds me, given econs' pretty universal acknowledgement of LVTs' "economic efficiency" (~zero elasticity of supply so no "distortion"), they're basically ~never used, never have been, anywhere. Cue: Property-holders' political power?
Wouldn't Elon Musk, Jeff Bezos, and Bill Gates all be workers by your definition? Who are those who live off asset appreciation? Retired sports stars and actors? What's Michael Jordan doing now? Living off his shares. Not much of a class enemy.
The problem is that the owners of the means of production aren't people so much as legal entities in most cases, and those legal entities are owned by (among others) pension funds and other investments of ordinary people.
Far too many people (certainly in academia) are paid (sometimes indirectly) by the state. They live off patronage, not the product of their labour. They're the real class enemy, but they're also the ones likely to lead any protests for change.
I really didn't mean "workers" - though that works. I really meant those with social power of any kind, including but not limited to economic power (elites) and those without (workers).
A hell of a question. I don't think anyone would have any clue really, it would require quite a bit of praxis, as the standard historical systemics would suggest that the future will have sudden drops of chopping away at system complexity, that is societal collapse. Rather that stopping the current trajectory, a relative rise in power of the middle classes would more likely come long term as new civilizational institutions begin to arise from the ashes of the current one.
Personally, as a free market left libertarian, I believe the seeds of this can already be begun by the decentralized mutual aid principle of simply creating new institutions and workers' economic independence and self-sufficiency, e.g., as exemplified by the contemporary the maker and self-reliance movements. This would ameliorate the potential suffering that societal collapse would case.
In Eric Cline's book describing the landscape of completely decayed to resilient to antifragile civilizations after the Bronze Age Collapse, the Phoenicians, who were in the last category, can be said to have done exactly that :)
Have you ever "created a new institution"? I'm a right centrist who used to run a lot of social clubs and meetups but the only group in America that was able to organize something as large as a health insurance company has been Evangelical Christians.
Oh no, I was in blissful ignorance of civilization's decline, working in abstractions in the ivory tower and enjoying a bohemian lifestyle until a few years ago. I stumbled into some utterly deranged dysfunction within my department, including a Horizon project dedicated towards systematic automation of the principles of Marxism-Leninism, and started voraciously reading to figure out WTF is going on, at which point I came upon Peter Turchin's work.
As it is now, I'd be pretty useless as far as joining, let alone creating, a self-reliance mutual aid community to buffer societal collapse. But from my studies thus far, the "maker" and "fablab" frameworks and communities seem to be my best path for parlaying STEM aptitude towards being able to, in the future, survive the future slashing apart of societal complexity. And there are "intentional communities" out there, though mostly so far grungy hippies, but steadily both the number and diversity of milieu of these groups is growing.
Peter Turchin is largely responsible for the equation 'elite overproduction + popular immiseration = populist crises' becoming a widely used trope to explain socio-political crises within national-level societies. I think that's a real advance. What I do wonder however whether the motive force behind this equation is purely economic uncertainty and resentment. I think we need to look at how this equation feeds into other human motivations like status and power, utopianism, envy, moralistic punishment and scapegoating, conformity (mob) impulses and the role of information technology in amplifying such mechanisms. I think this is very relevant to the Mamdani-Carlson-Fuentes axis.
I recall that in Endtimes you mentioned one of the favorable outcomes to the periodic crises was the emergence of an elite that found ways to reverse the wealth pump, thereby lifting up the working class who were otherwise available to be enticed into violent revolution. Why wouldn't Mamdani fit that description?
Good question. Possible, in principle, and we will find out how it goes in practice. But my guess is that he will not be successful. This is partly based on the experience of past revolutions, where it took multiple attempts to find the right mixture of reforms to shut down the wealth pump. Also, the problem is nation-wide and needs to be solved at the national level. Mamdani is not qualified to run for president, due to his birthplace.
Recently I've been reading Chris Buckley's "America and the Art of the Possible". He seems to be a fan of yours and makes approving mention of your work in the book. He's certainly connected where it counts. I haven't got to the part of his book that's focused on solutions, though. Have you opinions on his thoughts?
Do you see Thiel as a counter-elite type figure? A Lafayette-like aristocrat who supports the left and wants to reverse the wealth pump? (to an extent)
Agree that the odds are against him, but he has a magnetic presence and if he has some staying power, perhaps he could set a good example. (Trying to stay hopeful!)
