Image: Antilia Residence, Mumbai
Mike Savage (LSE)
This issue of Discover Society – edited by Mike Savage and John Holmwood – celebrates Thomas Piketty’s Capital in the Twenty-First Century, which has had a remarkable public impact since its publication in English. We have not planned a direct discussion of that work, but a series of response to the important issues of wealth and inequality it raises. It coincides with the publication of the British Journal of Sociology December 2014 issue, which will shortly go live, as an open access issue of interdisciplinary essays (and response by Piketty) that discuss the book directly. It is unprecedented for any academic sociology journal to devote an entire issue to extensive discussion of one book. This reflects the fact that Piketty’s book has been of profound significance in opening up new horizons for inquiry around questions of capital accumulation, wealth, inheritance and advantage. The book will also be the subject of a special day-long seminar at the LSE on May 11th 2015 where Piketty and his reviewers will be in debate. This seminar will be an inaugural event of the new International Inequalities Institute at the LSE and will be open to all who wish to attend.
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Over the past year the very wealthy have been fully in the spotlight as never before. This interest extends across the media and academia and is a key political issue, as notably in the Occupy movement (on which, see this British Journal of Sociology discussion). The popularity of Thomas Piketty’s remarkable book can only be understood as the culmination of this awareness, yet sociologists should also feel proud that we have seized this moment to address what is surely one of the defining features of our time. Indeed, it is likely that a hundred years from now, future historians will look back at these last two decades as witnessing a process of astonishing class formation at the top reaches of the social hierarchy.
A range of metrics can be reeled off to indicate the scale of this shift: Piketty shows that the number of dollar billionaires has risen ten-fold from 140 in the late 1980s to 1400 by 2010, by which time their total wealth exceeded a staggering $5,400,000,000 – a twenty fold rise in less than thirty years. Roger Burrows recites that the number of ‘net high worth individuals’ (defined by having over $1 million to invest) has risen 60% in just six years and now includes around 13.7 million people across the globe. This latter number easily surpasses the population of Sweden, and is equivalent to well over half the population of Australia. Millionaires, even billionaires, are no longer social oddities on the Howard Hughes mould: they mundanely operate across the routine circuits of contemporary global capitalism and are central to the dynamics of society today.
Placing this development historically, one could crudely identify the period of industrialisation from the late 18th century as marking the emergence of a manual working class associated with the capitalist expansion of Europe and North America, and the periods of bureaucratic state expansion and ‘Fordist’ capitalism from the middle of the 20th century as seeing the growth and consolidation of a salaried middle class alongside this working class. Can we see the recent emergence of a new kind of super-rich as equivalent in historical significance? Are we seeing the kind of profound economic, social, political and cultural re-ordering which parallels these earlier shifts?
Continuing this theme, each of these two earlier phases saw the development of a distinctive sociological imagination, determined to find repertoires for ‘getting into the belly’ of the new social relations associated with the formation of these fundamentally new classes, unheralded and unknown to previous modes of thinking. Thus, during the later 19th and early 20th centuries, much classical sociology in the thinking of Marx and Weber sought to make sense of the implications of a large industrial working class. If one extends the range of vision still further to include the wider processes of urbanisation and atomisation associated with this process, then the sociological theorising of Durkheim, Simmel, Tönnies can be included in this pantheon too.
In more recent times, the rise of the professional and managerial middle classes played a key role in the emergence of ‘modern’ sociology. Influential thinkers such as C. Wright Mills, David Riesman, David Lockwood, Anthony Giddens, John Goldthorpe and Pierre Bourdieu all pondered the significance of middle class expansion for the social order of the later 20th century. More broadly, the dramatic expansion of science and technology studies, and the interest in expertise, culture, surveillance, and regulation associated with the Foucauldian and Bourdieusian traditions can also be seen as reflecting on these themes. In short, sociology has always been at its critical best when innovating energetically to uncover emerging social trends which associated with the emergence of fundamental social forces.
So as contemporary sociologists, do we need a new set of repertoires to make sense of the dramatic shift of wealth of recent decades? How do we explain the sheer wealth being amassed at the higher levels of the economic order? What theoretical and methodological resources are needed and what kinds of sociological sensitivity are now required that will exceed a simple moralistic denunciation which – however understandable it might be – is inadequate to grasp this challenge?
