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The Great Sort and the Rise of Populism
Over the course of a generation, American politics has increasingly been shaped by a series of forces which are only now beginning to be understood. This phenomenon has created effects as divergent and seemingly disconnected from each other as the inflation of real estate prices in California’s Silicon Valley to the election of Donald Trump and the rise of populism. Trying to understand the underlying forces which animate these disparate occurrences requires traveling back in time to track both their origins and how they’ve progressed over time.
Let’s start in 1976 with Jimmy Carter winning the Presidential election with 50.1% of the popular vote. He does so with just 26.8% of counties voting for him with a margin in excess of 20%. After Carter’s inauguration in 1977, Steve Wozniak and Steve Jobs found the Apple Computer Corporation in April. Later that year, Paul Allen and Bill Gates found Microsoft. The median price of a home in the US is $33,000. The median price of a home in Cupertino, CA — where Apple will ultimately place its headquarters — is slightly higher, as California Real Estate tends to be.
I’ve picked this moment in time as a baseline. There was it seems, a much greater sense of interconnectedness between people throughout the country at the local level. The numbers bear this out. The still relatively small number of people who attended college mainly returned home and went to work, married a high school acquaintance (the even smaller number of women who attended college then practically guaranteed this) and lived their lives. People were far more likely to live next to a person of differing ideological persuasion or even a different income stratum.
Charles Murray discusses this phenomenon and how it came to be in his book Coming Apart. The forces that led to this change were only beginning to make their first appearance in 1976 — namely, the dawn of personal computers and other labor-saving devices which disproportionately benefited those with high IQs and advanced technical knowledge, which provided them the means to capitalize upon the coming boom in automation.
Fast forward to 1994. The Soviet Union lies dead, slain by its own hand. Bill Clinton is President, having won just a plurality in 1992’s three-way election due largely to a brushfire rebellion on the Right against George H.W. Bush. That fall, a landslide election happens, sweeping Republicans into control of both the House and Senate for the first time in living memory. Apple, meanwhile, is mired in a lawsuit against Microsoft for the theft of intellectual property regarding the Lisa operating system and languishes financially after several failed product launches. The median price of a home in the US is $130,000. Median housing prices in CA have begun to sharply diverge from the national mean however, closing in on $200,000. San Francisco’s prices are even higher; somewhere around $250,000.
1994 is one of the first very data points with a footprint large enough to see from the perspective of the national stage hinting at the underlying, large-scale changes that were happening behind the scenes. That change, of course, is a thing that demographers now identify as “The Big Sort” and its effects were many and varied. For starters, whereas prior to 1994 there was considerable ideological overlap between the parties, this election began in earnest the process of wiping out the ideologically marginal members of each party. Conservative Southern Democrats and Liberal Northern Republicans alike should probably recognize 1994 as the meteor that heralded their eventual extinction.
It’s hard to determine which came first in the chicken/egg problem of the parties’ subsequent ideological divergence. Did the parties’ centers begin to move away from each other first, which led to the defeat of their moderates or did the defeat of the moderates allow the parties to separate? But what is certain is that by the time that George W. Bush was elected in 2000, the number of counties that he won by >20% was 45.3%, in comparison to Carter’s 26.8% in 1976. Polarization seemingly created its own demographic weather, reinforcing and accelerating itself in some fashion.
What’s more likely however is that The Big Sort was beginning to cluster like-minded people more closely than ever with other people who reflected their own opinions and beliefs. But the Sort’s work was only beginning, and ideology wasn’t the only axis upon which these forces were operating.
Fast forward to 2016. Donald Trump wins the Presidency (barely) with an even greater number of highly polarized counties than President Bush. Apple, Google, Microsoft, and Amazon are now four out of the top five largest American companies by market capitalization. Exxon-Mobil, formerly the globe-bestriding titan is practically a dwarf all the way down at number 6. Median Home Price in the US is $315,000. Meanwhile, Median Home price in Cupertino is $1.7 Million, five or six times the national median, driven mostly by a combination of restrictive land-use regulations, huge demand, and gobs of tech money.
