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The 9.9 Percent

The New Aristocracy That Is Entrenching Inequality and Warping Our Culture

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A scorching, trenchant, analysis of how the wealthiest group in American society is making life miserable for everyone—including themselves.

In 21st century America, the top 0.1% of the wealth distribution have walked away with the big prizes even while the bottom 90% have lost ground. What’s left of the American Dream has taken refuge in the 9.9% that lies just below the tip of extreme wealth. Collectively, the members of this group control more than half of the wealth in the country—and they are doing whatever it takes to hang on to their piece of the action in an increasingly unjust system.

They log insane hours at the office and then turn their leisure time into an excuse for more career-building, even as they rely on an underpaid servant class to power their economic success and satisfy their personal needs. They have segregated themselves into zip codes designed to exclude as many people as possible. They have made fitness a national obsession even as swaths of the population lose healthcare and grow sicker. They have created an unprecedented demand for admission to elite schools and helped to fuel the dramatic cost of higher education. They channel their political energy into symbolic conflicts over identity in order to avoid acknowledging the economic roots of their privilege. And they have created an ethos of “merit” to justify their advantages. They are all around us. In fact, they are us—or what we are supposed to want to be.

In The 9.9 Percent, Matthew Stewart argues that a new aristocracy is emerging in American society and it is repeating the mistakes of history. It is entrenching inequality, warping our culture, eroding democracy, and transforming an abundant economy into a source of misery. He calls for a regrounding of American culture and politics on a foundation closer to the original promise of America.

Chapter 1: Who We Are — 1 — Who We Are
When you are young, the past seems very far away, and maybe a little comical. That’s the way my grandparents looked to me when I was a child. With his slicked-back hair, tortoiseshell glasses, and bright red trousers pulled way up high, Grandfather would greet us like he had stepped out of the first color movie ever made. Grandmother usually showed up in oversized jewelry that she invested with many superstitious meanings, drawling like a slightly campy southern belle. They lived in country clubs, as far as I could tell, mostly on the island of Palm Beach, and those clubs seemed like antique amusement parks to me. There was endless French toast, card games that lasted all day, and lots of funny rules, most of them involving what to wear and when not to speak.

Once or twice a year, usually around Christmas or the Fourth of July, the family would gather around tables piled high with chilled shrimp and cheesecake, and, in between puffs on his cigar, Grandfather would unwind long stories with enough loose ends to fill a bowl of spaghetti. At around the age of eleven or twelve, I learned that we owed our holiday bounty to Great-Grandfather, Colonel Robert W. Stewart, a onetime Rough Rider with Teddy Roosevelt who made a great big pile of money in the oil business.1 I gathered that we were very lucky to come from such a distinguished family. Our roots—and my own middle name!—went all the way back to William Stewart, a lieutenant in the Continental Army who was seated at the right hand of George Washington.

As I entered my teenage years, the comedy of our holidays in grandparent-land slowly ripened into farce. The pomp of our clubroom luncheons began to feel tedious and even ridiculous, like an interminable birthday party for people whose main accomplishment was just showing up in life. One day, at the age of thirteen, I was rushed to an unctuous tailor to be fitted in time for the dedication of a gold-plated bicentennial eagle on which Grandfather had lavished some of his evaporating inheritance. I remember getting the distinct impression that I had become a prop in a ludicrous costume drama. I inspected that cartoonish bird of prey closely and imagined that it must have been stuffed with papier-mâché on the inside. It struck me that my grandparents wouldn’t know papier-mâché if it showed up across from them at the dinner table. They had no clue what life was like off the island.

My actual home was the militantly middle-class world of United States Marine Corps bases and suburban public high schools. I saw myself as a proud member of the Space Age. The present was a rocket ship to the future, and we weren’t going to get there by inhaling the last fumes of some bygone way of life. I didn’t believe in inheriting your money (a good thing, given the grandparents’ spending habits), or in dedicating your life to joining clubs that excluded the greatest number of people, or in hiding from the world on some fantasy island. I believed in grades, test scores, new gadgets, working for what you have, and playing to win in pickup basketball. I was an eager representative of a generation that put its faith in all those things that we now call “merit.” I was more or less committed to a form of life that I will call, for reasons I explain in this chapter, “the 9.9 percent.”

SOME YEARS AGO, however, I began to feel that the past was catching up with the present, like a familiar face approaching unexpectedly over the shoulder. Maybe it started when I found myself in the fray of parents scrambling for spots at city preschools that, on second thought, seemed more exclusive than any of the old country clubs and no less self-satisfied. Maybe it was the way that buying a bag of mixed greens at the grocery store had come to seem like an act of class warfare, or the vague awareness that there was a category of vacation resort so special that I didn’t even know about its existence. Or maybe it was just the odd sense that snuck up on me during pleasant conversations in my favorite coastal enclaves, chatting about fitness options and real estate opportunities as if the rest of the world simply did not exist, that an old and insular form of life had come back, except that now it was sipping vegetable smoothies and wearing brightly colored, sweat-wicking spandex. It felt as if I had stepped out of that rocket ship to the future and found myself a few blocks down the road, stumbling around some alternate version of the past. We’ve been here before, I thought—only this time, I am part of the problem.

This uncanny feeling of déjà vu, I think, will be familiar to many people who have very different family stories, not at all like my own. Really, it can happen to anyone who has tried to relax in recent years with a good history book. Time was when the chronicles of ancient Rome, China, or Mesopotamia would offer escape from the present. No more. The holiday from history is over. These days, you’ll get to the end of a learned tome on the rise of fascism and realize that several chapters remain to be written. You’ll read about the “lost cause” of the Confederacy and wonder when they will finally give up. You’ll consult George Orwell’s 1984, not to speculate about the future, but to analyze the latest pronouncements from on high. Or you’ll thumb through an old novel about the fading American dream, like The Great Gatsby, and wonder which one of the characters is you. The so-called arc of the moral universe seems to have acquired a dark sense of humor.