This issue of Discover Society offers a set of interventions around this theme. In the remainder of this article, I proffer a few ideas to allow a kind of ‘immanent critique’ of current social change. I address five fundamental issues here (a) the need to take money seriously and to question the specialisation of the social sciences which allows economists a monopoly of discussion on this topic; (b) a need to rethink class analysis to move away from simple categorical distinctions and which embrace a more fluid and relational perspective; (c) a preparedness to admit the value of new methodological repertoires for analysing the wealth elite; (d) a search for a language of social closure which goes beyond standard differentiation between achievement and ascription; and (e) a realisation of the close intersection between the social, temporal and spatial. In all of these areas, I will suggest, a study of wealth elites points towards a new kind of sociology more generally – one which is more fluid and alive to the resources we need to render the contemporary period adequately.
Money and the economic
Existing sociological repertoires examining the top reaches of the social structure continue to hark back to older status based models – of aristocracies, ‘old boys’ clubs’, and the like. Classical theories of elites, notably those in the Weberian tradition, shy away from the simple fact of their wealth and prefer to explore their link to power and command. We thus have a range of conceptual vocabularies ranging from a ‘ruling class’, a ‘power elite’, an ‘Establishment’ or ‘field of power’ which focus directly on the political characteristics at the higher reaches of the class structure. However, to be blunt, this won’t do. We need to take money itself more seriously if we are to sociologically register the significance of current shifts.
We need to place the neglect of money in the wider context of the specialisation of the social sciences over the past 50 years. Increasingly, the theoretical framings and methodological tools of economists, anthropologists, sociologists, and political scientists have become ever more distinct from one another. Whilst generally respectful of each other’s intellectual domains, there has been little effective cross-fertilisation between the concerns of each of these disciplines. Although lip service might still be paid to the Comteian vision of a unified social science, in practice it is difficult to know of what this might consist.
Part of the problem is that sociology, which used to act as a domain for inter-disciplinary dialogue within the social sciences as a whole, has itself become more specialised, becoming a more distinctive discipline in its own right. It is in this context that Piketty’s book is such an important intervention since he challenges the jurisdiction of economists as the monopoly experts on money, wealth and income and deliberately seeks to recover the project of an interdisciplinary perspective. The nature of money itself cannot be treated as incidental if we are to register the significance of the super wealthy. Piketty insists on this brute point again and again.
What has lain at the heart of the academic specialisation within the social sciences has been the preparedness of sociologists to let economists focus on money, rather than seeing it as one of their own central concerns. Within sociology, certainly, there has been a very limited engagement with money itself. Within the sociology of stratification and inequality, a standard move has been to see monetary and economic differences as the product of social inequalities defined around status or occupational class. Even recent debates on social mobility continue to pitch sociological perspectives (such as those by John Goldthorpe) focusing on mobility between classes defined by employment and occupation, against economists (such as Jo Blanden) who examine mobility between income groups. My aim is not to decry emphases on occupational class for certain purposes, but it is to argue that we need to take money itself more seriously as sociologists.
Since the time of Simmel’s classic work on The Philosophy of Money, sociologists have rarely said very much about money. This, however, is now changing within the field of economic sociology where writers such as Geoffrey Ingham or Viviana Zelizer have insisted on taking money seriously. Nigel Dodd’s new book on The Social Life of Money offers the most fundamental reassessment of sociological perspectives on money itself, and along the way marshals the thinking of a huge number of theorists – ranging from Nietzsche, Benjamin, Bataille, Derrida, Baudrillard and Deleuze – whose significance for theorising money has never been previously appreciated. The sociological challenge of the super-rich is precisely that they pose the stark significance of money in ways which require fuller and more explicit consideration.
How do we ‘name’ the super-wealthy?
This first point leads directly to a second: we currently lack a conceptual vocabulary for identifying and categorising this new super-wealthy formation. Do we simply use a term which registers the economic wealth of this group, such as ‘super-rich’? Over recent years, the most prominent term, popularised by the Occupy movement and by academic commentators such as Danny Dorling (see here), has been the ‘1 per cent’. This allows the very wealthy to be put directly in focus, but in fact, this apparently descriptive term comes with some serious problems.
It is easy to understand the appeal of the ‘1 per cent’ label. It identifies the super-rich as a small minority and thus facilitates a populist mobilisation in which the 99% can see themselves as sharing some kind of common cause against a small robber baron class (as with the ‘we are the 99%’ slogan credited to David Graeber and adopted by Occupy Wall Street). However, on closer reflection, the term is problematic. As Piketty argues, and as Hecht elaborates in her article here, the top ‘one percent’ is incredibly diverse, indeed more internally diverse than the rest of the 99% put together. It comprises multi-billionaires such as Bill Gates alongside affluent professionals earning £150,000 per year. It also conflates different sources of wealth: rentier income, fortunes from inheritance, extremely high earnings, and so forth. Can those who benefit from different sources usefully be seen in the same light? Piketty, for instance, is somewhat kinder towards those earning high incomes (which might be justified on the grounds of their extreme skill or capacity, as with Wayne Rooney for instance) rather than those who are simply reaping the passive rewards of rentier income for which they need no talent or work at all (see Andrew Sayer’s article here).