The wealth pump is inherent to the system Mamdami inhabits. Switching off the wealth pump necessitates higher order actions, on the level of some kind of return to the gold standard, redressing the problems of elites avoiding taxation through legislation enabling avoidance. It's very complicated. In the past, in the examples Turchin provides, Kings for instance, are able to undertake radical reforms within territories they're sovereigns off. In today's world, the entire West is divided in many countries, most of which (ex. The EU) with limited sovereignty and all of which are enmeshed in a complicated system ruled by treaties and held in check by sovereign debt severely limiting their ability to create reforms, which would hurt those who purchase that debt. It's very complicated and a municipal city mayor just isn't the right context for the level of action required to reform the system.
While it's outside the scope of your work, in terms of the credentialed precatriat and disaffected elites more generally, at what point do we need to have a discussion about the contradictions and unsustainability in the West with pseudo capitalism, money and wealth creation (financialization), the constant focus on "growth" as barometer of health (GDP, income, wealth) and all the metrics on inequality?
Much of Carney's article, and your analysis, rightly (in my opinion) focuses on disaffected stratas of society. I agree with the overproduction of elites being a problem, but it is problem because by definition the elite is a tiny fraction of the whole. At the same time, perhaps a more nuanced accounting of the issues needs to address the inconsistencies of the narratives which gave rise to the overproduction of the credentialed class and overselling of the idea that belonging to an elite was both accessible and leads to a better quality of life. Unfortunately from here we must ask some hard questions about the system we inhabit, which is capitalism in name but oligarchic and financialized in practice. We must also account for regulatory interference in running society and the economy, across the West.
If we continue with observing reality, we must also account for the fetishization of money in our analysis, hence we encounter inflation and the how-to in its creation (private banks), taxation and regulations favoring existing elites.
Insomma. Prof. Turchin, i love your work, but find there's a lack of going into the weeds and dealing with the reality of issues.
I just can't help but feel there's a lot more to this problem than your policy prescription concerning switching off the wealth pump to save society.
NYC is not America, so doesn't generalize to America. It's 69% non-White, and 19% non-Jewish White. Of the latter, few have any American ancestry before the Civil War.
Yes, it seems to me that beside the credential and financial dimensions there is also an ethnical dimension to these electoral results. But I guess it doesn't mean that this phenomenon couldn't happen in other American cities.
Or elsewhere, for that matter. Many large French cities now have a sociological and demographic makeup that would allow the local equivalent of Mamdani to win elections.
«But according to the NYC government survey in 2023, two years ago the proportion of New Yorkers with a bachelor’s degree or higher was 43%, increasing from 33% in 2010. Of the White adults (25 or older) two-thirds completed college. Talk about degree overproduction…»
There is a big offshoring angle in this:
* The propaganda about offshoring all the relatively well-paid union jobs to low-wage no-unions and/or no-strikes countries was that in "phase 1" only the nasty factories and the bad jobs would be sent over to those backwards countries.
* In "phase 2" the corporate headquarters would remain in the USA and thanks to profits extracted from those low-wage countries they would expand and the next generation would be gifted good headquarters middle-class jobs as marketing strategists, corporate counsels, chief scientists, finance traders, project managers, ... and nobody would have to do humble low-paid jobs like cleaner, delivery driver, gardener, etc. because immigrants from the same low-wage countries would do them.
* It turned out that the japanese, chinese, etc. were not actually backwards but simply poor and could setup their own corporations and keep the good headquarters jobs in their countries so it was not just the docks and the textile and electronics factories etc. that were offshored but the whole industries including headquarters.
* It also turned out that competing with desperate immigrants for humble low-paid jobs is hard as there is a giant oversupply of labor.
What some commenters call "the promise of headquarterization" failed but many if not most older voters kept voting for more offshoring and more immigration because they became rich thanks to buying cheap housing (and stocks) that were then pumped up relentlessly by Greenspan, Rubin and their successors, so that they were and are the beneficiaries that “The median rent for two-bedroom apartments in New York City increased 15.8% over the past year and is now $5,500 per month”.
«US was dominated by two parties: one of the “1 percent” (wealth holders) and one of the “10 percent” (credential-holders). Both parties focused on advancing the interests of the ruling class, while ignoring those of the 90 percent.»
I have another similar view that I think is more relevant to politics:
* Both parties represent the interests of the top 20-40% that is affluent middle-class property owners ("petty bourgeoisie") which often are also significant stocks (401k) owners, not merely the 10% of PMC
* Both parties were largely controlled however by different factions of the upper (0.1%) class in particular the Ds were and are controlled by the globalist expansionist tech and finance oligarchs, which were also present and often in control in the Rs.