It’s usually best to imagine that we create our own circumstances in life. But it is often more accurate to say that our circumstances create us. In retrospect, the small dramas of my family story look like a spotty commentary on forces that remain mostly out of view. The same is true for the form of life that I aspired to join, or so I tend to think. The closest thing to a defining attribute of the way of thinking that now dominates American life is our lack of awareness of the causes that brought us to the present state and of the ancient patterns we thoughtlessly retrace in our lives. To an unexpected degree, we are living in the past. We just don’t know it.

In this book, I argue that those forces which have set us rowing backward into the past can be explained mostly in terms of a single fact: the rapid rise in economic inequality over the past half century. At the same time, I contend that language in which we talk about this fact has come to obscure the reality. In particular, we systematically overlook the way in which inequality reaches into our own thoughts and desires and so involves us all. In this chapter—spoiler alert—I lay out all of the main lines of the argument in the book. The evidence in support of that argument will have to wait for subsequent chapters. My aim here is to supply some of the intuitions out of which the argument evolved. The family memories are idiosyncratic, I grant, but the experiences they represent are now close to universal, or so I believe.

WHEN YOU ARE NOT RICH, you are quite sure you know what it would feel like to be rich. Once you become rich, you are not so sure. You come to see that there are many people much richer than you, and you can’t help but wonder what it would be like to be them. This was one of the thoughts I picked up from Grandfather, rather indirectly, when he complained, as he often did, of the monstrous injustice of the estate tax.

The government, I learned early, taxed away three quarters of the Colonel’s fortune upon his death. The remaining quarter was divided among four siblings. Thus, the Colonel at death must have been worth an impressive sixteen times more than Grandfather at his peak, or so I calculated with my sixth-grade math skills. I thought this might explain some of the deference—or was it fear?—that crept around the edges of Grandfather’s voice when the subject turned to the Colonel. I wondered if it also explained the occasional outbursts of hostility that Grandfather directed at the Rockefellers. They must have been worth sixteen times more than the Colonel, or maybe much more.

I never quite got all the numbers down, but then again, I realized that the perceptions of wealth that organized my grandparents’ lives were not all that reliable either. On the one hand, they lived in a world that was transparently ordered by money, with all of the poor people out on the mainland, all of the rich people on the island, and the richest people in the biggest houses on the island. On the other hand, the exact relationship between house size and wealth was always measured in imprecise terms. And, having spent some time across the water in West Palm Beach on the way in, I got the sense that it was not actually a pestilent wasteland.

What stayed with me, in any event, was this Russian-doll experience of not quite knowing when you will finally arrive at the innermost sanctum of wealth. An unequal world, according to the usual way of thinking, is one that is angrily divided between the rich and the poor. But in reality, it may also be one that is united in the universal awareness that there is always someone richer than you—a lot richer. And sometimes it isn’t the actual wealth but the impressions of wealth that determine where you will end up. These simple intuitions seem worth bearing in mind as we turn to the extraordinary increase in economic inequality in the United States over the past half century.

THE STORY OF RISING ECONOMIC Inequality is by now so familiar that it fits easily onto a T-shirt. But the way the story is told is often imprecise enough to leave out much of the plot. “We are the 99 percent” sounds righteous enough, but it’s a slogan, not an analysis. It suggests that the whole issue is about “them,” a tiny group of crazy rich people, who are nothing at all like “us.” But that’s not how inequality has ever worked. You can glimpse the outlines of the problem if you take a closer look at the math of inequality.

Supposing we stick for the moment with the questionable suggestion that “we” are merely a collection of percentiles in the wealth distribution tables—and I will question that suggestion in a moment—the first thing to note is that “99 percent” is not the right number. Contrary to popular wisdom, it is not the “top 1 percent” but the top 0.1 percent of households that have captured essentially all of the increase in the relative concentration of wealth over the past fifty years.2

Between 1963 and 2016, this top one thousandth of the population have tripled their share of the pie and now own almost one quarter of everything of economic value in the country. The top 0.01 percent have done even better, and the 0.001 percent better still. In 1982, the price of entry into the Forbes list of the 400 wealthiest Americans (“the 0.00025 percent”) was $75 million and the prize at the top was $2 billion and change. As of 2019, $2 billion doesn’t even get you onto the list, and you’ll need a couple of extra digits to break into the top two spots.3 Even adjusting for inflation and economic growth, the rich today are an order of magnitude richer than they were just forty years ago. The last time the rich were this rich, in relative terms, was in 1928, or right around the time that my great-grandfather’s fortunes peaked.

And yet not all of the percentiles below the fabulous 0.1 percent lost ground over the past half century. Only the bottom 90 percent did. In the years between 1963 and 2016, every percentile below the 90th saw its relative share of the wealth decline. Collectively, the bottom 90 percent is down about one third in its piece of the pie, even while the top 0.1 percent is up by the corresponding amount. All of the 401(k)s, checking accounts, mattress money, and college savings plans of the bottom 90 percent now add up to a mere 10 percent of the nation’s financial wealth. Throw in the houses, cars, old pianos, and the other things that people generally can’t afford to sell, and the aggregate wealth of the bottom 90 percent totals up to about the same as the wealth of the top 0.1 percent. If our society had $2 to share between the richest 0.1 percent and the bottom 90 percent, it would give $1 to the guy in the private jet and the other $1 to the other 900, or about enough people to fill 20 city buses. Back in the 1960s, by contrast, the people on the buses shared $4 for every $1 among the sky people.