Finally, there is the problem that any social boundary defined around an economic cut off point is certain likely to be arbitrary. Why should a well-paid lawyer earning £130,000 be categorically differentiated from a colleague in the same firm earning £150,000?
What is at stake here is the conventional sociological approach of categorising classes as discrete and differentiated groups. Does such a perspective adequately allow us to address the complexities of wealth accumulation? Here Piketty’s work is analytically powerful. By focusing on processes of accumulation as central to the dynamics of the new wealth elite, he is able to move beyond a nominalist definition which puts people into clear, bounded groups. He is able to show that those who are extremely wealthy are, by virtue of this extreme wealth, able to accumulate proportionately more than others. But he is also able to show that economic accumulation and inheritance is significant amongst far more than the ‘one percent’, and that we therefore need to set our vision somewhat more expansively. For instance 10% or more in France can expect to inherit significant rewards during their lives. A similar point has been made for the British context by John Hills in his important recent evaluation of welfare and wealth.
However, such recognition does not mean that we should not use labels, or indeed evoke social groups – it is actually impossible to not do this. Rather, we might better be advised to recognise the provisional, contested and strategic value of deploying categories in social scientific research. It is in this spirit that my work with colleagues on the BBC’s Great British Class Survey used the term ‘elite’ to name the top class. It comprises around 6% of the UK population, and is distinguished by its sheer stocks of economic capital in comparison to other social classes. This term has been criticised because of its association with conceptual frameworks which insist that elites necessarily have political power. However, this criticism depends on an a priori model of what it means to be elite, which is problematic and can be avoided by using a term such as ‘wealth elites’. At the same time, this should not be taken to suggest that wealth elites are not politically efficacious. As Laurison’s forthcoming work will show, drawing on GBCS data, the super-wealthy are more politically connected and efficacious than even the affluent.
Where this leads is to the suggestion that processes of wealth accumulation should not be shrugged off as only specific to a very small group. Their wider significance to a greater proportion of the population needs to be recognised. Nonetheless, given that the Matthew effect (in which those who have most, gain more) is at work, we should not see this as part of a ‘trickle down’ process and we would prefer to use this recognition to insist on fundamental divisions between more and less advantaged members of the salaried professional and managerial middle classes. This observation chimes with much other work (such as discussed in my edited book with Tim Butler, Social Change and the Middle Classes) insisting on the need to differentiate within the middle classes more effectively than is possible by using categories such as the ‘service class’ or ‘salariat’.
New methods and data
Here I can be relatively brief as the issues are now well known. Wealthy elites cannot be easily studied by conventional social scientific tools such as ethnography, the sample survey, or the in-depth interview. They are relatively discreet and do not generally welcome the attention of social scientists. In this case, as an ‘outlier’ which cannot be easily captured by methods designed to generate a sociology of aggregate or ‘average’ groups, we need to innovate. But this is precisely the point, that any transformation of social relationship needs the elaboration of new methods. Earlier phases of sociological reflection on class formation generated its own distinctive methodological repertoires. Concerns about the significance of the working class went hand in hand with the early Victorian ‘statistical’ movements, and the development of census and mapping methods, which were concerned to delineate the location and nature of ‘dangerous populations’ of various kinds. The rise of the middle classes during the 20th century was associated with the development of the sample survey – which allowed systematic analysis of the relationship between different social classes so allowing the new middle classes to be placed in a wider context.
Piketty’s originality lies in his use of administrative, mainly taxation, data to render the fortunes of the very wealthy, and recent research by Tony Atkinson extends this repertoire further for the UK. This preparedness to innovate is important in the context of the debate to which I have contributed along with Roger Burrows on ‘The coming crisis of empirical sociology’ (see here). The Great British Class Survey, an unusual and unprecedented web survey, is a remarkable resource to examine elite formation. Geodemographic research also permits the kind of granular and detailed analysis of wealthy populations which is difficult to achieve through standard survey methods.