* Populism is the alliance of a faction of the upper class with the working class against another faction of the upper class. In the present of the nationalist and consolidationist faction of the upper class.
* The credentialed precariat are those who feel entitled to belong to the affluent property-owning middle class but have become working class.
* The main political conflict is that between incumbent members of the affluent property-owning middle class and the aspiring members of that class, because the incumbents keep voting for higher property prices and for lower wages ("liberal democracy") which of course makes it much harder for aspiring members of the "petty bourgeoisie" to become members.
That is why for me the key fact in this post is “The median rent for two-bedroom apartments in New York City increased 15.8% over the past year and is now $5,500 per month”: on one side there are the credentialed precariat renters (or buyers) who pay that much, but on the other there are incumbent owners who make a lot of money from those credentialed precariat renters (or buyers) and are very grateful to the "liberal democratic" system (a.k.a. "reaganism") for their big profits.
Very interesting connection to the "overproduced elite aspirants". This can only end bad. There aren't just too many educated people, there are too many uneducated people as well. A poisonous mix for violent revolution. The real new elite will be the one willing to slam down the revolutionaries and their fighting mobs, to restore order.
No matter how this unfolds—whether through sporadic unrest or something approaching civil war—any real path forward has to produce laws that redistribute wealth and break the trap that’s creating a growing class of credentialed precariats. This can’t be done all at once, but it can begin with practical limits. The wealth pump won’t completely disappear, but it can be governed—kept from spinning out of balance through either overproduction or collapse. And importantly, the models for how to do this already exist. The problem isn’t the lack of solutions; it’s the lack of political will to apply them.
i feel like you started making a point here and then forgot to say anything interesting.
yes, mamdani is a candidate of the highly educated upper muddle class young liberal college graduate with no obvious career path and left wing economic views, so what?
Yep, Mamdami's politics of resentment is clear in:
1) The popular slogan "there should be no billionaires", rather than "there should be no poverty" - as Musa Al-Gharbi points out the working class doesn't care if there are billionaires and are interested in predistribution, that is high wages from high value added employment (and if it makes the business owner rich, so be it), rather than redistribution, which is preferred by the PMC because they get a nice cut from administrating it.
2) As a mathematician I highly resent his wish to get rid of gifted school programs. What an asinine way to make young nerds be bored and resent school, and given the power law of scientific discovery and technological innovation, waste talent and cut economic growth, all out of an immature politics of jealous resentment.
And unfortunately, the rest of the population will suffer the brunt of the fallback as the two warring factions use them as hostages in their power struggle.
Case in point 1: the current SNAP discourse on both sides
“the working class doesn't care if there are billionaires and are interested in predistribution, that is high wages from high value added employment (and if it makes the business owner rich, so be it), rather than redistribution, which is preferred by the PMC because they get a nice cut from administrating it.”
Heya, was talking to a v smart and savvy friend/colleague who was objecting to "elite overproduction" because he thought it at least implies that we should produce less credentialed, well-educated ppl. (Vs. producing the same or *more,* and distributing wealth and power downward much more more vigorously — both economically and through democratic politics — to the non-credentialed).
I pushed back, saying I don't think you propose less higher/professional ed. What say you?
This is why I make such a point distinguishing "education" and "credentials" (that education provides). In my view, education is an undiluted good -- I'd like to live in a society where all can think independently and have basic understanding of how the world works.
Credentials is another matter. We need credentials so that employers have some basis on which to select workers. And some surplus of credentialed aspirants over the number of jobs for them is good because it creates healthy competition. But too much competition is corrosive, as I explain in detail in End Times. I cannot give you a precise threshold between "productive" and "destructive" levels of competition. But when instead of 50%-100% surplus of aspirants for jobs you have 1000% surplus, things will break down.
When journalists use words like "overeducated youth" I cringe a bit, but on the other hand it's shorter than "oversupply of credentialed elite aspirants."
I much prefer "credentialed precariat" here because "overproduction" and "oversupply" (unhelpful, economics-y terms) both at least imply a prescriptive solution of providing less higher (and liberal) education. Ppl *will* spin it that way. For prescriptive policy, the precarity's the thing. Have I mentioned highly concentrated wealth? <g>
Elite overproduction, indicated as a precursor for past crises, is certainly an issue. That means there is upward mobility of a number of people from the upper 10% into the elites. However, I would posit that it is not only the quantity of the elites, but also the quality - in the US, the level of wealth ‘pumped’ into the elites is staggering. (Elon’s the trillion dollar man now?!) The economy isn’t infinitely expansive in wealth creation - the wealth pumped to the elites comes at the cost of everybody else in some form. So, the “quality” of the elite wealth dictates the inverse quality of the precariat. To the point where the precariat finds the housing and bus fares to be a substantial burden in NYC. And Mamdani’s message of affordability certainly resonated with the sizable educated precariat of NYC. Meanwhile, Cuomo’s message only resonated primarily with the few at the top, and perhaps the disenlightened bottom. This is not just a NYC aspect - Virginia and New Jersey governorships also went to the Dems by huge margins; their message? - Affordability.