But the election of 2016 turned out very differently from 1994 in both tone and result — as different in some ways as the housing prices from 1976 compared with today. The leader of the Republicans 23 years ago was Newt Gingrich, whose Contract with America electrified the nation and ultimately dragged an entire presidency to the right. Riding the crest of a clear ideological wave, the Republicans promised a popular but by no means easy-to-accomplish set of policy goals — and then found the political will to execute them. Contrast this with the election of 2016, where ideology took a backseat to sloganeering, personal insults, and grievance-mongering, with very little focus on specific policies that would produce measurable outcomes. What had changed so dramatically in the intervening 22 years?
The Big Sort, whose existence became obvious in 1994, didn’t stop but continued apace, taking the form of further dividing the country, not merely along ideological cleavages, but along lines of “urban and rural” and even “educated versus not.”
2016’s outcome is where we see its most recent manifestation: the rise of populism. But how did it take us from the previous political order and lead us to where we are today? Its effects on politics are reflected in what’s happened in places like Cupertino and replicated in a variety of locations across the country. The Sort, which delivered such staggering political victories to the right in the ’90s was, it seems, always doing one other thing with particular and ruthless efficiency: skimming the the highest echelon of cognitively elite students from the across the country, and then transplanting them to one of the various technological powerhouse locations in the nation with the promise of earning extraordinary salaries. In the past, the high school valedictorian in Spokane, WA or some other mid-sized city would attend college and return home to work at a local company or begin their own business.
Now, they go to work at Apple.
With a market value value of $700 billion, Apple has a very different set of requirements for employment than GM or Ford did in 1976, with a gaggle of job descriptions straight out of that earlier era’s science fiction. The pay is even more fantastical. With Apple-like companies occupying four out of the top five slots of the nation’s most valuable corporations and those companies’ headquarters being in Cupertino and Santa Clara, CA and Redmond and Seattle, WA, respectively, there’s precious little an average person in Pine Bluff, AR will have in common with people in those spheres, either culturally or intellectually.
The effect that this has had upon rural America has turned out to be nothing short of catastrophic; as institutions of higher learning (aided by national standardized testing systems geared towards finding such talent) systematically denuded rural areas of most of its best and brightest, those areas of the country have been left barren and devoid of their most intelligent and entrepreneurial residents.
This “brain drain” is precisely what is speculated about by Philip Auerswold on Russ Roberts’ recent episode of EconTalk — which explains why there has been explosive growth in the value of real estate in Cupertino and its other, tech-driven urban enclaves, while Americans in rural areas increasingly struggle to make ends meet. The rise of the opioid epidemic and the sense of hopelessness that precipitated it are mere reactions to the destruction of the previous order at the hands of this impersonal force.
This in turn explains the rise of populism. Populism is a reaction is not solely due to the fact that some people are making immense sums of money; indeed, Americans have always had remarkable tolerance for and even invited inequality, considering it to be a feature, not a bug. What’s different now is that unlike in the past, where the immense wealth wrought by new technology was a harbinger of a tide that would lift all boats, this newest iteration of the Gilded Age doesn’t seem to have egalitarian powers of vitalization. On the contrary, this revolution has had the paradoxical effect of destroying many of the jobs and occupations upon which the less cognitively able once relied to provide themselves with a chance at a better life.
Toss in a dose of these newly wealthy urbanites scoffing at and scolding their rural neighbors for being poor — or worse, poor racists and bigots of every stripe — from the heights of the popular culture, and you have a recipe for backlash spelled with a capital “T.”
History it seems, is not without a sense of irony. If you ask most Americans whether people basically get what they earn in this country, the answer is likely to be “yes.” In some sense, the class of cognitive elites who inhabit the Googles and Apples of the world are simply riding the meritocratic wave. Having educated themselves, built up their human capital and created products and services that people in 1976 didn’t even know they wanted, they’re now reaping the rewards of having changed the world in the well-worn fashion of previous American entrepreneurs and companies.
