One of the pecularities of the United States in the context of the industrialized world is that we have this (asinine) belief that class is no inherited and that through hard work all can own a million dollar mansion, etc, etc....

The irony again (it's that time in the morning, so everything is ironic) is that even though the concept of inherited class as a fundamental determinant of personal success or failure,  I.e. your father works in a factory, therefore so will you. (I was actually told this while in high school, as part of an explanation for why a teacher assumed I had cheated when she graded a paper of mine that she though I had plagarized.  Class is just as real as race in America, and far more blatant in the way it is used to discriminate, alas that's a whole other conversation.)

The irony again is that even though Americans don't acknowledge the existence of inherited class, that's the reality of our society. (Follow the link, it's a pdf of a report that shatters any illusion that America is a classless society.) Note the difference between the graphic on pg. 2 illustrating the American belief in social mobility, and the first graph one pg. 5 showing that in fact Europeans on whole (God bless the UK for breaking the rule) are far, far more socially mobile than Americans.  

I appreciate this section of the report:

relative mobility can occur regardless of what is happening to the society as a whole. Individuals can change their position relative to others, moving up or down within the ranks as one would expect in a true meritocracy. To illustrate the importance of relative mobility, consider three hypothetical societies with identical distributions of wealthy, poor, and middle-class citizens:

* The meritocratic society. Those who work the

hardest and have the greatest talent, regardless of

class, gender, race, or other characteristics, have the

highest income.

* The "fortune cookie" society. Where one ends

up bears no relation to talent or energy, and is purely

a matter of luck.

* The class-stratified society. Family background is

all-important -- children end up in the same relative

position as their parents. Mobility between classes is

little to nonexistent.

Americans sincerely believe that we live in a meritocratic society, where individuals get what they had coming.  Therefore, if you're 35 and trapped in working a job where you don't earn enough to support your family, it's clearly your fault.  Poverty, thus becomes a sign of moral failure.  (The complex interrelationship between religion and economics, thus become more important. And you have what are basically large businesses in these evangelical churches that preach a prosperity gospel.  God does good things for those who are faithful, so it you praise Jesus, and pass the collection plate, you too might one day be a rich man.)

Class is much more than income, it's about status in society. And the reduction of class to a matter of income in the United States is reflective to just how pervasive the market ethic is.  I'm fundamentally a believer in what Bordieu had to say about cultural capital.  Status comes in many forms.  It's something that even the most ardent neo-liberal will recognize.  Martin Wolf was in the FT about a month back saying that by allowing elites in industrialized countries from seeking distinction in terms of how much money they earn relative to "common" workers, we diffuse the tendency to seek distinction through cultural concerns that  may lead to ethnic conflict or war.....

Now he seemed to miss the flipside of this, which is that it seems entirely plausible that when the great masses of a nation are told that they are equal to all others but economic realities conflict with this, they might seek out distinction through religion and culture.  Hence, the United States, and the concurrent growth of inequality and relgious fundamentalism.

It's the "I may be poor, but at least I'm not a ......" (Insert your favorited racial or relgious epithet.)  Remeber that Americans are quite willing to question the status of the rich based upon moral matters.  (Hence the odd fascination with the latest antics of Paris Hilton.) It confirms in a sense that although Paris Hilton is wealthy without having worked for it, at least we know that when she dies (drug overdose anyone?) she will burn in hell.  Therefore, although she is rich in material terms, and I poor, in matters of status, I am wealth because I am morally superior to that blonde .....

I think I've made my point.  And you see, once you get to the bottom of it, it demolished alot of the sacred cows in Anglo-American popular discourse.  

Perhaps the most decieving aspect of utilitarianism is that assumes the individuals in maximizing their utility concern themselves only with themeselves.  Thus, we can operate from the assumption that individuals provide the basis from which we build our analysis of society.  Inherent to the utlity fetish is the belief that utility is absolute, unchanging, and therefore objective rather than subjective.  

Never was greater bullshit written.

