THE CONCENTRATION OF WEALTH, INCOME, AND POWER
The very rich are different from you and me. Yes, they have more money. --Ernest Hemingway
The significance of this response in the story "The Snows of Kilimanjaro" to the comment that the rich, or upper class, are different is usually lost. Overlooked is the extent, depth, and breadth of their economic advantage over the rest of the population. With this in mind, let us look at the income level of the upper class.
Income is defined as the amount of money that an individual 1 or family receives during a given year. The sources of income e can be either earned or unearned. Earned income derives s primarily from salaries and wages; an example of unearned I income is dividends from stockownership. The income distribution in America shows a substantial concentration at the top. In 1975, for example, the highest 20 percent of all families took home a little over 40 percent of the total income received by all families in that year (US Bureau of the Census, 1976: 406). During the same year, the top S percent of families received slightly more than 15 percent of the total income taken in by all families. These income statistics include some non-upper class members as well as the upper class.
THE INCOME-OF THE UPPER CLASS
Of prime concern is the concentration of income in the upper class as previously defined. Anyone with an annual income of $85,000 [in 1975] is considered part of the upper class. This means that approximately 0.5 percent of the American population is upper class. Rossides (1976 :131) presents income data that come closer to dealing with the upper class than the data cited above. In 1971 the highest one percent of families accounted for 7.5 percent of all family income received in America. Now, if perfect equality existed, each one percent of the population would take home one percent of the total income. Therefore, the top one percent of the American population receives approximately seven and a half times as much income as it would if perfect equality existed. If we limit our focus to the upper class alone-the top 0.5 percent of the population-the income concentration is even greater. Judging from a variety of government data, it is safe to estimate that the upper-class share of the national income is at least ten times its proportion of the population.
Having looked at these data in the aggregate, we will now examine who some upper-class individuals are. High on the list, but not at the very top, are the chief executives of the leading corporations in America. For example, in 1976 Rawleigh Warner Jr., the chief executive of Mobil Oil, received a total remuneration of $717,000 and John Riccardo of Chrysler received $700,000 (Forbes, 1977:244). These incomes are clearly astronomical in comparison with the $15,00 '. that the average American family earned in the same year. Ii fact, the yearly incomes of the leading corporations' chief executives are much larger than the lifetime earnings of the average American fates Given this, it is difficult to comprehend that most of the chief executives are not at the very top of the income distribution. Their yearly remunerations do not put them securely in the $1,000,000 and above income category.
Who is at this level? What seems startling is that there are people such as J. Paul Getty, who made $300,000 each day, on the pinnacle of the income pyramid. The extent of economic stratification in America today' can be summed up by the following comparison: the income of the average American family is surpassed by the income of the chief executive of General Motors ($966.,000 in 1976) in the same way that the latter's income is outdistanced by the income of those at the very top of the income hierarchy. In other words, not only is there a big difference between upper-class incomes and nonupper class incomes, there is also substantial-variation in income within the upper class.
Very important for understanding the highest echelon of the income distribution-the $1,000,000 and above category is to note that what predominates at this level is unearned income rather than earned income. In 1975, slightly less than 90 percent of the income reported on US tax returns for this income grouping came from unearned sources such as the dividends from stock and bond ownership _(Internal Revenue Service, 1978:13). A legitimate question to ask is whether or not upper-class people at this level of income worked for their ownership of such unearned sources of income. The answer given by Lundberg (1968:132) is clear. Practically all large incomes in America are based upon the inheritance of unearned income sources which allows for the perpetuation of high income from generation to generation of upper-class families.
The discussion of upper-class income so far has emphasized the higher echelons of the upper class. What about other upper class individuals who are not at the very top of the income pyramid? As indicated earlier, the lowest point in the income distribution that included upper-class people in 1975 was $85,000. The average individual with this amount of income clearly was not in the same position as the Duponts. But, as indicated in Chapter 1, such persons did receive $30,000 from unearned income sources. This placed them in a very comfortable position, compared with non-upper class Americans, because it meant that their incomes were substantially rooted in non-work sources such as dividends, interest payments, business ownership, and the like.
The discussion of the part that unearned mcome sources play in the economic lives of upper-class Americans naturally leads to an examination of the wealth accumulated by them. As will be seen shortly, the wealth concentration in the upper class is even more dramatic than the income concentration.
THE WEALTH OF THE UPPER CLASS
The wealth of an individual or family is the economic worth of everything that it owns: stocks, real estate, cash, bonds, cars, trusts, insurance, etc. The term used to indicate the total value of all such assets minus the value of liablities is net worth, a good index of overall wealth. It is difficult to obtain recent and precise information on the net worth of the upper class. According to James Smith (1974:143-180), as of 1969 only 0.1 percent of adult Americans had a net worth of $1,000,000 or more. In other words, very few people have realized the American Dream of being a millionaire. Nevertheless, the upper class is not far from the millionaire level. Thurow and Lucas (1972:12) show that in 1962 the top 0.5 percent of American families had a net worth of $500,000 or more. It is safe to assume that upper-class wealth has not declined in absolute terms since then.
How does the upper class share of the nation's total wealth compare with its share of the total income? The data presented in Table 1 allow an assessment. About a fifth of the total net worth of the entire population is accounted for by the upper class, the top 0.5 percent. This wealth concentration gives the upper class a slice of !h,! pie which is roughly twice as large as its already very large income share. In short, the income concentration pales by comparison with the wealth concentration. The upper-class advantage over the rest of the population is even greater with respect to wealth than it is with regard to income.
Although the upper class has a fifth of the total population's net worth, it owns a far greater share of the total population's assets in some specific categories. For example, the data in Table 1 show that in 1972 the top 0.5 percent of the population, the upper class, accounted for approximately 80 percent of all trusts. This fact reflects the attempt on the part of the upper class to minimize the effect of taxation on its wealth, so that upper-class members can pass on their economic advantage to their sons, daughters, and other relatives.