In between the 0.1 percent and the 90 percent, there is a collection of percentiles that has held on to its share of the growing economy. It has pulled away from the 90 percent, even as it has fallen far behind the 0.1 percent. Taken on the whole, the 9.9 percent is the richest segment of the distribution and controls more than half of the personal wealth in the nation. In fact, if the super-rich in the 0.1 percent and the masses in the 90 percent have $1 apiece, this group has about $2.50 to share among its members. As of 2016—the numbers will almost certainly be higher by the time you read this—$1.2 million in net assets will get you into this stretch of the wealth spectrum, and about $20 million will push you up to the 0.1 percent. This is the 9.9 percent.4

THE POPULATION THAT HAPPENS TO Reside in the 9.9 percent at any one moment is diverse, and no generalization about the group is accurate in more than a loose, statistical sense. Nonetheless, it is safe to say that this isn’t the place to look for superstar performers and the great disruptors of free market lore, and it isn’t a den for villains and plotters either. For the most part, it is home for people who follow the rules and do as they are told: professionals of all sorts, but especially in medicine and law; platoons of midlevel bankers; managers of processes you’ve never heard of; small business owners; and older couples who planned sensibly for retirement. One thing most of them have in common is the conviction that the system works and that their own success is the proof. The merit myth—the vague and sunny belief that everything works out for those who try—is the first tenet of the Creed of the 9.9 percent.

Another thing they have in common is that they are mostly—but not entirely—white. The median Black household had wealth of $3,557 in 2016—down by almost half from 1983. Latinos had $6,591, up a couple thousand dollars.5 The median white family, on the other hand, had $146,984, up over 80 percent in the same period. People of color are not absent from the top 9.9 percent of the wealth distribution, to be sure—a fact that is central to our collective self-image. It’s just that white people are eight times more likely to make it into those happy percentiles.

Another thing the 9.9 percent have in common is that they are lucky to live in America. In this book I confine my focus on the United States; but that is less of a limitation than it sounds. The United States represents a little over 4 percent of the world’s population and 24 percent of world GDP, but its 9.9 percent would blow away the competition in any face-off with the rest of the world’s 9.9 percent. That’s not because the United States is wealthier; it’s because the United States is that much more unequal. In the thirty-seven industrialized countries that make up the Organisation for Economic Co-operation and Development (OECD), on average, the top decile has about as much wealth as the bottom nine deciles put together.6 In the United States, the top decile has about four times as much wealth as the bottom nine. Between 1974 and 2014, while the ratio of income between the top decile and bottom decile rose from 3.5 to 7.3 in Sweden and from 5.3 to 7.8 in Holland, it rocketed from 9.1 to 18.9 in the United States.7 In some respects, the U.S. socioeconomic hierarchy looks more like those of India and Brazil, say, than those of traditional peers in the industrialized world such as Germany and Japan.

Another marker of membership in the 9.9 percent in the wealth distribution, at least in numerical terms, is an individual’s generational cohort. According to Census Bureau data, individuals who made the mistake of being born in the early 1980s, i.e., as one of the allegedly weak-willed and self-absorbed millennials, will have an average net worth 25 percent lower in 2016 in inflation-adjusted dollars than people born in the early 1950s had in the 1980s, when they were the same age. Meanwhile, those fat and happy baby boomers, now in their sixties and seventies, have seen their relative share of the wealth double.8 But before we incite a generation war, consider this: the growing gaps in starting salaries and starter-home values indicate that the secession of the 9.9 percent from the rest of society is now happening earlier than ever in the American life cycle.

Homeownership is another feather in the cap of those who succeed in the 9.9 percent game. While the median homeowner has a net worth of $195,400, the median renter has $5,400.9 That’s not just because rich people buy homes; it’s because buying (the right) home makes people rich. Some research suggests that homeownership has become such a central part of wealth formation that it may account for most of the increase in wealth inequality.10

A lesson for success among the 9.9 percent worth noting up front has to do with the importance of having good taste in parents. The Federal Reserve estimates that between 25 percent and 53 percent of all wealth in the United States is inherited11—the wide range has to do with assumptions about the rate of return on inherited wealth—and three quarters of inherited wealth ends up where approximately three quarters of all wealth starts off: in the pockets of the top decile. Setting aside the large financial fortunes at the top, a substantial part of that intergenerational wealth transfer passes through the family home.12

The spectacular rise of the 0.1 percent has received plenty of ink over the past decade, but the expanding chasm between the 90 percent and the 9.9 percent in some ways matters more to the real story of inequality in American life. In 1963, a household at the national median (that is, the 50th percentile) needed to increase its wealth by a factor of 10 to reach the median of the 9.9 percent. Now, the median household has to multiply its wealth by 24 times to achieve the same result. If you think of the American Dream as a mountain, that mountain is now more than twice as steep.

According to the same math, the Dream is now also at least twice as cruel. The traditional theory of the Dream says that the universal striving for material riches is a good thing because, win or lose, everybody gains in the end. A rising tide lifts all boats, or so the song goes. This was a credible view in the postwar decades, when economic growth generated matching increases in median wages. Over the past forty years, however, real wages have remained anchored to the sea floor, even as tuition, housing, and health care costs have raised the price of admission to the middle class.13 Only the top decile have floated up with the tide. The new theory of the dream is: winning is everything, losers stay put.

From a statistical perspective, the 9.9 percent is more or less what you get when the middle class goes underwater. (Or, maybe more accurately, when the middle class turns on itself and shoves the other guys off the boat.) But there is no reason to get particularly fixated on the current number. By the time you read this, it may well be the 8.9 percent, or the 7.9 percent. The only certainty is that, as long as inequality is rising, the number will go down. Not all of the people on the boat have figured this out yet, but the nature of rising inequality is such that the circle of joy is always shrinking.

