JUDY WOODRUFF: Now a look at a group that
one writer is dubbing a new American aristocracy and the problems it poses for our society. No, it's not the billionaires in the top 0.1
percent of the population, but the group that sits right below them, the 9.9 percent. Our economics correspondent, Paul Solman,
has more. It's part of our weekly series Making Sense,
which airs Thursdays on the "NewsHour." MATTHEW STEWART, Author/Philosopher: The United
States is going down a path. It's a path of class stratification, growing
inequality. And the consequences of that are more potentially
damaging than I think most people appreciate. PAUL SOLMAN: In a provocative "Atlantic" magazine
cover story, "The Birth of a New Aristocracy," author and philosopher Matthew Stewart argues
that growing class division is destabilizing our society. MATTHEW STEWART: All right, so it turns out
that the concentration of wealth in the United States has really been focused on the top
0.1 percent, not the top 1 percent. But that doesn't mean that everybody below
them lost money. In fact, only the bottom 90 percent did. So there's this group in between, the 9.9
percent, that have managed to keep pace. They play a very important role in on the
one hand positively running the economy, on the other hand basically setting up barriers
that prevent people from below to realize the American dream. PAUL SOLMAN: So how much wealth do the people
in the 9.9 percent have? MATTHEW STEWART: Right now, you need roughly
$1.2 million to make it into the 9.9 percent. And the median is around $2.4 million. PAUL SOLMAN: Net worth, this is? MATTHEW STEWART: Yes, I'm sorry. This is all net worth. And it includes all forms of assets. So that would include homes. In the numbers I have seen, it also includes
things like cars. It's very important to understand that our
wealth is not just financial. We -- in the 9.9 percent, we all enjoy better
health. We tend to live in better neighborhoods, which
means we have less crime to deal with. We have better education. So, all of these non-financial forms of wealth
turn out to be critical. They don't only make us basically able to
generate more economic wealth, but they also consolidate our position. We can then pass them down to our kids. PAUL SOLMAN: It's obviously not good for people
who are stuck below, but your argument is, it's not good for people who are lucky enough
to be above. MATTHEW STEWART: Yes, that's right, because,
as the classes pull apart, the people on the upper strata have to work harder to keep their
position. They have farther to fall if they make a mistake. So they invest more in preserving their position. And I don't think we have appreciated how
that ramifies throughout society, the way it locks them in place, draws battle lines,
creates distrust. PAUL SOLMAN: And what's driving this? MATTHEW STEWART: The basic driver is something
that we're all familiar with. We all know the story of rising inequality. It creates a kind of rigidity, an instability. It also removes fact and reason from our discussions,
that we're not able to have a meaningful basis for discussion among all Americans. Inequality feeds on itself to some degree. So the greater the concentration of wealth,
the more that the people with that wealth can use it to consolidate their position by
investing it in non-financial forms of wealth. PAUL SOLMAN: I have heard this referred to
as transactional capital now. MATTHEW STEWART: It can also be just physiological
capital in a certain sense. So it turns out that not only are the wealthier
getting healthier, but the people in the lower deciles are actually getting less healthy
in many respects. So, for example, for white, middle-aged people
with high school education and less, life expectancy has gone down. PAUL SOLMAN: Part of what's driving this is
something that you and others call assortative mating. MATTHEW STEWART: So, assortative mating is
just when like marries like. In the past 50 years, we have seen a significant
increase in this kind of marriage pattern. There are some studies that suggest that as
much as a third of the growth in concentration of wealth is due to decisions connected with
mating, essentially. PAUL SOLMAN: Just like in the olden days,
noble families, kings, queens, they would intermarry to consolidate their power or their
wealth. MATTHEW STEWART: Well, it reminds me of Jane
Austen, to be honest, because we are returning to a world in which individuals seeking mates
are frankly frantic. They can't find true love in someone who is
of the adequate social status. The benefit that you get from matching social
status is tremendous, and the price you pay for failing to do that, for failing to find
a high-status mate has gone up. It's gone up dramatically. If you're low-status and you marry a low-status
mate, marriage is actually harder. It's harder because you're working harder
probably, or you have greater risks, greater stresses. You have worse health. And, consequently, you, statistically, are
much less likely to have a stable household. PAUL SOLMAN: So, what do you want the 9.9
percent to do? MATTHEW STEWART: We have to start thinking
about how we can live in integrated communities that are open to everybody, where geography
is not an economic and class barrier. Our geography is killing us. We are setting up a system where we concentrate
educational resources, the schools in a particular area. We concentrate economic power. PAUL SOLMAN: That's why people move to areas
like where you live, Brookline, Massachusetts, which has this great educational system, right? MATTHEW STEWART: Yes. It's great. We have a quasi-private system of education
that we call public. Right? I move to Brookline, I send my kids to public
schools, they're terrific schools. That's why you move there. And you can too. You just have to buy a home that's worth $2
million. Now, that's a colossal, colossal blunder. In American history, public education was
absolutely essential in building the middle class. That's how we got the productive economy in
which everyone participates, and we had a reasonable degree of stability. We're now setting up a system where we -- you
get the education you pay for. And that means you get a bunch of citizens
who are uneducated. And that's a recipe for disaster. PAUL SOLMAN: I think that's what's so difficult
for somebody like myself to hear or people in our audience. What we're doing is what comes absolutely
naturally to us, that is, investing in our kids, moving to a neighborhood with a good
school for our children or grandchildren. You don't want me to stop doing that, right? MATTHEW STEWART: Just because our individual
actions are blameless when we look at them very narrowly, that doesn't mean it's all
going to work out for the best. I lived in Mexico, I lived in the U.K. for
a number of years. I have seen versions of this process going
on. Everybody involved is nice. But at the end of the day, they participate
in this thing that leads you to a point where you have got a distinct class of wonderful
people that a lot of other people are very unhappy with. PAUL SOLMAN: And the people in that distinct
class, at least in places like Mexico, they have actual gunmen in their big, fancy houses. Right? MATTHEW STEWART: Right. And there's a natural progression from gated
communities to armed and gated communities. And we're sort of working through that now. And if we keep going down this path, yes,
we will have the armed and gated communities. And none of us will have done anything wrong. But that's where we will be. PAUL SOLMAN: For the "PBS NewsHour," this
is economics correspondent Paul Solman outside Boston.