At the very heart of class (economic) stratification is the ownership, or nonownership , and control, or non-control, of the means of production-the property and equipment necessary for the production of goods and services in society. As mentioned in Chapter 1, a very good index of the ownership
Percent owned by Assets Top 1/2% Top 1% ________________________________________________________ Net worth 20.4 25.9 Trusts 80.8 89.0 Bonds 52.2 60.0 Corporate stock 49.3 56.5 Debt instruments 39.1 52.7 Real estate 10.1 15.1 Cash 8.5 13.5 Life insurance 4.3 7.0 ________________________________________________________
and control of the means of production is the ownership of individually-held corporate stocks and bonds. As already seen, the upper class owns approximately half of the bonds and corporate stock. For all intents and purposes, this reflects upper-class ownership and control of corporate America.
Finally, the data above highlight the point that there is a big difference in wealth between the top 0.5 percent, the upper class, and those immediately below them. For example, while the top one percent of the population owns 89.9 percent of the trusts, the top 0.5 percent alone controls 80.8 percent. A similar dominance by the top 0.5 percent of the other assets listed is also apparent. The top 0.5 percent makes the second 0.5 percent look poor by comparison. This hints at the extent of economic stratification between upper-class and non-upper class America, the major stratification cleavage in the United States. With this in mind, attention now shifts to non-upper class America.
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THE AMERICAN CULTURE AND THE REALITY OF CLASS STRATIFICATION
The facts of inequality in America are very disturbing. How do Americans rationalize such tremendous concentration of power and wealth? A major part of the answer can be found in the traditional American culture which praises individual success, diverts attention from class stratification, and locates blame for the excesses of inequality in nonthreatening places.
THE AMERICAN CULTURE AND STRATIFICATION
The American Dream Package
A core part of the culture is the American Dream Packagea set of values, beliefs, and rationalization which defend the existing stratification system. Included are the approval of equality of opportunity, individualism, competition, hard work, deferred gratification, social mobility, and success.
The belief in equal opportunity conveys the notion that everyone should be able to have an equal chance to get ahead, achieve, and be successful. This does not mean that most Americans believe that everyone actually should be equal in what they earn, own, and possess: that is, enjoy equality of condition. Indeed, it' is more typical for Americans to think that people should be rewarded according to what they do or produce. Both this phenomenon and other aspects of the American Dream Package have been explored by a variety of scholars.
Such disparate social analysts as Williams (1970) and Slater (1976) have observed that individualism is at the heart of the traditional American culture. Each person ultimately is responsible for the development . and growth of his or her own life. What one makes of one's equal opportunity to succeed depends upon what the individual does with his or her chances. This means that one must be competitive if one is to maximize personal achievement and success. The traditional American culture views' the world as being a Darwinian jungle where survival of the fittest is the rule. Analysts like Slater (1976) suggest that this competition is heavily laced with Oedipal striving. This view of competition gives an interesting motive to the pursuit of upward social mobility: outdo the parent of the same sex by improving upon one's initial family stratification position. We may be number two, but like Avis we try harder.
Regardless of whether or not the motivation is conscious or unconscious, upward social mobility has been held up as a goal ever since America began to serve as a land of opportunity for the first European settlers. Rags to riches mobility is to be accomplished by hard work according to the work ethic If a person works hard, he or she can go as far as desired because the opportunities for success are there. Survey results (Rytina, Form, and Pease, 1970) indicate that both rich and non-rich Americans today still hold the same beliefs. Of course, the culture does not say that upward mobility will be easy. One is supposed to defer gratification-or sacrifice now for future satisfaction-along the way. Staying in school for a longer period of time or delaying marriage until later ages are often pointed to as examples of deferring gratification. Once upward social mobility has been achieved, personal success has been achieved. The two are as one. Then, the traditional American culture encourages one to demonstrate the achievement of personal success by the consumption and display of material possessions that signify the status of success. Prestigious cars and homes, luxurious vacations, and leisurely pursuits are the appropriate grist here. Also, the consumption behavior of the successful usually determines what is considered "in" or "trendy" by most Americans.
Closely related to the foregoing is the belief held by many that most Americans have done well by the American Dream Package. This is exemplified by the conviction that America has a large "middle class" predominantly made up of whitecollar workers. Such people have "made it" and enjoy a very comfortable, affluent existence, so the stereotype goes. This tends to reinforce the belief in equality of opportunity for all people and in the rest of the American Dream Package. The "system" works.
Blaming the Individual
The system works, but many people, if not most, in America are upset with the stratification position that they personally "achieve." A sense of frustration develops because one has not gone further in the structure, that is, experienced rags-toriches mobility. Who is one to blame: the upper class; the poor; the individual person?
Let us consider the last option first, namely, the individual person as scapegoat. The individual person who is upset with his or her stratification position is encouraged by the culture's emphasis upon individualism and equality of opportunity to blame the self for not achieving more success. "It's my own fault. If I'd tried harder and had more stick-to-itiveness, I'd have gone further. I wouldn't be where I am today," reason many individuals. How often do we hear the above or some variation said explicitly or implicitly? A garbage man from a study by Sennett and Cobb speaks: "Look, I know it's nobody's fault but mine that I got stuck here where I am, I mean . . . if I wasn't such a dumb shit . . . no, it ain't that neither . . . if I'd applied myself, I know I got it in me to be different, can't say anyone did it to me" (1972:96).