But the new, populist consensus has awoken the nation to the reality of what meritocracy can create, and discovered that all of its fruits aren’t sweet.
Published in Economics
Is it particularly different than the Industrial Revolution’s drain on the countryside? Not that that wasn’t deeply painful.
I think it is. During the Industrial Revolution you had a transition from 70% of people living in the countryside on subsistence farms, to many of those people moving to cities. It wasn’t as if they were doing that because they were worse off than they previously were – they could always have gone back to the countryside and picked the plow back up, after all – but because they ended up better off than they were in the first place.
Clearly, people experienced inter-generational improvement in their quality of life.
Here, you can’t merely be a cog in a factory and expect to improve your lot in life. Such positions don’t exist anymore, and unless you’re a college graduate with serious STEM cred, moving to a city and joining Google isn’t on the menu either.
I just don’t think this gets at all to a plausible explanation for the rise of populism. It isn’t about Silicon Valley. It’s about Washington. It’s about the very fact that Washington isn’t a meritocracy. Extremely incompetent people can be paid large amounts of money for doing enormously damaging things to the country because they have the force of laws and guns to extract money out of the rest of the country. And they are all busy scratching each other’s backs, hopping from job to think tank, to media. It’s not rural Americans addicted to opioids who are populists – they’re too stoned to be anything. That’s one of the convenient myths to write off those who are populists. Typical kind of stuff Kevin Williamson or David French would trot out. And it is nonsense.
The cherry picking of the best and the brightest is not new. They usually didn’t come from rural America to begin with. Or small towns. They usually came from suburban areas. That’s where the good school systems have been. Not in small town America. The high school movement has been dead for decades and decades (unfortunately).
The real estate value thing isn’t new. There have always been pockets where real estate values were astronomical and it had to do with economic opportunities in those areas.
Those two elements as an explanation in explaining the rise of populism just don’t work.
Addition in bold italics. Google is not going to risk hiring another James Damore, and has probably already adjusted its (their?) hiring screening procedures.
I think you’re right about this in one respect and wrong in another.
Where I think you’re right is that the rise of this sort of regional inequality has happened right alongside the rise of populism. Disentangling the correlation from the causation is probably going to be tricky.
Where I think you’re wrong is that what’s going on in Washington is a an effect and not a cause. The currents that I’m talking about here have nothing at all to do with policies created in the Capitol. But what has happened with populism is that people are appealing to Washington to redress their grievances.
This in my opinion places the cart in front of the horse. To listen to Andrew Breitbart, politics is downstream of culture, so the stuff that happens in Washington is a reaction, not necessarily an action.
Remember when the Justice Department sued Microsoft for bundling Internet Explorer with Windows because they were a “monopoly power”? Me too. Good times…
At any rate, Google will destroy itself if they pursue that sort of single-minded, disinclusive policy. I say: let them. I don’t agree with the policy, but I would support their freedom of association to do it, stupid though it is.
As an engineer, I find people care more about my abilities than my opinions. I would recommend they follow the same policy.
Hear, hear!
This is a good post and a fine discussion from all sides, Ricochet at its best. Even the comments I don’t agree with are so damn thoughtful they have me reconsidering ideas that seemed fixed.
Costs are so high in Silicon Valley it is surprising that more competition hasn’t arisen in lower cost locales. You have seen some, but it has generally not been in the consumer IT space, but more in the defense and industrial technology space. One of the issues with software in particular is that the marginal cost of production is extremely low, so a strategy of trying to hire only the Pareto 20% at crazy wages still generates ungodly profits. Even with the invention of the assembly line there were still significant raw material input costs.
However, I am starting to see cracks in the Apple and Google dominance. In particular, their big foray into autonomous vehicles is likely to be their undoing.
I disagree with Breitbart about this. It is in a feedback loop. There is no upstream and downstream.