IN ALL OF THIS FAMILIAR Statistical Chatter about wealth distributions, it is vital not to lose sight of the fact that percentiles aren’t people. Percentiles are just snapshots of where people happen to stand at any one moment on the economic hillside. Individuals move up and down the economic terrain all the time, as they advance in their careers, go into debt, have children, or slip on black ice. As the hillside gets steeper, however, they move more slowly, or so I will show in the chapters ahead. More than that, as the hillside gets steeper, people change. They start to think about themselves and about the nature of life itself in very different ways. They spend long hours looking up the hillside and, scary thought, looking down, and they often build their personalities around unspoken thoughts about what it would be like to live off the island, or in some other, unknown place.

Social class in general is misunderstood if we think of it merely as a label attached to one’s toe at birth. It has much more to do with the way in which we imagine ourselves, and it usually comes with a certain amount of struggle, since it is not always easy to get the world to agree with the image we have of ourselves. Often, as on my grandparents’ island, it is the misperceptions of wealth and station that matter most. It’s better to think of the percentiles, then, not as a list of people but as a landscape of opportunities, imperfectly filtered through a variety of perceptions. It’s like a grainy, composite photograph of what it means to live in the modern economy.

For most Americans most of the time, the salient feature of the economic landscape is not the shrouded peak occupied by the 0.1 percent. On the contrary, survey evidence consistently shows that most Americans have no clue how rich the rich really are. The average American thinks the average big-corporation CEO earns $1 million per year.14 (The right answer: $17.2 million for the top 350 firms as of 2018.)15 The average American doesn’t get that when the top twenty hedge fund managers took home $500 million apiece in 2018, it was a bad year for them. (The $770 million they made in 2017—now that was good times.)16 But most people do care a lot about the closer hillside occupied by the 9.9 percent. You can drive through their neighborhoods, you will come across them in all sorts of workplaces, and they are always on-screen. They are there to say that you can have it all, too, if you just put on your training shoes and lean in the right direction. The 9.9 percent is no exception to the rule that all consciousness is local.

The 9.9 percent, then, is more a state of mind than it is a group of people, even if it is embodied at this or that moment by some number of individuals. It is a way of being that is open to all those with the right attitude and the right assumptions. More than that, the 9.9 percent is the defining state of mind in America today. The ideas of the 9.9 percent are the ruling ideas of American society. In varying degrees, “we” are all the 9.9 percent—even if we are not yet or never will be precious-metal-card-carrying members of the group. In fact, much of the madness in America stems from the fact that most of us think we are in the 9.9 percent, even though only one in ten actually has the cash to show for it.

In this book, to repeat for emphasis, I use “the 9.9 percent” to describe a form of life rather than a set of people identified by their supposed net worth. It is a way of thinking and a system of values that characterizes many people who are not and have no realistic prospect of joining the top decile of the wealth distribution. Indeed, it matters most precisely insofar as it is shared by those who are not “paid-up” members of the 9.9 percent, as it were. This widespread culture of the 9.9 percent, I will argue in this book, is a fundamental consequence of rising inequality and it has transformed American life in profound, intimate, and often unacknowledged ways. It is in many senses the defining development in recent American history and the key to understanding the predicaments in which we find ourselves now.

Even so, I do not intend in this way to diminish concern with the extreme concentration of wealth at the very top of the economic spectrum. Quite to the contrary. The point rather is that oligarchs have never controlled anything with their own bare hands. Their power, like all human power, resides in the minds of other human beings. To understand how our ruling class came to be, and why it gets richer and more powerful with every passing crisis and act of universal impoverishment, it is necessary to know something about the illusions that accumulate down below as inequality rises. The pillars of the system ultimately rest on a ground of assumptions that guide the lives of people who look a lot like me and, probably, you.

MY GRANDPARENTS HAD ONE OF Those Marriages that seem as inevitable as a matching sofa set. The effortless coordination of their minds, though hardly gender-neutral, made them a formidable presence in any country club luncheon or contract bridge tournament. Only after Grandmother was gone and Grandfather had lost some of the ability to control his narratives did I piece together the story of how destiny almost failed to organize the furniture of life in the appointed way.

In his first and only year at Yale, the nineteen-year-old version of Grandfather ran off to the speakeasies of New York and came back with a wife. Yale at the time did not permit marriage, and the Colonel and Mother did not permit marriage to the wrong sort of woman. This marriage, the elders resolved, was a case of “hot loins.” The woman in question, however, was soon discovered to have “a nose for cold cash.” She demanded $5,000 to go away (worth about $50,000 today). The Colonel forked over the money and saved most of his fury for his will, in which he specified that Grandfather’s inheritance would take the form of a trust whose principal he would not be permitted to touch (until Grandfather learned how to game the trust). The twenty-three-year-old version of Grandfather went on to meet soon-to-be Grandmother, a debutante from Kentucky, who proved to be very much the right sort of woman, and the affair of the loins was consigned to that unlit basement where one places all of those unwelcome memories that somehow dictate the terms of a life.

This is a story I like to bear in mind when the conversation turns to economic inequality today. Most of our narratives about inequality tend to shape themselves around the economic data, and most of that data sits in some recently upgraded data sets on economic wealth and income distributions. The data are great to have (and I have already started to exploit the trove shamelessly here), but the love affair with spreadsheets gives the impression that understanding inequality is just a matter of comparing dollars and cents. Inequality, according to this line of thought, is what happens when Bill Gates walks into a bar. The average net worth goes through the roof—and everything else stays right where it is. The underlying assumption is that economic inequality answers to the laws of economics alone—laws that operate like a kingdom within the kingdom, entirely independent of the principles that govern the rest of human society.