Self-blaming for not going further in the stratification system has been a part of America's cultural baggage since the first European immigrants sought this fabled land of opportunity. The opportunity is there for those who want it. Those who do not take advantage of it have only themselves to blame. The open frontier of the West was especially interesting in this light. If one had a low stratification position in the East, one could always go West and start over again in an attempt to leap from rags to riches. Of course, most of those who tried this did not improve their situation much, but how could they complain? Now they had failed gain. It was their own fault. Self-blaming was reinforced.
Lewis (1978) characterizes the rationalizations and behavior cited above as reflecting what he calls the "individual-as-central sensibility." The fruits of inequality are not caused by some "system" or "structure" out there; rather, the blame is to be found rooted in the actions of individual people who are responsible-f"or their positions 'in the stratification system. Such lines of reasoning are familiar to the ears of most of us. Indeed, they are a part of the official wisdom.
It is important to note also that individuals who blame themselves for not going further in the stratification system do develop a variety of mental defenses. These defenses can minimize the sting of self-blame by covering up the gap between real achievement and imagined opportunities. As research dating back to that done by the Lynds has shown, a very important mental defense has been to think less and less of one's own stratification position and refocus attention upon the social mobility chances open to one's children. Such mobility can be shared vicariously by the parents and hence serve to make partial sense out of their own stratification position. Unfortunately, there is often a tragic underside to this scenario. The children in such families often suffer from the resulting pressure upon them and wind up resenting it. Even more poignant, however, is the fact that the parents of these families frequently tell their children either explicitly or implicitly not to be like them because they are failures. As Sennett and Cobb (1972) have indicated, such parents view themselves not as models for their kids but as warnings of what could happen to them if they do not become successful.
As the research of Chinoy (1955) and others shows, another means of coping with the self-blaming dilemma is to consume status items that represent success even though one has not directly experienced the success of social mobility. This means that one can fail to acquire some important elements of the American Dream Package and still try to share in its ultimate rewards by buying the right material possessions. The automobile industry provides a good example. One can buy a moderately priced, large car that looks like a Mercedes (and therefore signifies success) for slightly more money than one pays for an "economical" subcompact car. It is no secret that Detroit has been ttying to sell the average white-collar worker such cars by promising them the psychological sense of success in its advertising. There is much evidence of the efficacy of "success" advertising for ,many consumer products. The ultimate role of the resultant consumption is to divert attention away from the fact that people haven't really been as successful in the stratification system as they had hoped. It does this by making them feel like they actually have been successful. Of course, there are other escape valves for one's frustrations besides the consumption and display of the appropriate material objects.
Blaming the Poor
Enter the poor. People in the white-collar and blue-collar worlds, who have not gone as far in the stratification system as the American Dream Package tells them they should have gone, can also draw significant comfort from the fact that a relatively large group of poor people have not achieved as much as they have. This tends to inflate the stratification position of the nonpoor. The following line of reasoning is typical of this attitude. "I may not have gone as far as I could have gone, but at least. I've accomplished more than these people."
Why are the poor in their position? Many assume the stratification position of the poor to be the result of their not bothering to open up the American Dream Package containing the opportunity for social mobility and success. They blame the poor for not taking advantage of the opportunities available to all. They view the poor as failures because of their laziness, shiftlessness, and immorality. Such negative interpretations of the poor have been characteristic of the traditional American culture throughout our history.
Most Americans have assimilated the traditional culture well and are very adept, in the words of Ryan (1976), at "blaming the victim": The poor have bad housing because they do not take care of it, rather than the poor have little money for housing. The poor don't do well in school because they do not try to learn, rather than the poor don't succeed in school because there is inadequate funding for their schooling. In the above cases, the poor are victims who are blamed for their difficulties. The "system," the social :_structure, and upperclass America are not blamed.
Blaming the poor does not stop with blaming them for their own situation. The poor also are blamed for the frustrations felt by white-collar and blue-collar people. Perhaps the most glaring example of how the poor serve this function is illustrated by the following reasoning: "Most of the poor are on welfare. Most people on welfare are chiselers." Both statements are false, but they are more than obliquely implied when we hear frustrated folks in the middle of the stratification system say, "I had to work for what I've got." Such sentiments are played upon when newspapers place the telephone number of the welfare office on their front pages with the accompanying suggestion that anyone knowing of a welfare chiseler should call the number and inform the authorities. Similarly, the 1972 Nixon re-election campaign ran a televison ad where a person was shown walking to the welfare office. An ominous back ground voice informed a construction worker that it was his tax dollars that were subsidizing the welfare recipient. As we indicated in Chapter 2, many white-collar and blue-collar individuals have to stretch each of their dollars in order to survive from paycheck to paycheck. High taxes contribute to the squeeze that they are in. Following the logic of the Nixon commercial, many blame the poor for part of the squeeze because, "It's my tax dollars that are supporting the welfare chiseler." One result of this thinking is that the non-upper class s severely fragmented.
Another way in which the poor are blamed for frustrations felt by bluecollar and white-collar Americans is related to crime, one of the prime concerns of many. Crime is identified with "crime in the streets" which, in turn, is equated with crimes committed by poor people, especially poor blacks. This is important for two reasons. First, the poor once again provide a favorable frame of comparison for people in the middle of the stratification system. They can feel good about themselves by saying, "Well, at least I haven't sunk that low." Secondly, crime is seen as something that poor people do. Poor people are blamed for most crimes. Attention is shifted away from white-collar crime, or "crime in the suites." There is no question that the upper-class dominated media play a critical role in perpetuating this interpretation of crime. Upper-class crime, for example:, is rarely considered to be front-page material. As a result, people in the middle tend to blame the poor for one of their biggest worries-crime. This fits the overall pattern where those in white-collar and blue-collar America are encouraged by the traditional American culture to point the finger of blame downstairs at the poor rather than to look upstairs at the upper class for the source of their frustrations.