I think the “truth” lies somewhere in between both of your comments. I certainly think that people are looking to Washington to solve whatever grievances they may have, but is it not Washington that has held itself out as the elixir to all grievances? I mean the whole span of US history from the Civil War forward has been, at its essence, a steady march from one righteous cause to the next. I think what we are seeing is the last holdouts of not wanting to get caught up in looking to Washington this way breaking down and jumping on the bandwagon.
On the other side of this coin, though, is the reaction to the Information Revolution (since the Industrial Revolution is pretty much dead). When the economy became dependent on miniaturizing computing power and harnessing that power to multiple machine processes, it was a foregone conclusion that the numbers of people required to do the same tasks was going to diminish over time. Think about those videos of people putting Model Ts together vs a video of vehicle assembly today. You hardly see a person in the modern assembly process. Much of this began in the mid-70s, as MJ has pinpointed. Another thing that occurred then was rapid spread of personal credit via credit cards to the middle and even lower classes. Easy credit to supplement the loss in wages that was anticipated due to the changing economy.
I am tempted to say that most people adjusted and adapted to the changes, while some didn’t. But considering the consumer debt, the plight of small town America, and the statistics handed to us by Charles Murray, I am not so sure the disease isn’t terminal now. Populism hardly describes it. This seems more like the death rattle of the US as the sole major power. I suggest looking to our cousins across the Atlantic as a warning.
In antitrust parlance that is called “tying” not “bundling.” We are going over that case right now actually in my antitrust class.
No it isn’t. And at the time no one saw or felt the fruits of the economic gains, and people complained about the inequality and robber barons. Which is why there were pushes for the creation of the welfare state, and numerous populist politicians by the end. That is what we will see today with this, because the wealth generated is sufficient to allow for some redistribution to purchase social harmony. Then the old and dislocated will die off and the newer generation will be better adapted to the environment they find themselves in and we will have another period of stability until the next big economic revolution.
The biggest difference is that today you can more easily publicize the drain on the rural economy and its negative consequences, whereas in the past there was just less ability to do this.
Here is a philosophical question: What if there is not a “next big economic revolution”? I like using the time traveling man as an example for this concern. If you take a person from, say, 1870 and transport him to 1955 he is going to be blown away by the technological advancement. Transcontinental flight, television, radio, telephone, instant photography, automobiles, computers. Now if you took a man from 1955 and put him in today’s world, there isn’t much that he is not going to be familiar with. Sure things have gotten smaller and faster, but on the whole the inventions are basically the same: planes, autos, computers, etc. Hell in one regard computers, photography, and telephones have been melded into one item now. But there really isn’t anything out of this world new. So what comes next?
Maj,
If you can remember the moment in time you are talking about clearly there was much more to what was happening than just the rise of tech. Jimmy Carter was the first hyper-regulatory environmentalist President. Stagflation was the name given to the economy. Carter himself referred to it as a “malaise”. It was always obvious to me as Carter was regulating and taxing the economy to stagnation that Carter himself was the malaise and the election of Ronald Reagan proved this. One interesting fact that has been overlooked is that this was also the first instance of the 30-year mortgage. Mortgages were 20-year at very steady low interest rates. Now in a high-interest rate economy, 30-year mortgages were being pushed as an opportunity. Considering that one wouldn’t gain any equity for the first 10 years this was absurd. Prices were already inflated and weren’t going up. Renting the house would have been a much wiser move as the owner would have been responsible for the maintenance.
Carter established the precedent of exploiting and lying to the middle class inventing economic fantasies that weren’t in their interest. Meanwhile, all was justified behind the super lie of environmentalism. The tax rate had multiple small increments that meant at a high inflation rate you were continuously being ramped into a higher bracket.
This was the first time flyover country really had a government that intended to fly over it.
Regards,
Jim
I don’t know, but I don’t have to know, because no one sitting in 1870 predicted the world of 1970. The market and humans will adapt. I would like to think the next big thing is space. Wouldn’t it be nice to have a frontier again? If like me you see markets and society as emergent phenomenon then you see that you can’t predict the nature of the emergent state from its constitutive parts.