Yes! Wealth (the monetary, market value of ownership rights) is by its very nature relative. For Robinson Crusoe alone, "wealth" is meaningless. When Friday arrived, "I 'own' it *which means you don't*" became meaningful.
The wealth pie is, if not infinitely, at least steadily growing. So a big Q is who captures what portions of those new pie slices, onto their balance sheets as assets/wealth?
When the economy is stagnating the pie doesn't really increase by much. 80% of US GDP is supposedly wrapped up in this AI tech bubble, without which USD GDP is apparently 0.1%. When the wealth accumulation of those at the top is increasing faster than the pie is growing, they increase their wealth holdings by 30, 40 or 50%, then at a certain point the only way they can continue to increase their share of the pie is to simply take everyone else's pie. It becomes more of a zero-sum game.
https://fred.stlouisfed.org/graph/?g=1NQqE
It would be very interesting to overlay the urban consumer income on top of this dataset, no?
Right: the "joint distribution" of income and wealth. Short story, wealth is *way* more concentrated at the top than income. (Much less, than consumption! — top 20% of income recipients only do about 40% of total spending, super consistently over the decades.)
Here's a glimpse of Turchin's Wealth Pump in action. Compare the trends in consumer price index, and it isn't hard to see why this isn't sustainable.
https://inequality.org/facts/income-inequality/#income-inequality
Yes, but it’s unfortunate that the Democrats promising “affordability” have no viable way of delivering it.
No pain, no gain! Massachusetts collected $2B this year for education and public transit with their 'millionaire tax' - a 4% tax on income over $1M (in 2023 dollars, and inflation-adjusted each year). The wealth pump capacity is so large, this 4% is basically, dare I say, a trickle down?! But one that has enormous benefits for everyone. And a viable, proven tactical path forward, methinks. The politics of it all, though, is certainly challenging.
https://finance.yahoo.com/news/massachusetts-collected-2-billion-more-153147561.html
It certainly is of enormous benefit to overpaid public employees and their unions.
Universal income, or in my preferred term, a Common Wealth Dividend.
I wonder if the precariat has become so large that the size of credentialed is almost irrelevant. After all, so much wealth has been slurped up by the uppermost elites that it is impossible for the bottom eighty-five percent to have a guarantee of a stable, good life.
If only one person out of every six people has the same comfortable and predictable life that a majority had three generations ago and with most people expecting it to get worse, I expect that we are reaching the point where the educated part of the precariat is merely the ignition, not the fuel of any unrest. I also think that many Americans got their overpriced degrees, not because they wanted to, but because they didn’t think they had a choice. This shows just how difficult it is for anyone not of the very well connected and wealthy elites to have a decent life.
Politically, what would be the least difficult way to organize a “broad middle class” movement that encompasses people who work for a living — opposed to asset holders, etc?
I don't think America has a middle class anymore. Supposedly if you make 83k you're middle class but that already puts you in the top 20% of all American earners.
I think the real class divide is between the top 10% and the top 1%. Even within the 1%, the top 0.1% have risen wayyy above the rest. These are the only real, long-term winners of neoliberalism, but how do you get all its “losers” — both highly-credentialed and working class — to join forces politically?
You don't. We're all living in separate narrative bubbles. In these discussions we sort of imagine rational human beings able to have common sense discussions and find an amicable compromise able to resolve the problems. Unfortunately this is a fantasy. We inhabit a system where the absence of truthful narratives leaves even the credentialed class (ex. Mamdani), unable to even address the existence of the wealth pump. A case in point are the RE rents. If we were to get into the weeds of this issue we would encounter complicated issues such as regulatory capture, land-use rules, zoning, short-term rentals (Airbnb), etc, and its interconnectedness with financialization, private equity and pension funds owning assets, valuations as collateral, etc, not to mention how immigration stimulates demand boosting asset prices, higher asset prices boosts wealth (boomers), and so on. Mamdani proposes rent control, which rarely works, but most importantly creates winners and losers, a sort of tribal division of entitlements and rents derived from institutional capture.
