Unsurprisingly, Obama won big with poorer voters. Those with a family income of less than $30,000 gave 63 percent of their votes to him, and he also won a sizable majority—57 percent—of households with an income between $30,000 and $50,000.23 These were the voters most at risk in a weak economy. When asked by a pollster, an overwhelming majority of Americans believed that middle class people were more likely to drop into the low-income class than were low-earners to rise.24 The election was a referendum, at a time of economic distress, between security and growth, and given the choice, voters preferred security.
The issue isn’t going away. Voters remain very concerned with the state of the economy, eight years after the Great Recession began, and the Democrats have made it their issue. Nearly 90 percent of Americans think they belong to the middle class, reports the conservative American Enterprise Institute, and of them a clear majority believe that the Democrats will do a better job helping them.25 Unless the Republicans can connect with the voters on the issue, it’s not hard to predict future presidential elections.
Curiously, Obama and Romney resembled each other in important ways. Both had the royal jelly that seeks to command—but then no one would run for president today without that. More importantly, both men enjoyed risk-taking. Obama had left Harvard Law School and the presidency of its law review not to take up a job on Wall Street, but to become a community organizer. At 43 he ran for the Senate and four years later mounted an uphill battle for the highest office in the land. Romney, the child of privilege, left Harvard Business School to lead an asset management firm that invested in troubled companies and sought to turn them around. Both men are examples of a character trait writer Nicholas Taleb calls antifragility.26
Taleb distinguishes between three kinds or people or institutions, according to how they react to the stress of very high magnitude, extremely low probability events. These are the events at the extreme ends of a probability distribution, either for good or ill. For the fragiles, the golden upsides won’t help and the downside risks are like a fearful tornado swooping down on them. They are ill-prepared for the losses and when they occur feel them intensely. The second group is the resilient, those who can ride out the storm and not be affected by it. These are government employees, academics with tenure, most professionals. The third group, that of Obama and Romney, is composed of the antifragiles who thrive on the unforeseen event and profit from it. They are the risk-takers, who emerge wealthier than before. They’ll exploit the golden upside, while the downside risk is simply a learning experience from which they bounce back stronger than ever. “I wouldn’t be where I am now if I didn’t fail a lot,” billionaire Mark Cuban tells us. “The good, the bad, it’s all part of the success equation.”27
The Great Recession of 2008 was just the kind of unexpected, high magnitude event that illustrates the difference between Taleb’s three archetypes. The 0.01 percent of Americans, the super-rich, were antifragiles who were poised to make enormous gains from economic distress, while those below them in the one or two percent were the resilients who were little affected by it. But the rest, the 99 or 98 percent of Americans, were mostly fragiles. They lost their jobs and houses, or sensed that they were at great risk; and to them what Obama promised was safety from the storm, resilience. The promise was possibly an illusion, but it was nevertheless believed. What Romney offered was antifragility, entrepreneurship, a growing economy, yet more risk. And resilience beat antifragility at the polls. It usually does, and almost invariably in times of great stress.
What answer do establishment Republicans have for any of this? They can pick holes in some of the overstated claims about inequality—and holes there are, as we’ll see in Appendix B. They can point to our generous welfare policies, as I do in Chapter 11, and tell us that the progressive’s policy responses are mostly self-defeating. But if they think they can wish away the issue, in the face of its compelling appeal to voters, they are deluded and deserve the label John Stuart Mill applied to the Conservatives of his day: the stupid party. They are doubly stupid if they fail to recognize that the real issue is not inequality but immobility, and that that issue belongs to them, for they only have the answers to how we can return to Ragged Dick’s America. And that is the subject of the last part of this book.
Why Conservatives Should Care About Income Immobility
NOT ALL REPUBLICANS ARE CONSERVATIVES. AND SOME Democrats are conservatives. What makes one a conservative is the belief that, in the realm of public policy, there are institutions interposed between the individual and the state that matter. A libertarian who believed that only individuals count, and that their rights must be respected whatever harm they impose on society, would not be a conservative. Neither is the liberal who is suspicious of Edmund Burke’s “little platoons” of families, churches, and social groups that do things which the liberal thinks the state should do, and often by imposing what he sees as illiberal values.
Conservatives see things differently. Like Alexis de Tocqueville, they will celebrate the fact that Americans are the world’s greatest joiners. We’ll join churches, the Rotary, professional organizations, much more than people in other countries.
Why We Need Intermediate Organizations
Unless suppressed by the state, intermediate organizations and clubs will arise spontaneously, for they serve four basic needs. First, they permit people to unite around projects that voluntary groups can perform more efficiently than the state. Think here of the Red Cross, civil liberties associations, or simply the neighborhood association that picks up litter on the street, groups that do things the government can’t or won’t do. Such groups serve as focal points for individuals who wish to perform a task in common, and who otherwise might free ride and let the other fellow do it.
Second, by doing what the state might otherwise have to do, intermediate organizations shrink the size of the state and in this way preserve political liberty. Societies with weak civic associations find it difficult to resist the intrusion of state power, and this helps explain the different paths of Russia and Poland, post-communism. In 1721 Peter the Great had subjected the Russian Orthodox Church to government control, and when they came to power the Soviets simply continued the policy of suppressing rival social groups. On the fall of communism, there weren’t any subsidiary organizations around, and that made Vladimir Putin possible. By contrast, the Catholic Church remained a vibrant, independent force in Communist Poland, and today that country is much more democratic than Russia.
Third, social groups connect people to each other and satisfy the desire for solidarity, which is one of the deepest of human desires. We need other people to flourish. We need their friendship, their understanding, their love. After the 9-11 tragedy we took comfort from sharing our grief, and the sense of union with others helped ease the pain. We are strengthened, too, when bound to others, which was the point of The Gift Outright, the poem that Robert Frost recited from memory at the inauguration of President Kennedy.
Something we were withholding made us weak
Until we found out that it was ourselves
We were withholding from our land of living,
And forthwith found salvation in surrender.
The land was ours before we were the land’s, explained Frost. We owned it, nothing more. But then we came to belong to it, and this defined us as Americans. We belonged to it, even as it belonged to us, and by giving of ourselves were made stronger.
Lastly, intermediate groups promote trust, as people learn to rely