I also think you are to down on modernity, and take the technology we have too much for granted. How useful is it to the common man to see transcontinental flight if they could never afford it as was the case in the 1950s? Today the average American can afford to fly to Europe or any American destination, that is a big deal.
What about the ability to carry a whole public library’s worth of books on a kindle reader? Why is that not impressive? Because he already had books? How about being able to talk for free via live video with a relative on another continent? Why do we short change Skype because they had telephones in 1955? My grandmother was able to see and talk to her great grandchildren live on Skype from Bucharest Romania to Lancaster Pennsylvania. How is that not freaking amazing? I recall back in just the 90’s that we would call Romania once a week for about 10 minutes because it was like a 20 dollar phone call. Now it is free, and there is video! In 1950 could you even make a call to Romania from your home? How much would that cost you?
If I had to put down money, I’d bet on genetic technology and the resultant revolution in medicine and a long-term change in what it means to be human. Robots is also a good bet, but I regard that as a long-term effect of the IT revolution.
That is a whole new spin on things Val. You are correct that these things are huge in terms of time and space contraction. But I would say that because of familiarity with television, the prospect of broadcasting video via SATCOM isn’t too much removed from long-haul broadcasting video over the air. The cost aspect is an interesting twist though. There is no doubt that our technological advancement has made our “creature comforts” less expensive, but I don’t know if this would qualify as new to our time traveler. In my estimation it is far more of a shock to go from having to go outside to address your toiletry issues to all of a sudden being able to do all those things inside than it is to be able to cheaply make a video call over continents. The reason is because our time traveler would be familiar with the concepts leading up to the advance.
@RobertMcReynolds – most of the earlier changes you mention – including the outdoors trip to the small house – are physical in nature: how we move, prepare food, etc. The changes of the 1960s to now are more in the mental/virtual domain – how we learn, entertain ourselves, do ‘work’. Which has more influence on society and the economy now – the physical or mental? What is the trend?
Yeah I was thinking about that after I posted my comment. I am not sure where I would put those things in terms of our time traveler’s experience. I mean would exposure to such concepts via Sci-Fi be sufficient to diminish the amazement at being introduced to them? I think part of what I am getting at is that in the late 19th Century there was a seemingly overnight change from how we lived before the Age of Wonderment to after. In-door plumbing, in-door lighting/electricity, flying, automobiles, telephone, Nicklodeans, phonographs, radio, refrigeration, all of these things completely changed how we lived. And how we lived after that change has not really changed at all. Things are faster, smaller, less expensive, but the foundational shift in how we lived before 1890 and how we lived after has not replicated itself. We are still living in large part exactly how we lived in 1920 or even 1910 to some degree.
Yeah that is true. I don’t know the answer to your question though. I mean it would appear that the trend is to the mental, but some part of me thinks that many people have some sort of instinctual desire to not let go of the physical. I will give this as an example:
https://www.theguardian.com/commentisfree/2016/may/13/books-ebook-publishers-paper
Oh, I disagree about that entirely. To just pick one aspect, the sort of foods that we eat today are incredible in both variety and quality in comparison to what people used to consume regularly. Just look at Lileks’s Gallery of Regrettable foods for some of the culinary horrors from the 50’s and 60’s that were proposed as or considered to be popular dishes.
We’ve come a long way in terms of how quickly we distribute food, the sort of quick prep food we have and especially when we cook full meals. It’s worlds apart.
Indoor plumbing is not a great example because that is quite an old invention in fact it predates Christianity. But I get your point. Still the computer is a vast change from the 1950’s. How many people in the 50’s knew about computers? Or had seen one in person. There were adding machines but in the 50’s you still had human calculators doing the math for NASA. Now imagine you show some one from the fifties your 4G Samsung 8+ phone. And you say. Ask it a question, and bam! in a second they have fifty articles addressing their concern on the screen to be read at their pleasure drawn from thin air. Alexa why are we not impressed? This is a change in kind not just scale. I think you are under valuing the access to information in favor of brute mechanical strength. Sure being able to move a super sonic speeds is flashy. But to what end? So much of human activity is about collecting information. You walk around from shop to shop to see the best deal, you can now drive around to see even more deals, now you can search the whole planet from your couch without putting on your pants and have it delivered to you.