Unfortunately it's really complicated in reality to implement Turchin's ideas, which in his book were easier when rulers could be tyrants.
Great comment. This is what is not being understood, for structural reasons -- the complexity crisis. The core ability for any sizable group to grasp what is actually going on at any given time is simply not there (or actionable.). I write a lot about this (and Turchin's work as well) on my blog, empathy.guru -- if you're interested.
Hope springs eternal, my friend, but I hear ya!
100% with you!
I tend to think of the top 20% (though we have to be clear: of income recipients, or of wealth holders?). Since they vote so reliably and resist big hits to the propertied/higher-income classes, they serve as the electoral Chinese Wall defending the true kazillionires. (There aren't enough of those voting to swing *any* popular vote.) See eg Richard Reeves' Dream Hoarders. https://en.wikipedia.org/wiki/Dream_Hoarders
Precisely. I think the great political challenge is convincing them (the top 10-20%) they’re better off joining and trying to influence the “rabble”, though they clearly don’t identify themselves as such :-/
Yeah. They perceive an immediate threat to the value of their real-estate and equity holdings, their share of the wealth pie and their share of the wealth-pie *growth*. Takes a lot of explanation to put across the bigger picture. As with jokes, "if you have explain you've already lost..."? Sigh.
Oh to add, the "wealth pump" is an excellent term to do that education. Should be heavily deployed by all left "influencers." Versus: trickle down, which (cover your children's ears!) only works with urine and semen.
Depends what you mean by "middle class" - do you mean small business owners? Do you mean skilled laborers? Do you mean service workers? I don't know what "middle class" even means any more.
But my read on "End Times" is basically that the elites (or the counter elites) will eventually offer something like a "social contract" (like the New Deal) - this will include the set of rules that those who enter it are bound by, on both sides - what kind of marriage is acceptable, what kind of effort is required on the input, to gain the output - who's in and who's out. The right-wing tends to offer the exact same kind of social contract time and time again, almost always involving some sort of "ethnic" or nationalist (or both) recipient of the benefits, for suppressing those filthy "others".
So the direct answer to your question is probably something like - make an offer of a social contract. What will your preferred counter elites have to pay to their previously immiserated army to gain their loyalty? The problem for liberals and the left, is they don't want ANY constraints, so they have a hard time imagining what a social contract might even include.
Well, I don’t believe dichotomies are always useful, but seems like the biggest socioeconomic cleavage is between those that make their money from work, i.e. salaries, even if they’re 6 figures, and those that live off asset appreciation or the like. If you’re gonna create a broad political coalition, having a clear opponent in the so-called class struggle would help
Right! People/households get money (better: assets) for three things: 1. for doing stuff (labor compensation), 2. for just owning stuff (property income), and 3. from gov social transfers.
Over the last ~quarter century, the percentages of total income *including* asset appreciation/accrued holding gains in property income:
Labor: 51%
Property: 41%
Transfers: 8%
So maybe the more specific question would be how do you get together a political coalition that demands wealth taxes outright. I advocate for land-value tax in Panama cause most of the wealth is there, but I suspect it'd be much trickier in the U.S.
Persuassive power - that's what those who sell what I call "the isms" (socialism, capitalism, communism, etc.) are trying to do. They use those frameworks to persuade and manipulate. They use them to structure not just how they think things should work (the isms are best uses a governing philosophies) but also how to perceive how things are. For example, you'd think differently about what a citizen would get from society, in exchange for what they contribute, than you would if you consider what a consumer should get from government, vs. what an innovator should get.
In short, it's persuasion.
V good Q indeed. What astounds me, given econs' pretty universal acknowledgement of LVTs' "economic efficiency" (~zero elasticity of supply so no "distortion"), they're basically ~never used, never have been, anywhere. Cue: Property-holders' political power?
I think it starts with those 10-20%. A group within them must convince enough to “defect” from the status quo.
At least that’s what I tell myself to keep writing! Hahaha
Wouldn't Elon Musk, Jeff Bezos, and Bill Gates all be workers by your definition? Who are those who live off asset appreciation? Retired sports stars and actors? What's Michael Jordan doing now? Living off his shares. Not much of a class enemy.
The problem is that the owners of the means of production aren't people so much as legal entities in most cases, and those legal entities are owned by (among others) pension funds and other investments of ordinary people.
Far too many people (certainly in academia) are paid (sometimes indirectly) by the state. They live off patronage, not the product of their labour. They're the real class enemy, but they're also the ones likely to lead any protests for change.