But none of that is true. Money is never just about the money. Human beings always convert cold cash into good matches, elevated social status, higher education, better health, and political power—and then they turn around and exchange those other forms of advantage for money. Money is where the story of inequality begins and ends, but most of the plot happens in between. What looks like destiny is sometimes just the dead hand of an aging trust fund exercising its will. In many situations, too, the process works best when that handful of cash is curled up in a fist and hidden from view. I do not mean to pass judgment on this tendency among human beings to make markets out of all those things that money is not supposed to buy. It is what it is, and I tend to think that what is, if it really is, is good. The point is that the tendency necessarily increases in importance with rising inequality. You can’t understand the rise and the role of the 9.9 percent in American life today without taking it into account, or so I will show in the pages that follow.

In Chapter 2, you will meet many amazing families: supermoms, cool dads, and their camera-ready offspring. Then we will consider the secret identity between the sociological data and the economic data. The rise of the 9.9 percent has turned parenting into an extreme sport. It has cheated the luckiest offspring of their childhood and robbed the unlucky ones of their future. The process starts with values that can only be good—what kind of people would not want to care for their children?—and then twists those values into weapons in a ruthless struggle that undermines families in order to better exploit individuals.

It would be strange to think that such changes in family patterns would leave gender relations untouched, and indeed they have not. In Chapter 3, I show that the rise of the 9.9 percent has turned marriage and a stable family life into a luxury good. Notwithstanding the enlightened ideals about gender equality that are cemented into the official Creed of the 9.9 percent, I further contend, the rise of the 9.9 percent has in reality reinvigorated misogyny as a political force and opened the door to new forms of old gender hierarchies.

In Chapter 4, we follow aspiring members of the 9.9 percent as they seek admission to the colleges that now serve as the gateways to status and success in America. Along the way I track the damage that uncontrolled inequality has wreaked on the system of higher education. The rise of the 9.9 percent has brought about what I will call the Great Reprivatization of America’s university system. It has converted higher education from an engine of mobility into a machine for reproducing privilege. Above all, it has distorted the very idea of education in a way that strikes at the foundation of democracy.

In Chapter 5, we tour some of the nation’s finest neighborhoods, where the rise of the 9.9 percent has hammered the idea of community into an excuse for exclusion and transformed the celebration of homeownership into a housing affordability crisis. Rising inequality, the history will reveal, has converted the indirect homeowner subsidies that once served as a welfare system for the white middle class into a device for transferring money upward from the 90 percent to the 9.9 percent and reinforcing racial divisions. Through their domination of local government, the paid-up members of the 9.9 percent have monopolized control over the economic geography and restored property in land to its ancestral role as a principal mechanism for dividing the desirable from the undesirable.

To be clear, I do not mean to suggest that there is something intrinsically wrong with the ideals of parenting, family, education, and community from which the 9.9 percent got its start in the world. I take for granted that people will do whatever possible to secure a happy future for themselves, and there would in any case be no point in shaming them for doing what only comes naturally. I doubt that anybody sets off in the morning with the malicious intent of breaking up other people’s families, perverting the system of education, shortening average life expectancy, raising average commute times to toxic levels, or profiting from the race hatred of other people. The point is just that that is what happens in the twilight of the meritocracy. Rising inequality takes good values and quietly twists them into bad ones. The unconscious hoarding that has come to define the life of the 9.9 percent is a response to this underlying condition, not the cause, and it is a response born of weakness, not strength.

But none of that adds up to an excuse for not knowing how the system now works, which way it is headed, and the role we all play in its perpetuation. The distinguishing feature of the 9.9 percent is not that it has advantages and is willing to use them, but that it confuses its privileges with artifacts of nature. It sees its own virtues brightly in the mirror, and it has no trouble spotting the vices of other people. But it remains blind to the conditions on which both depend. That willful ignorance is the glue that holds the system together. It is our collective contribution to the triumph of the 0.1 percent and the fall of the 90 percent. Rising inequality makes accomplices of us all.

WHEN I FIRST HEARD THE Stories about the Colonel, I pictured him in cowboy boots, tying his horse up next to an oil derrick, and making on-the-spot decisions about where to drill and when to sell. That, I imagined, is just what the chairman of the Standard Oil Company of Indiana does, especially if he happens to be a former Rough Rider and goes by the name of “the Colonel.” Whenever I tried asking Grandfather exactly how the Colonel made his fortune, however, I usually got back an answer about the glories of capitalism and the evils of communism. Then he would remind me that the Rockefellers were our mortal enemies. This really confused me. Weren’t the Rockefellers the capitalists?

I eventually figured out that the Colonel was a lawyer, not a petroleum-sniffing cowboy. He was the son of a poor farmer made good with a scholarship to Coe College in Iowa and then a degree from Yale Law School. He got his start defending the rights of John D. Rockefeller’s Standard Oil Company to use its monopoly over the distribution of oil to crush its competitors and squeeze money out of the American public. From there he moved over to the executive side of the business. The high point and the low point of his career occurred around the same time, when he used his formidable legal skills to structure the offshore-shell-company scheme that supplied the raw money needed to bribe members of the Warren G. Harding administration to let Big Oil siphon off the vast reserves of publicly owned petroleum recently discovered under a rock in Wyoming shaped oddly like a teapot. (For those who slept through high school history: in the century preceding the Donald Trump administration, the Teapot Dome scandal was thought to have set the standard for corruption in American politics.)

