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Sure, but if people were moving up on aggregate, we would see the middle class growing as children of the poor made their way up. Instead, we see the middle cla

Sure, but if people were moving up on aggregate, we would see the middle class growing as children of the poor made their way up. Instead, we see the middle class shrinking, the poor growing, and the wealth collecting to a smaller proportion of the population as families are being pushed down due to the recession.

nostrademons 11y ago
Be careful with the word "aggregate", it obscures a lot of the complexity of what's going on. In aggregate, for example, the average person will remain...average. That's not a useful conclusion when looking at absolute wealth (which nobody really cares about anyway - the working poor today have more information available to them than a corporate CEO did 20 years ago, yet it doesn't do much good for them), nor is it all that useful when predicting how to raise your social status (which a good number of people do care about). What's really happening is that the class structure of society is being replaced entirely, similar to what happened during the industrial revolution. During the Renaissance, the class system consisted of landed aristocrats => merchants => guilds => working poor. The Industrial Revolution raised the productivity of certain industries so much that the owners of these machines displaced the previously wealthy class, leading to a class system of industrialist/financiers => unionized workers => non-union & service workers. What's happening now is that "software is eating the world", and displacing the existing networks of production throughout the economy. That's leading to a class system of "those who own the data" (entrepreneurs & executives of large tech companies) => "those who work with the data" (software engineers, and likely hardware engineers & material scientists in the near future) => "everybody else". This transition has just begun, in the grand scheme of things; I'd estimate that we're at the equivalent of around 1900 on the Industrial Revolution timetable. The big losers likely won't be the middle class, who are probably the best positioned (in aggregate - see, it obscures a lot of relevant details) to move into the engineering class. The losers are likely to be the formerly wealthy, the descendants of the former owners & executives of old-line corporations. The landed aristocracy didn't make a great showing during the Industrial Revolution, and it's unlikely that the country-club set will make a great showing during the Information Revolution. Pick where you want to be in the new world order, and work hard to get there. One thing capitalism definitely does reward is action. The old economic order has just been blown up, but few people realize it yet; that makes it the best time to build the new one.
- creamyhorror 11y ago
  I like the thrust of your argument, but from my perspective in Singapore/Asia, that's not quite what I see. Big corporates are aggressively moving to dominate technology niches, while still dominating their existing verticals. * All the banks have strong deal/shopping apps * Property developers are continuing to build ever larger malls while investing in Amazon-like marketplaces (see Matahari Mall) * Every big corporate is investing in external startups or growing internal startups and innovation divisions * Practically all the big startup successes in Singapore, Indonesia and China are owned, often quite directly, by well-connected families or the state Everyone's aggressively responding to the tech upstarts and trying to control their own turf. The US-educated scions of well-connected families are especially responsible for techologising their behemoth family businesses and launching modern apps. New local players will have difficulty competing with old money's new generation of leaders. In other words, what I see here in Asia is the entrenchment of old money. The market is saturated with new entrants, but the leaders are those who are backed by old money, simply because of the firepower that those connections give them. I think this is fundamentally different from the situation in the Valley, where more disinterested VCs (rather than old money) back the new horses. My assessment is from the gut rather than statistical, so I'd love to be given an alternative view.
  - srunni 11y ago
    > I like the thrust of your argument, but from my perspective in Singapore/Asia, that's not quite what I see...The US-educated scions of well-connected families are especially responsible for techologising their behemoth family businesses and launching modern apps. This is exactly correct. The GP's post reminded me of The Coming Transformation, a report by VC firm Formation 8: http://formation8.com/resources/the-coming-transformation/ http://formation8.com/resources/the-coming-transformation/ The report draws a similar comparison between the decline of the landed aristocracy during the Second Industrial Revolution and the coming decline of the industrial aristocracy due to "software eating the world." However, Formation 8 is taking advantage of this opportunity: one of their partners is the scion of a Korean conglomerate, and he's no doubt leveraging his family ties to obtain buy-in from many other HNW families from all over Asia: http://www.bloombergview.com/articles/2015-03-05/why-formation-8-loves-the-startup-game-in-asia-and-silicon-valley http://www.bloombergview.com/articles/2015-03-05/why-formati... http://www.bloomberg.com/news/articles/2015-06-25/sun-yat-sen-s-grandson-said-to-join-lg-scion-in-new-asia-vc-fund http://www.bloomberg.com/news/articles/2015-06-25/sun-yat-se...
fennecfoxen 11y ago
> Sure, but if people were moving up on aggregate, we would see the middle class growing as children of the poor made their way up. Eh, what you really want to look at is a series of cohorts moving on up as people grow older: a lot of US population growth is from immigration (legal and otherwise) who tend to have less income (which is why they immigrate), and from children born to recent immigrants (who have substantially more children than rich people in this country).
- roymurdock 11y ago
  Ok, do you have the statistics at hand? What do they tell us?
  - toomuchtodo 11y ago
    Look at employment figures by age group and labor participation rate. You'll find that older people are working longer because they can't afford to retire. Also, Google "calculated risk blog" and read the last 2 months or so of posts. Pay careful attention to the posts about reduced GDP due to demographics, as well as new household formations lagging due to structural economic issues. TLDR Ain't nobody moving up in any cohorts. 70% of people make less than they did 12 years ago.
zo1 11y ago
That sounds like it would only apply if the relative population growth of each group was similar. The statistics say it's not, even with child-mortality rates, the poor outnumber the rich and that gap is increasing in number.