> Wouldn't Elon Musk, Jeff Bezos, and Bill Gates all be workers by your definition?
No. They are mostly rich because of assets, not salaries. Jeff drew a salary of $80k.
> Who are those who live off asset appreciation
People with assets to appreciate. Also it’s not just asset appreciation but dividends and other unearned income.
I really didn't mean "workers" - though that works. I really meant those with social power of any kind, including but not limited to economic power (elites) and those without (workers).
For ~20 years, Bezos declared $88K in annual earned income on his tax returns. Should we take him at his word?
Solid analysis. I'm thinking Heinlein / Starship Troopers!
A hell of a question. I don't think anyone would have any clue really, it would require quite a bit of praxis, as the standard historical systemics would suggest that the future will have sudden drops of chopping away at system complexity, that is societal collapse. Rather that stopping the current trajectory, a relative rise in power of the middle classes would more likely come long term as new civilizational institutions begin to arise from the ashes of the current one.
Personally, as a free market left libertarian, I believe the seeds of this can already be begun by the decentralized mutual aid principle of simply creating new institutions and workers' economic independence and self-sufficiency, e.g., as exemplified by the contemporary the maker and self-reliance movements. This would ameliorate the potential suffering that societal collapse would case.
"simply creating new institutions" lol. Seasteading FTW!
In Eric Cline's book describing the landscape of completely decayed to resilient to antifragile civilizations after the Bronze Age Collapse, the Phoenicians, who were in the last category, can be said to have done exactly that :)
Here’s hoping we don’t encounter Sea Peoples!
Have you ever "created a new institution"? I'm a right centrist who used to run a lot of social clubs and meetups but the only group in America that was able to organize something as large as a health insurance company has been Evangelical Christians.
Oh no, I was in blissful ignorance of civilization's decline, working in abstractions in the ivory tower and enjoying a bohemian lifestyle until a few years ago. I stumbled into some utterly deranged dysfunction within my department, including a Horizon project dedicated towards systematic automation of the principles of Marxism-Leninism, and started voraciously reading to figure out WTF is going on, at which point I came upon Peter Turchin's work.
As it is now, I'd be pretty useless as far as joining, let alone creating, a self-reliance mutual aid community to buffer societal collapse. But from my studies thus far, the "maker" and "fablab" frameworks and communities seem to be my best path for parlaying STEM aptitude towards being able to, in the future, survive the future slashing apart of societal complexity. And there are "intentional communities" out there, though mostly so far grungy hippies, but steadily both the number and diversity of milieu of these groups is growing.
Peter Turchin is largely responsible for the equation 'elite overproduction + popular immiseration = populist crises' becoming a widely used trope to explain socio-political crises within national-level societies. I think that's a real advance. What I do wonder however whether the motive force behind this equation is purely economic uncertainty and resentment. I think we need to look at how this equation feeds into other human motivations like status and power, utopianism, envy, moralistic punishment and scapegoating, conformity (mob) impulses and the role of information technology in amplifying such mechanisms. I think this is very relevant to the Mamdani-Carlson-Fuentes axis.
Yes, any model oversimplifies the reality, so in End Times I tried to convey the additional dimensions and complexity.
I recall that in Endtimes you mentioned one of the favorable outcomes to the periodic crises was the emergence of an elite that found ways to reverse the wealth pump, thereby lifting up the working class who were otherwise available to be enticed into violent revolution. Why wouldn't Mamdani fit that description?
Good question. Possible, in principle, and we will find out how it goes in practice. But my guess is that he will not be successful. This is partly based on the experience of past revolutions, where it took multiple attempts to find the right mixture of reforms to shut down the wealth pump. Also, the problem is nation-wide and needs to be solved at the national level. Mamdani is not qualified to run for president, due to his birthplace.
Recently I've been reading Chris Buckley's "America and the Art of the Possible". He seems to be a fan of yours and makes approving mention of your work in the book. He's certainly connected where it counts. I haven't got to the part of his book that's focused on solutions, though. Have you opinions on his thoughts?
Do you see Thiel as a counter-elite type figure? A Lafayette-like aristocrat who supports the left and wants to reverse the wealth pump? (to an extent)
Agree that the odds are against him, but he has a magnetic presence and if he has some staying power, perhaps he could set a good example. (Trying to stay hopeful!)