Blaming the Upper Class
In order to discuss the question of whether or not the upper class is blamed for the frustrations felt by non-upper class people, one should point out that not all nonupper class Americans perceive the existence of a small, wealthy upper class. Indeed, for some, a spin-off of the belief in a large, comfortable "middle class" is the corollary belief that an upper class as we have described it does not really exist; or if it does, it is not that much better off than the "middle class." America may not necessarily be classless, but there has been dispersal of the ownership of the means of production throughout a broad segment of the population, so this rationale argues. And furthermore, there may be some very rich people in America, but they really get clobbered by the tax structure.
We will save more specific responses to this mindset until we discuss the reality of stratification in detail. We will only indicate here that, as we have argued in Chapter 2, the upper class does own and control the means of production in the United States. Why, then, is not the upper class blamed for the stratification frustrations felt by non-upper class people? It is not possible to precisely rank the reasons because so little empirical research has been done on the non-upper class view of the upper class, an interesting point in and of itself. Nevertheless, the following reasons seem to be important for those non-upper, class people who do actually perceive the existence of an upper class in America.
A belief held by some is that upper-class people deserve their position because they have worked hard to earn it. They have opened up the American Dream Package correctly. They have followed the rules of the game, so naturally they are where they should be. Furthermore, they are models for the rest of us to follow rather than blame. An approximate sociological rendition of this argument is the functional argument for the existence of stratification (Davis and Moore, 1945). Loosely translated, the functional argument states that stratification is a reward system designed to motivate people to work hard. It pays off those who do work hard and get to the top. Such arguments and beliefs, however, overlook the fact that most large incomes in America are based upon the inheritance of unearned income sources (Lundberg, 1968). Such knowledge, though, is not part of the conventional wisdom. Rather, Horatio Alger rags-to-riches stories are presented to the non-upper class by a variety of upper-class dominated institutions.
Another interpretation of the upper class is that it provides the non-upper class with a fantasy world. Non-upper class members can vicariously enjoy the life-style of the more visible segments of the upper class. One can see ample evidence of this in contemporary society. The "people" sections of newspapers and television news programs draw heavily upon this "reality" by keeping us aware of the latest doings of a variety of upper class members. Similarly, if one goes on guided tours of major metropolitan areas, notable upper-class homes are always singled out to a chorus of oohs and aahs from those on the tour. Tours of the homes of the rich also attest to the admiration that many non-upper class Americans feel for the upper class. Of course, positive feelings towards the upper class are not always evoked by the examples cited above. This is especially the case when one hears of the extravagances of some of the rich (for example, parties in Newport, Rhode Island, where cigarettes for guests have been rolled in one hundred dollar bills). Nevertheless, on balance, the fantasy world created by the upper class encourages the non-upper class to identify with them rather than blame them.
On the other hand, negative feelings are engendered by the knowledge that a significant number of upper-class people have skirted the edges of propriety in order to attain their position. America, for example, has a rich tradition of robber barons-- Carnegie, Frick, Harriman, Mellon, and Rockefeller, for example-who essentially swindled their way to incredible wealth. Indeed, Slater (1976:42) asserts that most great for tunes in America have been made this way. The truth of this statement upsets members of the non-upper class. Also, it would seem to lead many to a stance of blaming the rich rather than the poor and cause them to want to fight for change in the existing distribution of wealth and power. Such is not necessarily the case, however, as a number of further rationalizations attest. For example, some argue that even if upper-class-wealth originated in some illegalities, one cannot blame the heirs of the robber barons, since they have only inherited their position.
Some members of the non-upper class also defend upper class people by praising them for their philanthropy. They feel that the rich give their wealth away to charitable causes from which non-upper class people benefit. A popular show on television, "The Millionaire," dramatized this point by having an anonymous millionaire give out a million dollars to some needy soul each week. It should be pointed out that upper class philanthropy is rarely given to causes that might severely question or threaten the political and economic status quo. (An exception to this is one of the Pillsbury heirs who has been known to give money to somewhat radical causes and thereby has the nickname of the "Doughboy.") Indeed, a considerable amount of so-called philanthropy is not only a means of defending and maintaining the position of the upper class but also a tax write-off to boot. As a prime example, Nicholas von Hoffman notes that "Hughes' only charity, the Howard Hughes Medical Institute, was a philanthropic fraud whereby the tax laws were manipulated to keep the tycoon yet richer and more powerful" (von Hoffman, 1979:21).
There are other negative interpretations of the upper class which do not usually lead non-upper class people to blame the upper class for, their frustrations. Some still have a religious rationale that says the upper class is not to be envied because an abundance of money leads to temptations which make it difficult to lead a good life. "It is easier for a camel to pass through the eye of a needle, than for a rich man to enter the kingdom of God" (St. Mark: Chapter 10).
Somewhat similar to negative moral interpretations of the rich are rationalizations pointing to the psychological and character defects which seem to flow from possessing a lot of money. Examples confirming these suspicions abound. J. Paul Getty once again provides us with illustrations of these points. It seems more than a bit odd that a man of his wealth would have a public telephone installed in one of his homes. Getty did this in order to avoid having people make calls on his private telephone that would have cost him money. Getty also had one of his homes decorated in the style and mode of ancient Rome because he thought that he was the reincarnation of the emperor Hadrian. Howard Hughes, of course, barely needs mention in this context. Most have already heard of his bizarre, reclusive life and the way in which he let his body decay and become dependent upon drugs. And the list of upper class people with similar horror stories could go on and on. Obviously, though, not all upper-class people suffer severe mental difficulties. In fact, they have the opportunity to enjoy life and have good mental health more than anyone else. The belief that upper-class wealth brings special problems, however, probably does serve to comfort some non-upper class people about their own difficulties.