The Colonel was never convicted of any crimes (though things did get dicey in the trial over his alleged contempt of Congress). But John D. Rockefeller Jr., who owned the largest block of shares in Standard of Indiana, knew a PR disaster when he saw one. The Colonel put up a fight—I knew for sure that was his style—but in the end the richer man won, and the Colonel was compelled to hang up his spurs. It all came as something of a surprise to me, when I read about the details in the textbooks. There was nothing in Grandfather’s brunchtime stories about Canadian shell companies or teapots. And yet, in the end, it all made sense. The real mystery, I later thought, was how it was that I had let so many loose ends in Grandfather’s tales escape my attention.

This is another one of those stories that come to my mind when the subject turns to inequality. The problem with inequality today—or at any rate, the part of the problem that should be of concern—is not that some people earn more or are worth more than others. It is that some people earn much more than they are worth and most people are worth much more than they earn. There isn’t just one Standard Oil now; there are dozens of them slithering all over the economy. And Teapot Dome is starting to look like amateur hour. The basic form of a solution to the problem of inequality today is not to redistribute wealth from those who have allegedly earned it to those who have not, but to return wealth from those who expropriated it to those who actually created it. The only kind of inequality that matters is that which involves injustice.

All of this, I think can be easily known, though I will present the necessary evidence for the case throughout this book. The real question—or at least the one with which I will be primarily concerned—is why we consistently fail to see an injustice that is playing itself out before our eyes.

Conversations about inequality with successful members of the 9.9 percent today, I have noticed, often move swiftly toward the defenses. Do you understand how hard it is to get into Yale Law? I worked my tail off! You want to punish me for my success? Anyway, that’s life, get over it! And so on. It’s a funny thing to hear this sort of talk coming from a group whose statistically significant attributes, apart from their wealth, also include, among other things, the whiteness of their skin, the year of their birth, the nation in which they happen to reside, the nature of their housing arrangements, and the size of their parents’ bank accounts. But we must take things as they are. The origin myth of the 9.9 percent is a certain idea of meritocracy.

Here it is important to distinguish meritocracy from certain false ideas about it, as I will explain further in Chapter 6. The problem with meritocracy is not the idea that merit should receive its just rewards, as many of its present critics seem to think. What could be wrong with rewarding people for their talent, effort, and accumulated skills? Much better to hear about the efficacy of face masks in a pandemic from an epidemiologist, I am inclined to think, than from the shouty guy at the other end of the bar. Indeed, rightly understood, meritocracy is simply one of many limited devices for holding power accountable to reason. It is a necessary component of a just democracy and a founding postulate of liberal democracy.

The real problem with meritocracy, or so I will argue, is the unstated, additional, and spurious assumption that the merit of isolated individuals is the principal human factor in the production of wealth and the moral foundation of our just rewards. It is not. This merit myth, as I will call it, becomes especially dangerous when it is used to explain and justify the growing imbalances in the distribution of economic and political power. It does not. The biggest problem of all is that, according to what I will call the Iron Law of Merit, the merit myth is itself a consequence of rising inequality. Indeed, it is the defining illusion of the 9.9 percent. Today we tend to blame inequality on the meritocracy, but the reality is that we should blame the problems with meritocracy on inequality.

In the medicine cabinet, right next the merit myth, you will find the other great opiate of the 9.9 percent. Call it the market myth. My grandfather ingested this one in very large quantities. It says that rising inequality is just the price we pay for a system that sets everyone free and leaves us all better off. It is the goose that lays our golden iPhones. And, blessed are we, it all comes down to timeless laws of economics written into the sky.

Bullshit, or so I argue in Chapter 7. Most of the supposed definitions of the existing economic system are merely statements of what its principal beneficiaries in the 9.9 percent and their bosses in the 0.1 percent would like it to be. What they really mean to say is: Wouldn’t it be nice to have “free” enterprise in a “free” market where all “capital” is put to productive use in an endless cycle of “creative destruction”? The actual system we have is none of those things, or so I explain, and it generates inequality not as an accident or a by-product but as a necessary feature of its business model. In this system, moreover, the Creed of the 9.9 percent has a special role to play, and it is not an altogether happy one. By insisting that our struggles are the necessary consequence of a system that operates entirely according to the beneficent principles of free and fair competition, that Creed serves to keep the desperation flowing downward and the money flowing upward.

The market myth, I further contend in Chapter 7, has corroded certain ideals of economic justice that, paradoxically, were present at the creation of the 9.9 percent. Professionalism and managerialism are not intrinsically bad things. On the contrary, they were and remain to some degree buffers against the fanatical absurdities of the market myth. They are central to any system that wishes to benefit from the kind of competition and innovation to which markets may contribute and yet relies on the imperfect nature and circumscribed conditions of actual human beings and actual human societies. In the age of captured markets and escalating inequality, however, these ideals, like the rest of the worthy values that once guided the 9.9 percent, have been twisted into their opposites.

Practically speaking, as I will further explain, the options for aspiring members of 9.9 percent in the existing economic system come down to this. You can seek shelter from the pressures of living in a stacked market by hiding in a profession that has betrayed its principles and learned to protect itself. (That was more or less the Colonel’s strategy when he came out of school as a lawyer.) Or you can join with the winners and organize the extraction of life-juices from your fellow human beings. (That was the horse that the Colonel rode when he took his pony up to the top of the legal oil field.) This is the why most of the paid-up members of the 9.9 percent wear white coats or white collars. Sadly, the white coats have not yet figured out that the white collars will soon eat them for lunch, before turning on themselves.