The wealth pump is inherent to the system Mamdami inhabits. Switching off the wealth pump necessitates higher order actions, on the level of some kind of return to the gold standard, redressing the problems of elites avoiding taxation through legislation enabling avoidance. It's very complicated. In the past, in the examples Turchin provides, Kings for instance, are able to undertake radical reforms within territories they're sovereigns off. In today's world, the entire West is divided in many countries, most of which (ex. The EU) with limited sovereignty and all of which are enmeshed in a complicated system ruled by treaties and held in check by sovereign debt severely limiting their ability to create reforms, which would hurt those who purchase that debt. It's very complicated and a municipal city mayor just isn't the right context for the level of action required to reform the system.
While it's outside the scope of your work, in terms of the credentialed precatriat and disaffected elites more generally, at what point do we need to have a discussion about the contradictions and unsustainability in the West with pseudo capitalism, money and wealth creation (financialization), the constant focus on "growth" as barometer of health (GDP, income, wealth) and all the metrics on inequality?
Much of Carney's article, and your analysis, rightly (in my opinion) focuses on disaffected stratas of society. I agree with the overproduction of elites being a problem, but it is problem because by definition the elite is a tiny fraction of the whole. At the same time, perhaps a more nuanced accounting of the issues needs to address the inconsistencies of the narratives which gave rise to the overproduction of the credentialed class and overselling of the idea that belonging to an elite was both accessible and leads to a better quality of life. Unfortunately from here we must ask some hard questions about the system we inhabit, which is capitalism in name but oligarchic and financialized in practice. We must also account for regulatory interference in running society and the economy, across the West.
If we continue with observing reality, we must also account for the fetishization of money in our analysis, hence we encounter inflation and the how-to in its creation (private banks), taxation and regulations favoring existing elites.
Insomma. Prof. Turchin, i love your work, but find there's a lack of going into the weeds and dealing with the reality of issues.
I just can't help but feel there's a lot more to this problem than your policy prescription concerning switching off the wealth pump to save society.
Best,
NYC is not America, so doesn't generalize to America. It's 69% non-White, and 19% non-Jewish White. Of the latter, few have any American ancestry before the Civil War.
Yes, it seems to me that beside the credential and financial dimensions there is also an ethnical dimension to these electoral results. But I guess it doesn't mean that this phenomenon couldn't happen in other American cities.
Or elsewhere, for that matter. Many large French cities now have a sociological and demographic makeup that would allow the local equivalent of Mamdani to win elections.
«But according to the NYC government survey in 2023, two years ago the proportion of New Yorkers with a bachelor’s degree or higher was 43%, increasing from 33% in 2010. Of the White adults (25 or older) two-thirds completed college. Talk about degree overproduction…»
There is a big offshoring angle in this:
* The propaganda about offshoring all the relatively well-paid union jobs to low-wage no-unions and/or no-strikes countries was that in "phase 1" only the nasty factories and the bad jobs would be sent over to those backwards countries.
* In "phase 2" the corporate headquarters would remain in the USA and thanks to profits extracted from those low-wage countries they would expand and the next generation would be gifted good headquarters middle-class jobs as marketing strategists, corporate counsels, chief scientists, finance traders, project managers, ... and nobody would have to do humble low-paid jobs like cleaner, delivery driver, gardener, etc. because immigrants from the same low-wage countries would do them.
* It turned out that the japanese, chinese, etc. were not actually backwards but simply poor and could setup their own corporations and keep the good headquarters jobs in their countries so it was not just the docks and the textile and electronics factories etc. that were offshored but the whole industries including headquarters.
* It also turned out that competing with desperate immigrants for humble low-paid jobs is hard as there is a giant oversupply of labor.
What some commenters call "the promise of headquarterization" failed but many if not most older voters kept voting for more offshoring and more immigration because they became rich thanks to buying cheap housing (and stocks) that were then pumped up relentlessly by Greenspan, Rubin and their successors, so that they were and are the beneficiaries that “The median rent for two-bedroom apartments in New York City increased 15.8% over the past year and is now $5,500 per month”.
«US was dominated by two parties: one of the “1 percent” (wealth holders) and one of the “10 percent” (credential-holders). Both parties focused on advancing the interests of the ruling class, while ignoring those of the 90 percent.»
I have another similar view that I think is more relevant to politics:
* Both parties represent the interests of the top 20-40% that is affluent middle-class property owners ("petty bourgeoisie") which often are also significant stocks (401k) owners, not merely the 10% of PMC
* Both parties were largely controlled however by different factions of the upper (0.1%) class in particular the Ds were and are controlled by the globalist expansionist tech and finance oligarchs, which were also present and often in control in the Rs.