A final defense of the upper class by the non-upper class is the reasoning that the upper class, because of its position, can and does help the rest of the population in ways other than philanthropy. For example, it can provide political leadership. As we saw in Chapter 2, the upper class does play a significant role in the political process, but it seems clear that this role is one'. of either protecting or furthering upper-class interests rather than non-upper class interests. A similar rationalization holds that the upper class helps the non-upper class by providing it with jobs in the corporations that the upper class owns and controls. This is a version of the formula that business success ultimately means success for all-via a gradual trickle down effect. Such a rationale also usually includes the belief that if anything is done to upset upper-class people (for example, changing tax laws that currently favor them), they can take their money out of certain business ventures which, in turn, will mean the end of jobs for average non-upper class people. While this is potentially true to some degree, a fundamental question to ask is why the upper class is allowed to own the corporations in the first place. Why is it allowed to have such a stranglehold over the economy and, as a result, the rest of the population?
By the way of summary, some of the rationalizations discussed above defend the position of the upper class in America. For example, parts of the non-upper class believe that the upper class has earned its position and deserves it, and that the upper class provides the non-upper class with jobs, material for fantasies, political leadership, and charitable contributions. Such lines of reasoning encourage non-upper class people to admire the upper class and, perhaps, to model themselves after the upper class. "Work hard, become successful, and you can become part of the upper class yourself," is an opinion voiced by quite a few members of the non-upper class. Certainly such arguments do not lead many into a position of wanting to blame or challenge the upper class. Other rationales considered above take a more negative view of upperclass people by emphasizing their faux pas such as the bizarre behavior often attributed to them. Such beliefs probably have the effect of making non-upper class people more accepting of their own fate because the advantages of the upper class are seen as not worth the consequent troubles. Finally, there also are interpretations of upper-class people that show resentment. These views see them as extravagant robber barons who exploit the working man. There is no doubt that many Americans harbor such thoughts that, indeed, do blame the upper class. That there is not more blaming of. the upper class that gets openly and politically expressed is surprising.
Cultural Obstacles of a Political Nature
Even for those who do blame the upper class, the American cultural system contains a number of political beliefs and values which make it difficult to translate any such blame into political action. This is because the upper-class dominated stratification system is propped up by certain political values through which any blame must be filtered.
Crucial to the political part of the culture is the belief in patriotism or love of country which many have maintained even though Viet Nam and Watergate have tarnished it some-. what. To blame the rich and carry out that blame into political action violates patriotism for many: The upper class is the American Dream, even if some upper-class members have not earned their position honestly. Therefore, to challenge the upper class is unpatriotic. On the other hand, to blame the poor and carry out that blame into the political arena is allowable because the poor represent what is worst about America: They haven't opened up the-American Dream Package. Patriotism is also important in this context because to blame the upper class and to act accordingly in a political way is to question the existing stratification position of the upper class. This means challenging the political staus quo and challenging the status quo is often viewed as unpatriotic.
Another political value worthy of mention here is nationalism: that is, putting national interests first which, for many, flows out of patriotism. Nationalism creates a safety valve for those upset with internal stratification because it fosters negative feelings about foreign countries and peoples that, in turn, become scapegoats (or the frustrations about inequality in the homeland. Nationalism and patriotism can .alsoencourage non-upper class Americans to compare their position with that of non-upper class people in other countries-especially third world countries-rather than with the American upper class. To do the former instead of the latter can lead one to a more resigned feeling about the concentration of wealth and power within the United States.
Finally, it is difficult to implement politically any desire to blame the upper class because of our belief in democracy, or government for the people and by the people. Many believe that our democratic institutions, such as the universal right to vote, have delivered the goods for the great mass of the populationthe non-upper class. This makes content some non-upper class members who might otherwise be tempted to fight for change in the existing stratification system.
Of course, even those who do not buy any of the values and beliefs discussed so far face major obstacles. Aside from demanding a substantial amount of money, getting. political change in America requires a lot of time and energy. When this political reality is coupled with the fact that most non-upper class people have little time or energy left over after trying to survive their nine-to-five workdays, it is easier to see why more blaming of the upper class is not openly expressed. An attitude of fatalistic acceptance ("You can't fight city hall") can readily follow. But, it doesn't have to be this way.
Status versus Class Our consideration of traditional American culture concludes with a subtle, yet significant, point discussed in Chapter 1. The value system emphasizes status differences within the non-upper class (the white-collar world, the blue-collar world, and the poor) more so than the class difference between the upper class and the non-upper class. In short, status position is stressed more than class position.
People focus on different things depending upon whether class or status is viewed as most pivotal. Class position is one's economic position (that is, one's relation to the means of production). Status, on the other hand, is equivalent with prestige. While class position influences status position, other factors related to status such as style of life, taste, and occupational role are more salient in American society.
The role of status in America can be seen in relationship to the American Dream Package values of success and the consumption of material possessions symbolizing success. As mentioned previously, one can short-circuit the American Dream Package by trying to buy the appropriate material possessions even if success has not been achieved. In so doing, one can seek the status of those who are successful: to buy material possessions like those of the successful is to buy their style of life and their higher status. Big Business attempts to cash in on this tendency by mass producing and by advertising items thought to convey status. A good example is when what is high fashion in clothing today appears in moderately priced stores tomorrow. Unless one sharpens his or her critical eye, it is difficult to tell the difference between big-name designers' masterpieces and mass produced goods. As. a result, many Americans seek to-improve their status by buying the right things,; but they just "keep up with the Joneses" because the Joneses are doing the same thing. Furthermore, virtually all non-upper class people who participate in such status-seeking consumption really fail to achieve the elite status of the upper class.
Such status concerns have important effects, however. Because we are involved in status seeking via consumption, our class position in the system of economic production is either forgotten, obscured, or downplayed. In fact, when we do think of our work roles, we think of them- more in terms of statu(prestige) than class (relationship to the means of production) The culture encourages us to make status comparisons with other workers. A major way that we do this in America is by means of the white-collar versus blue-collar comparison.