ONE OF THE THINGS that became clear when my grandparents passed away is that they had never been all that rich. Everything had gone into appearances. I don’t mean that only in a financial sense (though there was that). In the end, the struggle to stay on the island came with some not insignificant personal costs, too. They lived in a home much smaller than they might have liked because living off-island was unthinkable. They ate and drank too much cheesecake and champagne in their efforts to keep up at the clubs. And they experienced quite a few cloudy days of disappointment and alienation, when family members blew in with unspoken regrets about their failure to achieve the status to which they were supposedly born. I don’t doubt that my grandparents would have done it all again. But it was clear in retrospect that the land of endless French toast had never really been such a thing of splendor.

Quite possibly some of the paid-up members of the 9.9 percent will have experienced a similar moment of morning-after accounting. The overpriced homes, the overanxious offspring, the overpolished credentials, the over-policed and over-purified neighborhoods—they’re usually better than the existing alternatives, but they aren’t quite the unalloyed goods that they at first seem to be. The story on the surface of the 9.9 percent is about the class that gets everything it wants; the subtext is about a group that has simply played the game of self-subordination better than others.

The root of the trouble, I now tend to think, has to do with the ways with which we think about wealth and inequality. More precisely, it has to do with the ways in which inequality distorts our ideas about wealth, progress, and our own well-being. Inequality deforms consciousness, or so I contend; it makes us all unreasonable.

Now, we all know that human beings have always been unreasonable to some degree. They routinely draw conclusions about the way the world is from the way they wish it to be; they systematically overvalue evidence of recent experience and undervalue evidence that comes from far away; they are really bad at math, especially the math of risks and probabilities; they think their team is always in the right, and the other guys are always in the wrong; and so on. As inequality rises, however, all of these cognitive defects become catastrophically worse, or so I show. The human faculties of moral cognition are simply not built to work under conditions of extreme inequality. Even more important, inequality brings forth social forces with the means and the motive to amplify and exploit the growing vulnerabilities in the human cognitive apparatus. This self-combustion of reason, I think, is the real backstory behind the rise of the 9.9 percent.

In Chapter 8, I draw on parallels between ancient and modern civilization to illustrate how inequality inscribes itself on our own bodies and then distorts our ideas about the actual sources of our physical health and well-being. The rise of the 9.9 percent, I argue, accounts for the paradox of a nation where well-toned abs are an obsession even while pre-existing conditions multiply at pandemic levels, where billionaires look like fitness trainers while the average life expectancy declines. It is the fundamental reason why the nation with the most expensive health care system in the known universe is among the least able to protect its public health. Inequality disrupts progress by distorting our ideas about the only kind of well-being that actually matters, or about actual human prosperity.

In Chapter 9, I return to the role of inequality in enabling the growing political power of racism in twenty-first-century America. According to the theory favored by the 9.9 percent, racism is a legacy of the past, bound to fade as individuals slowly purify their souls of bad thoughts. The reality is that rising inequality today serves, as it has throughout history, to reproduce racism in new forms, and the 9.9 percent theory of racism is just a way of framing the problem that leaves its own contribution out of the picture. The race dividend, as I will call it, cultivates race hatred in society at large and converts it into higher real estate returns and higher income for those who live and work in mostly white spaces without regard to the purity of their souls or even necessarily their individual racial identities—and this dividend grows in times of rising inequality.

In Chapter 10, I argue that the triumph of unreason is the defining crisis of American politics and that this crisis is the principal manifestation of rising inequality. According to many of the usual narratives, by contrast, inequality is just one among many grim problems we face, and it has to stand in line alongside, and maybe behind, such worries as political polarization, hyperpartisanship, and corruption; climate change, runaway technology, and threats from foreign adversaries; racial injustice, gender injustice, religious bigotry, and the decay of moral and social institutions in general; the permanent crises in health care, education, and housing; and, well, the list could go on. Each of these issues does indeed deserve individual attention and tailored solutions. But compartmentalizing injustices is also one of the ways that injustice perpetuates itself. The real problem is the politics of unreason to which inequality necessarily gives rise, and the solution is to reestablish a politics of reason.

In this struggle to achieve a politics of reason, I further contend, the 9.9 percent have a peculiar and somewhat tragic role to play. The original charter of the meritocracy is to hold power accountable to reason. Its job is to make authority answer to scrutable laws, norms, and facts rather than the whims of rulers. Under the pressure of rising inequality, however, the intellectual vanguard of the 9.9 percent has abandoned its post. Some of its members have gone to work directly for the superwealthy in those ideological factories known as think-tanks. A larger number have preferred to hide behind the simulated justice of specious relativisms and the politics of posturing. Both have framed the crisis of our time in ways that leave their contribution out of the picture. Both have committed a kind of treason of the intellectuals.

GRANDFATHER’S BEST STORIES actually strayed far from the theme of the family tree. He chuckled to life when he talked about his years of service as a pilot in particular. In his early middle age, before the inheritance solved all problems, while he was still living under the shadow of the Colonel’s wrath, he learned how to fly and went to work for Trans World Airlines. Grandmother, too, became a pilot, and joined the first generation of female pilots. For a time, they crossed the midwestern skies in a barnstorming plane, offering thrills to wide-eyed farming families for spare change. During World War II, Grandfather enlisted in the navy’s air transport service and flew supply missions in the Pacific theater. The stories about Lieutenant William Stewart of Revolutionary War fame, I long knew, were so much baloney. (As best I can gather, William was an Irish peasant who moved out to western Pennsylvania and ended up on the wrong side of George Washington in the Whiskey Rebellion.) Grandfather’s war service, on the other hand, was unglamorous but real. In an indirect way, it helped imbue me with an optimistic view of the American future.