* Populism is the alliance of a faction of the upper class with the working class against another faction of the upper class. In the present of the nationalist and consolidationist faction of the upper class.
* The credentialed precariat are those who feel entitled to belong to the affluent property-owning middle class but have become working class.
* The main political conflict is that between incumbent members of the affluent property-owning middle class and the aspiring members of that class, because the incumbents keep voting for higher property prices and for lower wages ("liberal democracy") which of course makes it much harder for aspiring members of the "petty bourgeoisie" to become members.
That is why for me the key fact in this post is “The median rent for two-bedroom apartments in New York City increased 15.8% over the past year and is now $5,500 per month”: on one side there are the credentialed precariat renters (or buyers) who pay that much, but on the other there are incumbent owners who make a lot of money from those credentialed precariat renters (or buyers) and are very grateful to the "liberal democratic" system (a.k.a. "reaganism") for their big profits.
Very interesting connection to the "overproduced elite aspirants". This can only end bad. There aren't just too many educated people, there are too many uneducated people as well. A poisonous mix for violent revolution. The real new elite will be the one willing to slam down the revolutionaries and their fighting mobs, to restore order.
No matter how this unfolds—whether through sporadic unrest or something approaching civil war—any real path forward has to produce laws that redistribute wealth and break the trap that’s creating a growing class of credentialed precariats. This can’t be done all at once, but it can begin with practical limits. The wealth pump won’t completely disappear, but it can be governed—kept from spinning out of balance through either overproduction or collapse. And importantly, the models for how to do this already exist. The problem isn’t the lack of solutions; it’s the lack of political will to apply them.
i feel like you started making a point here and then forgot to say anything interesting.
yes, mamdani is a candidate of the highly educated upper muddle class young liberal college graduate with no obvious career path and left wing economic views, so what?
It sounds like a negative development when the expert class calls for greater affordability.
Thank you for correctly expressing the difference as “60 points” and not “60%.” I fight this battle almost daily. Maddening.
Yep, Mamdami's politics of resentment is clear in:
1) The popular slogan "there should be no billionaires", rather than "there should be no poverty" - as Musa Al-Gharbi points out the working class doesn't care if there are billionaires and are interested in predistribution, that is high wages from high value added employment (and if it makes the business owner rich, so be it), rather than redistribution, which is preferred by the PMC because they get a nice cut from administrating it.
2) As a mathematician I highly resent his wish to get rid of gifted school programs. What an asinine way to make young nerds be bored and resent school, and given the power law of scientific discovery and technological innovation, waste talent and cut economic growth, all out of an immature politics of jealous resentment.
And unfortunately, the rest of the population will suffer the brunt of the fallback as the two warring factions use them as hostages in their power struggle.
Case in point 1: the current SNAP discourse on both sides
Case in point 2: https://www.thecrimson.com/article/2025/11/7/harvard-proposes-custodians-wage-freeze/
As if an institution which an endowment greater than more than half of the world's nations' GDPs can't afford to pay janitors...
“the working class doesn't care if there are billionaires and are interested in predistribution, that is high wages from high value added employment (and if it makes the business owner rich, so be it), rather than redistribution, which is preferred by the PMC because they get a nice cut from administrating it.”
—> Nailed it!
Heya, was talking to a v smart and savvy friend/colleague who was objecting to "elite overproduction" because he thought it at least implies that we should produce less credentialed, well-educated ppl. (Vs. producing the same or *more,* and distributing wealth and power downward much more more vigorously — both economically and through democratic politics — to the non-credentialed).
I pushed back, saying I don't think you propose less higher/professional ed. What say you?
This is why I make such a point distinguishing "education" and "credentials" (that education provides). In my view, education is an undiluted good -- I'd like to live in a society where all can think independently and have basic understanding of how the world works.
Credentials is another matter. We need credentials so that employers have some basis on which to select workers. And some surplus of credentialed aspirants over the number of jobs for them is good because it creates healthy competition. But too much competition is corrosive, as I explain in detail in End Times. I cannot give you a precise threshold between "productive" and "destructive" levels of competition. But when instead of 50%-100% surplus of aspirants for jobs you have 1000% surplus, things will break down.
When journalists use words like "overeducated youth" I cringe a bit, but on the other hand it's shorter than "oversupply of credentialed elite aspirants."
I much prefer "credentialed precariat" here because "overproduction" and "oversupply" (unhelpful, economics-y terms) both at least imply a prescriptive solution of providing less higher (and liberal) education. Ppl *will* spin it that way. For prescriptive policy, the precarity's the thing. Have I mentioned highly concentrated wealth? <g>