White-collar workers have more status than blue-collar workers. Their incomes are higher. They wear "nicer" clothes to work. They get paid a salary, not an hourly wage. They do not have to "punch in" at a certain time every day. They do not< have to ask for permission to go to the bathroom while at work as some blue-collar workers must. Also, white-collar workers do not belong to unions as do blue-collar workers. This is because union membership is viewed as a status detraction. (Ironically, more and more white-collar workers are joining unions today and giving up a status advantage over the blue collar world because it is getting more and more difficult to eat prestige.)
An interesting footnote to this discussion is that the concept of class has been co-opted by the traditional American culture. By co-optation we mean that the concept has been redefined for everyday usage. It is drained of any radical meaning and, on the contrary, made unthreatening and safe. Furthermore, sometimes the newly-defined term of class is actually used to promote the products of the traditional culture. To illustrate this point, the concept of class in its strictly sociological meaning (especially in the Marxist tradition) has readily brought forth revolutionary images of class struggle and class conflict. Sociological discussions of "class" also suggest that people have a relatively fixed, permanent position in the economic system. Such meanings do not appear in our every-day usage of the term. Instead, "class" is taken-to mean high styleavior and appearance, precisely what part of..status refers to in the more technical sociological interpretation. As a result of this translation, when we say in everyday conversation that someone has "class," we are really saying that they have status. Commercials for a variety of products have used the term of class in this co-opted sense (An advertisement for one beer claims, "It's got class."). Indeed, the concept of class has come a long way.
Status seeking via consumption, white collar/blue collar comparisons, and the cooptation of the term "class" are all examples of how the American culture stresses status more than class. The net effect is that the value system emphasizes awareness of relatively minute status differences within the nonupper class while, at the same time, it blocks consciousness of the gross class difference between the upper class and the non-upper class.
Thus far we have discussed how the American culture stands on stratification related issues. The cornerstone is the American Dream Package which says that individuals should be competitive and work hard so that upward social mobility and success can be achieved. Those who do not "make it" are supposed to blame themselves or the poor but not the upper class. If one does blame the upper class, the political values of patriotism, nationalism, and democracy enter in to defuse much of the political action that could be based upon the blaming of the upper class. Also, the culture promotes status awareness and discourages class consciousness. Finally, all these aspects of the traditional cultural system get perpetuated in America through the institutions of the economy, the political structure, the educational system, religion, and the family.
THE REALITY OF STRATIFICATION
An Overview
What about the reality of stratification in America today? How does it compare with the traditional American cultural system outlined above? Obviously there are both contradictions and agreements between the two; but, on balance, the evidence suggests more contradictions. A major area of discrepancy between the culture and reality concerns the extent to which class stratification exists. As we noted above, the culture emphasizes status and downplays class. A careful reading of Chapter 2 shows how extreme class stratification actually is in America. The contrast between the upper class and the non-upper class in income, wealth, and control of the economy makes the status stratification between the elite, the white-collar world, the blue-collar world, and the poor seem like mere child's play by comparison. The top of the upper class has astronomically high yearly incomes, while the median family income for the non-upper class in 1975 was under $15,000. The latter figure is less than one half of what it took to start leading a comfortable existence. Obviously, this information challenges the widely held belief that most Americans have an affluent life-style. Also, if we include the reality of those at the very bottom of the non-upper class (the bag ladies, the elderly, and the children who must eat dog food in order to survive), the starkness of the contrast between the top and the bottom of the class stratification system becomes all the more apparent.
That the upper class owns 50 percent of the corporate stocks and bonds in the US shows the impact of class. Such concentration violates the belief that the ownership of the means of production has been dispersed through a large segment of the American population. In reality, very few non-upper class people "Own a piece of the rock"; this is attested by the fact that in 1969 the net worth of 75 percent of the population was $10,000 or less. A majority of the population owned virtually nothing, much less the means of production.
The facts of class stratification also contradict the rationalization that the upper class has earned its position. As indicated previously, most large incomes in America are based upon the inheritance of unearned income sources. Earning one's position by playing out the American Dream Package and experiencing rags to riches social mobility hardly characterizes the situation of most upper-class Americans. Another belief about upper class people is that they may have high incomes, but at least The American Culture and the Reality of Class Stratification 71 they have to pay high taxes by virtue of the system of progressive taxation in the United States. In reality, most US taxation is either directly regressive, such as the Social Security tax, or it is indirectly regressive by means of a system of tax loopholes. The ultimate reality is that a J. Paul Getty can pay the same yearly tax as the average family that earns the median income.
Tax laws, of course, are determined by who has political power. This leads to another example related to the contrast between the traditional culture and the reality of class stratification. Americans believe in democracy-that all should have a say in the political process. However, as Chpater 2 points out, the class position of the upper class is translated by a number of means into inordinate political power. To call the upper class a ruling class is not an exaggeration. Its effect is to make our belief in political democracy difficult, if not impossible, to implement.
Difficulties in the American Perception of Stratification
Much stratification research dating back to the Lynds' studies of Middletown documents the failure of Americans to recognize the severity of stratification in America. Indeed, many Americans today would be surprised at the steepness of class stratification from the bottom of the non-upper class to the top of the upper class.
Lack of stratification recognition occurs at both the personal and aggregate levels for non-upper class people. Both difficulties in perception deny or blur stratification reality and consequently fall in line with the traditional culture. Why don't non-upper class people have this consciousness of where they personally fit in the stratification system? Partially, the lack of conscious ness can be traced back to the cultural belief in individualism which stresses that each one of us in unique. Flowing from this is the rationale that we don't really belong to groups or categories of people; group membership doesn't contribute to our identities. Therefore, membership in a stratification group is not readily conceptualized. When non-upper class people do overcome these tendencies and begin to see stratified groups, they are still subject to misconceptions. Lenski (1966:87), for example, notes the tendency to exaggerate personal stratification position by inflating it.