If we are to accept this premise, than this means that more is always better, regardless of distribution.  The goal of the good society then is to increase the social good, to make more stuff for society.  So even if a few people are made destitute, so long as it creates more wealth for society as a whole, it's moral.  Distribution doesn't matter.

So let's talk about the often used pizza example.

Suppose that there's a special that if you buy two pizzas, you get one for free.  I only have enough money for one pizza, but luckily you plan to buy a pizza as well.  If we pool our money, we can have 3 pizzas between us, everyone is better off.  The situation is Pareto efficient.  

If an economic system is Pareto efficient, then it is the case that no individual can be made better off without another being made worse off. It is commonly accepted that outcomes that are not Pareto efficient are to be avoided, and therefore Pareto efficiency is an important criterion for evaluating economic systems and public policies.

If economic allocation in any system (in the real world or in a model) is not Pareto efficient, there is theoretical potential for a Pareto improvement - an increase in Pareto efficiency: through reallocation, improvements to at least one participant's well-being can be made without reducing any other participant's well-being.

Remember, we're both better off, we have 3 pizzas instead of 2 pizzas.  Now, I feel that I am due compensation in exchange for my initative in pooling my money with yours.  So we aren't going to split that third pizza equally.  You will take a slice, I will take the rest of the pizza.  Remember, you are still better off than on your own.  From the standpoint of absolute utility, you have no reason to bitch and moan about me being unfair.  My hard work got you that slice of pizza, and you being ungrateful, fault me for taking compensation for making us both better off.  You don't deserve even that one slice of pizza I tell you.

Now, we all know that this situation is not fair, yet orthodox economics teaches us that so long as we can emperically demonstrate that a given action means more pizza for all, the distribution of gains is not important.  It would be irrational for to willingly forego that additional slice of pizza just because they are upset that I took more of the extra pizza us buying together got us.  

In orthdox economics, distrbution of gains doesn't matter so long as all are at the least better off.

Never was greater bullshit written.

As Donne wrote, "No man is an island".  Utility cannot be calculated outside of the social context in which individuals operate.  Markets are thus socially embedded.  And the belief that there is something in the least bit natural about a system in which discussion of distribution is forbidden, goes out the window, when we start to experiment with giving individuals the opportunity to pay a price to make the wealthy more equal, without gaining anything themselves.

Behavioral economists at UC San Diego recently conducted a study in which tokens were distributed among experimental subjects, with a few getting a concentrated chunk of the wealth and a majority getting little. They offered the "poor" subjects the opportunity to pay a price to take money away from the rich. The catch was that rather than being redistributed, the money would simply disappear. Economic orthodoxy predicts that few would snap at the chance, since they'd be paying for something that would confer no direct benefit. But they did. In spades.

Though only one data point, it suggests that people have a profound sense of economic fairness, that we are all, more or less, intuitive socialists. As far back as Edmund Burke, conservatives have suspected as much and feared democracy for that very reason. Read James Madison in the Federalist Papers and it's clear that many of the Constitution's undemocratic elements were designed to prevent the expropriation of wealth from an outnumbered elite.

This central tension between laissez faire capitalism and the redistributive whims of a democratic electorate isn't discussed much. But it can poke through the surface during moments of clarity, such as the last election, when minimum wage increases passed in every state--red and blue--where they were on the ballot.

So people would rather a society be poorer and more equal, than (slightly) wealthier and unequal.  Hmmm.

Maybe, just maybe, there's more to social life, than this narrow fetishization of utlity that's driven social science since Democratic Socialism faltered in "the West."  Maybe what behavior we attribute to individuals seeking to maxmize their utility, in fact has a social basis.

We are all status seekers.  Money is but one form of status.

And perhaps, the concurrent rise of inequality, and forms of relgious fundamentalism and virulent ethnic ideologies is interrelated.  

I hate to call out Godwin, but remember that the the last great spate of economic liberalism that produced inequality ended in the Second World War.

Might it just be that status is better at explaining social phenomena than utility.