This is not to argue that older and more conventional methods are redundant or useless. Ethnographic research on elites, such as that by Shamus Khan or Luna Glucksberg can be highly fruitful. Having said this, it is telling that both are also associated with projects using big data to look at elites.
Ascription and achievement
Let me now turn to one of the fundamental issues posed by the rise of super-rich. Our older ways of examining elites as forms of status groups emphasises their ‘ascriptive’ character, and we are surrounded by concerns (such as those listed here and here) about declining rates of social mobility which focus strongly on barriers against upward mobility.
By contrast, others maintain that the wealthy are not simply a pre-defined, closed group and that it is possible for those born outside certain ‘charmed circles’ to gain entry into these ranks. And indeed, it is clearly evident in the work on super-wealthy elites that this class does not conform to any model of a cohesive and self-selecting body which does not admit outsiders. We also need to recognise that this is central to the self-belief and identity of members of these wealth elites who have a strong meritocratic ethos and belief in their own personal hard work and achievement.
Yet it is also amply clear that on any criteria, chances of entry into the wealthy are much improved by coming from selective backgrounds. A recent study of billionaires – using the kinds of innovative data sources I discussed above – shows that most of them have been to elite universities and that it is unusual for them to be upwardly mobile on a large scale (see this BBC story). Research from the GBCS demonstrates that the very wealthy are more likely to come from elite backgrounds than members of other social classes.
What these empirical points indicate is the need to move away from our characteristic sociological differentiation between ‘ascription’ and ‘achievement’ to find a more satisfactory way of elaborating how, whilst wealth elites are not closed in the way the old aristocratic order was, nonetheless they are massively predisposed towards existing privileged groups. The challenge here is to recognise how older forms of privilege are being remade even without formal barriers to entry.
We have some elements of this way of thinking in the work of sociologists such as Shamus Khan who has examined how elite cultures are changing by becoming more attuned to performative dimensions. Khan’s study of an elite private school argued that pupils were being steeped in a culture in which they learnt to navigate examination success and access to elite positions, without being formed into a culture of a closed elite which had characterised a previous generation of pupils. What this leads to is an interest in how ‘emerging’ forms of cultural capital – rather than just the older more highbrow forms analysed by Bourdieu in Distinction – might become more significant in the formation of new elite cadres.
Accumulation, space and the social
As I have discussed in my book, Identities and Social Change, sociological approaches typically lift class lift class categories out of their spatial and temporal contexts. This rendering of social relations as aggregates is problematic, and the challenge of wealth elites is to recognise that these dimensions are fundamental to their very constitution. Piketty’s emphasis on the accumulation of wealth over the long duree points to the need to understand the wealth elite as a long term formation in which mechanisms of accumulation, inheritance and exchange are fundamenta. Glucksberg’s article offers a direct example of this process.
We also need to recognise that spatial location is central to elite definition and identity. And here we see, most profoundly, the difference between aristocratic and landed elites – whose position is anchored in the countryside – and modern elites who are fundamentally located in ‘global cities’. This is a point which is once more underscored by Piketty’s study. In pre-industrial times, the main source of capital was agricultural land. The boom in the accumulation of capital since the 1950s has predominantly been based around capital tied up in housing. Given that housing equity is highly geographically sensitive, it follows that location is vital and that it is the large global cities which are central to the identities and activities of wealth elites. Whereas even a few years ago sociologists such as Castells or Bauman saw elites as globally transient and cosmopolitan, it is now clear that elites are fundamentally vested in location which is increasingly urban in character. This point is interestingly elaborated in the article by Andreotti et al.
Conclusion
In this article I have suggested that a new sociology of wealth elites is emerging to take stock of, and adequately comprehend, the scale of change which is associated with the dramatic rise of the super-rich over the past two decades. This is, at best, an emergent current, one which is still jostling with much older sociological perspectives. It is a provocation for readers to consider for themselves how far the radical changes associated with profound neo-liberal restructuring require us to refashion our tools of analysis. I have argued that this does not simply mean that we apply our existing sociological imagination to examine a new social class on conventional lines. Rather, I have suggested that the challenge is more powerful than this: it requires us to think sociologically about money, to challenge the specialisation of the social sciences, to question the differentiation of society from space and time, to elaborate and champion new methods and modes of analysis, and to develop a new understanding of social closure and mobility. These are tasks which need considerably more theoretical and methodological work. But as the articles included in this issue demonstrate, alongside the special issue of BJS on Piketty, we are nonetheless seeing a new willingness to rise to this challenge.
Mike Savage is Martin White Professor of Sociology and Head of the Department of Sociology at the LSE.