Perception of the whole stratification system at the aggregate level by the non-upper class is even worse. We have already noted the exaggeration that America as a whole is an affluent ".middle class" society. This parallels the exaggeration made at the personal level. Another problem uncovered in much stratification research is that people's understanding of the stratification system gets even foggier and more skewed as they try to perceive parts of the system removed from their own personal position. Part of the reason for this may be due -to the fact that, as Parkin (1971:61) suggests, people have a tendency day in and day out to compare themselves with those who are very close to them in stratification position. People less frequently compare themselves with those who are markedly better off or worse off. When the latter comparisons are made, it is understandable that even more miscalculations are made. This suggests, once again, that non-upper class people's understanding of the whole stratification system is not even as good as their admittedly poor perception of their personal locations. Such inaccurate perceptions form a continuity with the traditional culture which encourages false assessments of the stratification system.
A marked exception to the lack of stratification awareness in America is the case of the upper class which, as Domhoff (1970) and others have demonstrated, does have class consciousness. In fact, there is evidence from Coles's (l 977) research showing that upper-class children are not only conscious of their position., bait also have guilt feelings over their advantages in relation to the rest of the stratification system. Interestingly, non-upper class teachers, among others, play a role in teaching such children eventually to be comfortable with their situation. The result is that the upper class, by and large, is conscious of and quite content with its position. Furthermore, the upper class consciously stands together in interesting contrast to the non-upper class.
Social Mobility
Perhaps the most glaring example of a contradiction between the American value system and the reality of stratification is in the area of social mobiltiy. As discussed above, the culture is very much centered around the belief that an individual, by means of competition and hard work, can experience a dramatic leap from rags to riches-the dream of upward social mobility. As much research has indicated the percentage of people who experience significant mobility , is very small indeed. Tully, Jackson, and Curtis (1970), for example, show that there has been a fair amount of mobility in the United States. Somewhat more has been upward rather than downward. The overwhelming majority of this mobility, however, has been within and between the white-collar and blue-collar worlds. Small leaps in mobility are made by some. Large leaps are made by very few. The latter fact is illustrated by the finding of Blau and Duncan (1967) that very few sons of blue-collar laborers rise into the professional elite during their own occupational careers.
The mobility that has been documented in America-small changes in stratification position--is not the rags-to-riches kind fantasized by those in search of the American dream. Most of the mobility, changes within and between the white- and blue-collar worlds, represents status changes within the non- upper class, but not real mobility in the system of class stratification as we have described it. This means that there is virtually no mobility from what we have described as the non-upper class in into the upper class. In other words, the mobility that occurs in America seldom involves people moving from a position of not owning the means of production into a position of owning a significant share of the means of production. David Rockefeller provides an illustration. As Hoffman reports: "The American Way has been good for David, and he likes to say that free enterprise can mike life good for everyone, yet in candid moments he has admitted that no person today could accumulate what he (David) was given" (Hoffman, 1971:127).
Why is it so hard to make big jumps in social mobility? The basic answer to this question is that the avenues of mobility into the upper class are severely restricted. The business world gives a good example. As mentioned previously, the small business man, "the little guy" who wants to start his own business, runs into an almost insurmountable problem. He will have to compete against much larger corporations that often already monopolize the field. We would think it funny if someone decided to start his own telephone company from scratch and compete with AT & T, but this essentially is what- is done every day. The results are consistent. One half of new businesses go bankrupt during the first two years. Many of the rest barely survive.
Another version of the rags-to-riches mobility dream consists of climbing into the elite of -top professionals and managers. Actually, many of these people are not upper-class but, rather, at the top of the non-upper class. Nevertheless, the limited access to such a dream is seen when one examines the cost of the basic entry requirements needed: a college education and, perhaps, a professional degree beyond the college diploma. For example, it is fairly obvious that a substantial amount of money is needed in one's family background if one wants to go to college. Resident students at some colleges today pay $10,000 per year for their expenses. This is about one half of the yearly income for the average American family. The situation is so serious that Harvard University has had to start a financial aid program for "upper-middle class" students-in other words, from the top of the non-upper class-at the undergraduate level. At the graduate level of education, as one might expect, the class bias continues. Lyons (1978), for example, reports that offers as high as $250,000 have been made to some medical schools in order to gain admission. All of this merely staves to highlight the extent to which one's inital stratification background places limits upon how far one can go in the educational system. Ultimately, with rare exception, the- educational institution perpetuates the existing stratification system by, limiting entrance into the elite of top professionals and managers.
A final point about the reality of social mobility in America needs to be made. The inability of most to experience mobility into the upper class has a feedback effect upon the cultural system in that it reinforces the emphasis upon status discussed earlier. As Reissman argues: "With access to the upper reaches of the structure made more difficult, the person turns to a closer inspection of the position that he holds and tends to enhance it with essentially irrational and nonfunctional criteria that make it seem more prestigeful. Style, taste, family lineage, and occupation, for example, come to be depended upon as status criteria, while the harder features such as wealth and power, which are characteristic of relatively few of the topmost positions, some to be underplayed" (1959:29).
Welfare and Wealthfare
If one is to speak accurately of the reality of the stratification in America, one must examine the systems of subsidies for the poor and the rich, known respectively as welfare and wealthfare.
