November 12, 2019

HIGHER EDUCATION BUBBLE UPDATE: Pity the poor avocado-eating graduates: University-educated millennials have absorbed elite values but will never enjoy the lifestyle.

Countless articles have rehearsed the class insecurities of the “left behind” Brexiters. Generally these unfortunates are depicted fulminating over pasties and ale in shabby market towns and grim post-industrial cities outside the London area. The object of their antipathy is the shiny “elite”, plugged into a promise-filled, multicultural urban life and the knowledge economy, seemingly buoyant in the new, frictionless modern world.

Leaving aside its substantive, real-world pros and cons, Europhilia has become a mark of devotion to the culture and worldview associated with this “elite” and the modern world it navigates. It is a value set strongly correlated with tertiary education and that has come to be called “openness”. . . .

Meanwhile, the boom in openness-promoting tertiary education produced not so much a boom in graduate jobs as inflation in the qualification levels required to do the jobs we already had. This has left many young people struggling to service a mountain of debt on salaries that are never likely to show much of the “graduate premium” they were promised.

Today, thanks in part to the “open” economy whose values form the foundation of the “cultural Remain” identity, the cost of living — and especially home ownership — has rocketed. Simple aspirations that were within the reach of the working class in the 20th century are an unattainable dream today for millions of young people far higher up the sociocultural pile. And yet those young graduates have all, in the course of moving away to get their degree, absorbed the “open” value set now explicitly taught in tertiary education.

The result is an Everywhere precariat, that has absorbed the values of a world that has little to offer it in terms of concrete benefits, and resolves this conflict by renting the heavily-subsidised and internet-enabled perks of a smarter lifestyle than it can afford to buy. Where once rentals might have just been housing and cars, today that can even include clothing.

Related: Kenneth Anderson: The Fragmenting of the New Class Elites, or, Downward Mobility.

n social theory, OWS is best understood not as a populist movement against the bankers, but instead as the breakdown of the New Class into its two increasingly disconnected parts. The upper tier, the bankers-government bankers-super credentialed elites. But also the lower tier, those who saw themselves entitled to a white collar job in the Virtue Industries of government and non-profits – the helping professions, the culture industry, the virtueocracies, the industries of therapeutic social control, as Christopher Lasch pointed out in his final book, The Revolt of the Elites.

The two tiers of the New Class have always had different sources of rents, however. For the upper tier, since 1990, it has come through its ability to take the benefits of generations of US social investment in education and sell that expertise across global markets – leveraging expertise and access to capital and technological markets in the 1990s to places in Asia and the former communist world in desperate need of it. As Lasch said, the revolt and flight of the elites, to marketize themselves globally as free agents – to take the social capital derived over many generations by American society, and to go live in the jet stream and extract returns on a global scale for that expertise. But that expertise is now largely commodified – to paraphrase David Swenson on financial engineering, that kind of universal expertise is commodified, cheaply available, and no longer commands much premium. As those returns have come under pressure, the Global New Class has come home, looking to command premiums through privileged access to the public-private divide – access most visible at the moment as virtuous new technology projects that turn out to be mere crony capitalism.

The lower tier is in a different situation and always has been. It is characterized by status-income disequilibrium, to borrow from David Brooks; it cultivates the sensibilities of the upper tier New Class, but does not have the ability to globalize its rent extraction. The helping professions, the professions of therapeutic authoritarianism (the social workers as well as the public safety workers), the virtuecrats, the regulatory class, etc., have a problem – they mostly service and manage individuals, the client-consumers of the welfare state. Their rents are not leveraged very much, certainly not globally, and are limited to what amounts to an hourly wage. The method of ramping up wages, however, is through public employee unions and their own special ability to access the public-private divide. But, as everyone understands, that model no longer works, because it has overreached and overleveraged, to the point that even the system’s most sympathetic politicians understand that it cannot pay up.

The upper tier is still doing pretty well. But the lower tier of the New Class – the machine by which universities trained young people to become minor regulators and then delivered them into white collar positions on the basis of credentials in history, political science, literature, ethnic and women’s studies – with or without the benefit of law school – has broken down. The supply is uninterrupted, but the demand has dried up. The agony of the students getting dumped at the far end of the supply chain is in large part the OWS. As Above the Law points out, here is “John,” who got out of undergrad, spent a year unemployed and living at home, and is now apparently at University of Vermont law school, with its top ranked environmental law program – John wants to work at a “nonprofit.”

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