I know for instance that if you were a biologist in the 1950’s what biologist can do today in their own lab for a pittance of dollars would knock you off your feet. This is not something seen by the public at large but it is working actively behind the scenes to improve our medicine, agriculture, and health care every day.
I think the issue is this the great revolution of the industrial age was our ability to augment our physical atributes, speed, strength, etc. through the use and miniaturization of motors. We went from a world of human power to one where everyone had 1000’s of horses worth of power at their finger tips. Today we are witnessing a scaling of brain power. The end I think will be to go beyond the simple power of one human brain. With information technology we can already store accurately more information than most people can, and recall it back perfectly. It used to be only savants could do that.
So we are going from augmenting our physical strengths to augmenting our mental strengths? Again, this puts a new spin on things. Maybe our advancements in augmenting the physical have played out, but we are just now in the opening phases of augmenting our mental strengths.
Having read Val’s spin on this, I will modify my assertion to say that in large part, our physical lives are really no different than it was in the 1920s, but our ability to consume and store information is vastly different.
My trepidation in the food example is that I am sure that the food in 1950 was better than it was in 1900 or 1850. An example might be rations for soldiers in the Civil War versus rations for soldiers in Korea. Which one do you think you want?
I just listened to the econ talk episode you mention. Fascinating. I agree with Roberts that it’s rapid change and with both that there’s a lot of over-regulaton at the center but the young economist is really bright and deep into his subject and definitely worth listening to, several times. Sparks fly off his intellectual energy that even challenge the brilliant and sober Russ Roberts.
For me the miracle decade seems to be the 1830s. Photography, the telegraph, and railroads would be miracle technologies to any earlier age, and just about unthinkable as recently as, say, the Revolutionary War.
I read “The Summer of Beer and Whiskey” about the baseball season of 1883, and the world then compared to today might be called “one third modern”. It had instant communications (and was just beginning to telephone), a dense network of railways, big cities, newspapers, hotels, and overnight milk deliveries. But it was, well, 1883.
“1948”, about that year’s presidential election, describes a world that’s two thirds modern: airliners, highways, radio, television.
Where do the dividing lines fall? We all have an intuitive feeling about that, and they probably don’t differ all that much.
I think that is the case, at least if you want to be optimistic about it. The limits of physical augmentation have in many ways been reached. You can only travel so fast before you start suffering too much stress on the body. A combustion engine can only be so efficient, and you can only over come so much air resistance and friction. Now it is all about refining the process so it is cheaper and more available to all. This though took us well over a century.
Computerization of society is now only about 30 years old. In many ways we are like the first people seeing a steam locomotive and power loom. We have no idea what it could and will lead to. Though we may live to see it for ourselves. Just imagine this if you were born in 1848 at the age of 60 you had heard of the Wright brothers and if you lived to be 80 you would have heard about planes used in combat.
Toss in a dose of these newly wealthy urbanites scoffing at and scolding their rural neighbors for being poor — or worse, poor racists and bigots of every stripe — from the heights of the popular culture, and you have a recipe for backlash spelled with a capital “T.”
Bitter clingers, in other words. I think this is critical to the divides in the culture today: one group makes no pretense of its distaste for the Lower Orders, and judges them for lacking obedience to the cultural signifiers of the Upper Order. They don’t eat organic. They don’t care about whether the cotton in their shirts was grown sustainably. They don’t care about their carbon footprint. They haven’t read that piece in the New Yorker everyone’s reading.
Ssince the Upper Order has no coherent moral framework, it finds conspicuous signifiers that infuse consumption with virtue,. They declare themselves Moral because the words “Fair Trade” appear on their bags of coffee.