The welfare system is the primary system set up to aid the bottom of the non-upper class-the poor. As noted above, the poor are pointed out by the rest of society as examples of people who have not succeeded because they are lazy and don't want to work. They also are viewed as failures who are to be blamed for their situation. Consequently, it is thought that the poor are undeserving of help; this attitude sets the groundrules for the welfare system. The poor are to be regulated (Piven and Cloward, 1971) by eligibility requirements which filter out the undeserving poor. The welfare aid levels are kept low, usually below subsistence, so that the poor are encouraged to work rather than to take a "handout." The effect of this is to create a pool of cheap labor ready to do the "dirty work" of the society for extremely low wages.
It is important to note that the negative representation of the poor which is the basis for the current welfare system is false. For example, the notion that the poor don't want to work is refuted by considerable evidence. Goodwin (1972) suggests emphatically that most of the poor do indeed want to work. They share the same desires for success and upward mobility that characterize most other non-upper class people.
"What about the unemployed poor? Why don't they work?" In response, Levitan explains that "Despite canards about the link between laziness and poverty, most of the working-age poor who do not work are unemployed simply because they are not employable, or because jobs are not available for them. Fully two-fifths of them are disabled. Nearly all lack educational and job skills. For the majority of these poor; some form of income support is essential to help them escape deprivation" (1977:18).
Even though the poor deserve a welfare system built upon better premises, they are still blamed for the shortcomings of the one that exists. The poor still get blamed for abusing the welfare system. Actually, far from ripping off the welfare system, most poor people do not even receive benefits from programs designed to aid them. Nevertheless, the finger of blame gets pointed at those who "cheat" the welfare system. The popular, stereotyped image of the poor is the person driving to the welfare office in a Cadillac. In reality most who receive welfare still are unable to afford an adequate diet. Of course, the "chiseler" image is encouraged by the upper-class dominated media. Even the highest estimates of actual "chiseling" by welfare recipients are substantially lower than what the media leads the public to believe. An effect of this is to divide parts of the non-upper class against each other. We do not mean to excuse anyone for "cheating," but it should also be pointed out that the white-collar welfare bureaucracy is responsible for much of the welfare abuse. Finally, as we shall see, the chiseling that occurs in the welfare system is minor in comparison with the excesses of the wealthfare system.
As discussed earlier, the traditional American culture furnishes a number of rationalizations for the existence of the upper class. ("They earned their position." "They donate their money to charitable causes.") All of these arguments prop up the subsidy system for the upper class, known as wealth; fare, from which the upper class does fare well.
Significant aspects of the wealthfare system include govern mental purchases, governmental price supports, and export import programs (Turner and" Starnes, 1976). Such policies insure that the profits of the upper-class owned corporations are maintained at a high level. Also of tremendous importance to the wealthfare system is federal taxation at both the personal and corporate levels. As Stern (1972) suggests, this system of taxation, which includes many loopholes for the rich, is essentially "Uncle Sam's Welfare Program for the Rich." The system of loopholes described by Stern (1972) benefits the family with an annual income of one million dollars or more to the tune of $720,000--a family with an income of under $3,000 gets a "handout" of $16. The system allows many people with incomes of over $200,000 to pay no taxes. In 1974 there were 244 such people. The system allowed J. Paul Getty not to pay approximately 70 million dollars in taxes each year. It has enabled upper-class owned and controlled corporations such as Steel and Ford to pay no taxes in some years.
Sometimes the attitude is expressed that while the upper class does benefit by the wealthfare system, it would not make much difference in terms of dollars and cents if such policies were stopped. ("There are not that many upper class people and, therefore, their `free lunch' does not cost that much.") Such is not the case. If the system of tax loopholes were removed, it would generate 77 billion dollars according to Stern (1972). Remember also that this is but one aspect of the wealthfare system outlined above.
For purposes of comparison, it is interesting to note that the cost of a guaranteed annual income plan bringing all poor Americans out of their destitute situation has been estimated at about 30 billion dollars. This plan, however, has been labelled as a "giveaway" program too outlandish to be accepted by mainstream Americans from the white-collar and blue-collar worlds. These evaluations reflect a situation where the wealthfare system is not as visible to most people as is the welfare system, since the upper-class dominated media choose their targets for blame very carefully. These evaluations reflect a culture wherein the values tell us to blame down instead of blaming up. Finally, they create a situation where an upper class politician can pay no taxes himself and yet base part of his political appeal to white-collar and blue-collar people on an attack of welfare chiselers.
SUMMARY AND IMPLICATIONS
The reality of stratification in America contradicts the traditional culture's view which emphasizes status stratification rather than class stratification. The very real differences in wealth and income between the top and the bottom in class stratification are not even mildly suggested by the culture. In fact, the culture encourages inaccurate appraisals of the stratification system. Furthermore, the rags-to-riches social mobility stressed by the culture is not realized in the actual lives of Americans. Mobility into the upper class is virtually non-existent. The story with respect to the welfare and wealthfare systems is more mixed in regard to the question of whether or not there is a contradiction between the culture and the reality of stratification. Both systems implement parts of the culture that excuse the upper class and blame the poor. On the other hand, both play a role in perpetuating the existing class system by keeping the upper class rich and the bottom of the non-upper class poor. Here both systems contradict a value of great importance to the American Dream Package: equality of opportunity.
What are the implications of the above for non-upper class America demanding and achieving change in the distribution of wealth and power? The culture tends to keep people unaware of how stark class stratification actually is and how little equality of opportunity and social mobility really exist. If people do become aware, a series of rationales are offered which blame the difficulties of stratification upon the individual or the poor-but not the upper class. If Vie upper class is blamed, the political values of patriotism, nationalism, and democracy intercede and tend to prevent political action that challenges the existing stratification system. Also, in response to stratification problems, the culture points people in the direction of individual solutions such as upward social mobility rather than collective action such as social movements. Therefore, if successful attempts to alter the current distribution of power and wealth are to be made, a major obstacle to be dealt with is the American culture itself.