In any discussion of the problem of inequality today, it is easy to fall into a doom loop. History supplies an abundance of evidence that inequality is a one-way street. It always ends badly. Even worse, you can see it all play out in real time. The self-regard and greedy paranoia of the super-rich, the nihilism of the resentful masses, the willful obliviousness of the those upper-middle operators of the machinery—it can sometimes seem like you’re forced to sit through a bad movie with an all-too-predictable plot. That’s why those unwelcome experiences of déjà vu today are so unnerving. It’s easy to slip into the idea that the only option is to watch it all burn.

But I do not share this pessimism. I tend to think that mystical calls for a total revolution are just another one of the ways in which inequality perpetuates itself—mainly by representing the only alternative as impossible or dangerous. My optimism, such as it is, rests on a simple fact. Some degree of progress in human affairs has in fact happened. It has not been continuous or cumulative, and it is not irreversible, as its more naive champions today tediously insist. But it is real. And it has happened in America, too. The important thing is to understand its actual source, and to separate this from the self-congratulatory myths with which it is often traduced.

In the final chapter of this book, I frame the solutions to the problem represented by the rise of the 9.9 percent in the context of American history. We do not need to reject the promise of America in order to address the problem of inequality; we just need to recover it from the many false interpretations that have been imposed upon it, or so I contend. We aren’t doomed to a politics of unreason, because there are reasonable steps we can take to advance reason itself. The same is true for the values that lie at the origin of the 9.9 percent. The belief in education, the commitment to scientific expertise, the principle of fair play and earning your privilege—these are all good things. We just need to clear away the baggage that rampant inequality has piled on top of them.

There is lots to do, and I will point to many solutions in the pages that follow. We need to change the way we understand and organize the care we provide for all children, not just our own. We need a new and democratic philosophy of education and a new way of funding and managing it. We need to accept that health has always been something we pursue collectively as well as individually. We should face the fact that there is no lasting hope for racial or gender justice without economic justice. We should take control of American geography back from those feudal overlords who have captured it through self-serving land use regulations and return it to productive use. We should obliterate the monopolies, reempower workers, and use the tax system to return wealth from those who have expropriated it to those who actually created it. We need to fix the disinformation system, return data to the people, and establish a genuinely open market in ideas. And while we’re at it, let’s get the money out of politics.

But I wouldn’t put too much weight on the specifics of the to-do list offered here. The solutions are mostly obvious in their general form but complicated in the specifics. Tackling a problem like inequality requires attention to detail, smart tactics, and a lot of fight. It’s far too much for a short book about everything that’s wrong with the world. As a rule, I tend to think, books are not a great way to save the world. They’re best when they stick to the job of trying to open a few eyes. The striking fact about inequality today is not that it exists but that we do nothing about it. We do nothing about it because we have figured out how not to see it. So now it is time to take a look.
Photograph by Jessica Kirschner

Matthew Stewart is an independent philosopher and historian who has written extensively about the philosophical origins of the American republic and the history of management. With degrees from Princeton University and Oxford University and a stint as a management consultant, he was once a respectable member of the 9.9%. His work has appeared in The Atlantic, The Washington Post, The Wall Street Journal, and Harvard Business Review, among other publications. He lives near Boston, Massachusetts, and you can visit him at

"Matthew Stewart’s new book is a captivating account of how America got into our current plight of extreme inequality and why that should concern all of us—especially those of us in the top 9.9 percent.  It closes with some suggestions about what we might do about it, which alone should make the book must reading in the Biden White House."

– Robert D. Putnam, author of Bowling Alone and Our Kids

"A charged study of the second-tier wealthy in America, the principal engine of inequality. . . . A sharp-tongued, altogether readable, and welcome assault on unrestrained wealth."

– Kirkus Reviews (starred review)

"The 9.9 Percent is a bracing and necessary read. Matthew Stewart does not pull his punches, making clear that the inequality and social stagnation plaguing the United States cannot be blamed on the billionaires. The ideology of meritocracy has been perverted to support a growing aristocracy, even as many of us passionately profess our commitment to universal equal opportunity. Highly recommended."

– Anne-Marie Slaughter, CEO, New America

"[A] withering assessment of the overweighted, nearly intractable socioeconomic power of [the] 9.9 percent—all conveyed with an acid humor that recalls the late social critics Henry Fairlie and Paul Fussell."

– Booklist (starred review)

"In The 9.9 Percent, Matthew Stewart studies . . . the social class just below the new millennial robber barons—the overcompensated, self-regarding, yet terminally anxious cohort of the merely extravagantly privileged. . . . [a] clear-eyed and incisive study."

– Chris Lehmann, The New Republic

"A rip-roaring argument against oblivious privilege. Stewart is an agile, witty writer with philosophical gifts. He can make you laugh while you make better sense of America."

– Alissa Quart, author of Squeezed: Why Our Families Can’t Afford America, Executive Director, Economic Hardship Reporting Project

"Like the ancient curse of Midas, today’s extreme inequality poisons even those it privileges, as Matthew Stewart reveals in this urgent and convincing book. It’s not just the plutocrats who are ruining lives; it’s all of us who enable the toxic myth that our society is a meritocracy and who engage in practices we fail to recognize as ruinous. To understand how your life got so harried and your country so cruel, read this book."

– Nancy MacLean, author of Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America

"At a time when there is much focus on billionairesthe top 0.1 percent of American householdsMatthew Stewart's book The 9.9 Percent provides us with a welcome, in-depth look at another vitally important group. . . . This important, often gripping book gives us a much-needed analysis of a powerful group, the 9.9 percent, that is too often overlooked as it plays a pivotal role in shapingand mis-shaping21st century America."

– Steven Greenhouse, author of Beaten Down, Worked Up: The Past, Present, and Future of American Labor