nostrademons 11y ago

Be careful with the word "aggregate", it obscures a lot of the complexity of what's going on. In aggregate, for example, the average person will remain...average. That's not a useful conclusion when looking at absolute wealth (which nobody really cares about anyway - the working poor today have more information available to them than a corporate CEO did 20 years ago, yet it doesn't do much good for them), nor is it all that useful when predicting how to raise your social status (which a good number of people do care about). What's really happening is that the class structure of society is being replaced entirely, similar to what happened during the industrial revolution. During the Renaissance, the class system consisted of landed aristocrats => merchants => guilds => working poor. The Industrial Revolution raised the productivity of certain industries so much that the owners of these machines displaced the previously wealthy class, leading to a class system of industrialist/financiers => unionized workers => non-union & service workers. What's happening now is that "software is eating the world", and displacing the existing networks of production throughout the economy. That's leading to a class system of "those who own the data" (entrepreneurs & executives of large tech companies) => "those who work with the data" (software engineers, and likely hardware engineers & material scientists in the near future) => "everybody else". This transition has just begun, in the grand scheme of things; I'd estimate that we're at the equivalent of around 1900 on the Industrial Revolution timetable. The big losers likely won't be the middle class, who are probably the best positioned (in aggregate - see, it obscures a lot of relevant details) to move into the engineering class. The losers are likely to be the formerly wealthy, the descendants of the former owners & executives of old-line corporations. The landed aristocracy didn't make a great showing during the Industrial Revolution, and it's unlikely that the country-club set will make a great showing during the Information Revolution. Pick where you want to be in the new world order, and work hard to get there. One thing capitalism definitely does reward is action. The old economic order has just been blown up, but few people realize it yet; that makes it the best time to build the new one.

creamyhorror 11y ago
I like the thrust of your argument, but from my perspective in Singapore/Asia, that's not quite what I see. Big corporates are aggressively moving to dominate technology niches, while still dominating their existing verticals. * All the banks have strong deal/shopping apps * Property developers are continuing to build ever larger malls while investing in Amazon-like marketplaces (see Matahari Mall) * Every big corporate is investing in external startups or growing internal startups and innovation divisions * Practically all the big startup successes in Singapore, Indonesia and China are owned, often quite directly, by well-connected families or the state Everyone's aggressively responding to the tech upstarts and trying to control their own turf. The US-educated scions of well-connected families are especially responsible for techologising their behemoth family businesses and launching modern apps. New local players will have difficulty competing with old money's new generation of leaders. In other words, what I see here in Asia is the entrenchment of old money. The market is saturated with new entrants, but the leaders are those who are backed by old money, simply because of the firepower that those connections give them. I think this is fundamentally different from the situation in the Valley, where more disinterested VCs (rather than old money) back the new horses. My assessment is from the gut rather than statistical, so I'd love to be given an alternative view.
- srunni 11y ago
  > I like the thrust of your argument, but from my perspective in Singapore/Asia, that's not quite what I see...The US-educated scions of well-connected families are especially responsible for techologising their behemoth family businesses and launching modern apps. This is exactly correct. The GP's post reminded me of The Coming Transformation, a report by VC firm Formation 8: http://formation8.com/resources/the-coming-transformation/ http://formation8.com/resources/the-coming-transformation/ The report draws a similar comparison between the decline of the landed aristocracy during the Second Industrial Revolution and the coming decline of the industrial aristocracy due to "software eating the world." However, Formation 8 is taking advantage of this opportunity: one of their partners is the scion of a Korean conglomerate, and he's no doubt leveraging his family ties to obtain buy-in from many other HNW families from all over Asia: http://www.bloombergview.com/articles/2015-03-05/why-formation-8-loves-the-startup-game-in-asia-and-silicon-valley http://www.bloombergview.com/articles/2015-03-05/why-formati... http://www.bloomberg.com/news/articles/2015-06-25/sun-yat-sen-s-grandson-said-to-join-lg-scion-in-new-asia-vc-fund http://www.bloomberg.com/news/articles/2015-06-25/sun-yat-se...

fennecfoxen 11y ago

> Sure, but if people were moving up on aggregate, we would see the middle class growing as children of the poor made their way up. Eh, what you really want to look at is a series of cohorts moving on up as people grow older: a lot of US population growth is from immigration (legal and otherwise) who tend to have less income (which is why they immigrate), and from children born to recent immigrants (who have substantially more children than rich people in this country).

roymurdock 11y ago
Ok, do you have the statistics at hand? What do they tell us?
- toomuchtodo 11y ago
  Look at employment figures by age group and labor participation rate. You'll find that older people are working longer because they can't afford to retire. Also, Google "calculated risk blog" and read the last 2 months or so of posts. Pay careful attention to the posts about reduced GDP due to demographics, as well as new household formations lagging due to structural economic issues. TLDR Ain't nobody moving up in any cohorts. 70% of people make less than they did 12 years ago.

zo1 11y ago

That sounds like it would only apply if the relative population growth of each group was similar. The statistics say it's not, even with child-mortality rates, the poor outnumber the rich and that gap is increasing in number.