The Semi-Rich and Elite Overproduction

Matthew Stewart, Peter Turchin and Higher Ed

Stepping back from the minutiae of higher ed business data, two authors have put forth concepts with an impact on the industry and its students: Matthew Stewart’s “9.9%”, and Peter Turchin’s “cliometrics” and his ideas about elite overproduction.

The 9.9 Percent

Writer Matthew Stewart argues that a new class of “semi-rich” families and individuals have arisen in his recently published The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture. From an interesting interview of Stewart by Aditi Shrikant at Grow:

  • Defining the “9.9%” (or, if you prefer, the “PMC”, the Professional Middle Class): “The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says. Those assets include cash savings and investments, as well as real estate. Many members of the 9.9% don’t feel enormously wealthy but they are still doing better than the vast majority of the country.”
  • Focus on education and credentials: “They tend to be education-focused. The highly educated, especially people with advanced degrees, have done particularly well… On balance, they tend to be more in the professional and managerial kinds of roles. It’s not that everyone in the 9.9% is that. There are lots of small business owners, but the core of the people have found a niche in a professional hierarchy.”
  • Focus on higher ed: “If you’re a part of the 9.9%, culturally and economically, you had your kids in a thoughtful or planned way and you take for granted that they will go to a college and they will go to the best college they can get into.”
  • Meritocracy: “I think a defining feature of the group culturally is this belief in meritocracy, in the sense merit is what makes the economy work. The sum total of our GDP is the sum total of the individuals in it. Everyone earns what their merit is worth. That is coupled with a market myth that says that whatever people do that earns money is essentially good for society.”
  • Meritocracy and Rationalization: “You’ve had this huge divergence in incomes and people want to explain that. And it turns out the handiest explanation they can come up with is merit, but there are a number of reasons it just doesn’t add up. They have to assume there is a lot more merit in the world now than there was 40 years ago, and that’s kind of strange… The distribution of income doesn’t look anything like the distribution of human aptitude. Merit doesn’t explain the divergence in income, but it is what people turn to… It’s an after-the-fact rationalization as opposed to an actual explanation.”
  • “Most members of the 9.9% also talk about the amazing virtues of education and go out and build these systems where the educated will succeed… It’s like someone manages to jump across a pit of fire and get to the other side and then convinces everyone else they should do the same thing. Unfortunately, statistically, those following that model are not all going to succeed.”
  • 90% of Americans are not like this: “The people who buy into the 9.9% are much more insulated than they tend to imagine. They spend most of their time talking to other people on similar trajectories and are far more isolated than they think they are.”

In another interview in Princeton University’s Alumni Weekly, Stewart is more polemical:

  • The children of the 9.9%’s “chances of achieving meritocratic success are not good, and they’re going down all the time — and that’s a direct function of rising economic inequality.”
  • Asked “What inspired the book? …the experience of being a member of the upper-middle-class meritocracy with kids, and the kind of madness that that involves.”

And in Vox, he is even more direct about fear and anxiety connected to status:

  • Stewart is asked: “One of the things you write about in the book is how much this 9.9 percent are willing to invest in their children — in nannies, in schools, in extracurriculars. Where does this pressure come from, this urge people have to make their kids the best?”
  • He responds: “I think the driving motivation is fear, and I think that fear is well-grounded. People intuit that in this meritocratic game, the odds are getting increasingly long of succeeding. They work very hard to stack the odds in their kids’ favor, but they know as the odds get longer, they may not succeed.”
  • “The source of the fear is also this inability to imagine a life that doesn’t involve getting these high-status credentials and having a high-status occupation. This life plan looks good, and it certainly looked good in the past when the odds were more sensible. But it’s not a great deal. It’s something that isn’t just harmful to the people who don’t make it, it’s also harmful to the people who get involved and do make it, in some sense.”
  • “I would point to the sociological and psychological evidence that you have significant increases in anxiety-related disorders and other forms of unhappiness even among people who are fairly well off.”

Stewart’s lucid comments of course tie into higher education and its business model; this 9.9% is the industry’s prime consumer segment. Before making some connections, let’s pivot to another, more prominent thinker, Peter Turchin.


Turchin’s “Cliodynamics”

A UConn ecologist specializing in insect populations and their environment, Peter Turchin decided two decades ago that, if biologists could develop laws or rules applying to how insect populations grow, shrink and adapt, similar laws could be developed for human populations. Turchin’s termed his laws “cliodynamics” (Clio = the muse of history).


Peter Turchin, rumpled Russian emigre academic (photo from the Atlantic)

The Atlantic’s profile of Turchin by Graeme Wood begins with an awesome opening line: “Peter Turchin, one of the world’s experts on pine beetles and possibly also on human beings…” Turchin’s ideas about applying scientific ideas to history are certainly controversial but, sidestepping debates about his general principles, one of his observations about US current affairs is relevant to higher education: elite overproduction.

From the Atlantic piece:

  • “Turchin stresses ‘elite overproduction’—­the tendency of a society’s ruling classes to grow faster than the number of positions for their members to fill. One way for a ruling class to grow is biologically—think of Saudi Arabia, where princes and princesses are born faster than royal roles can be created for them. In the United States, elites over­produce themselves through economic and educational upward mobility: More and more people get rich, and more and more get educated.”
  • “Neither of these sounds bad on its own. Don’t we want everyone to be rich and educated? The problems begin when money and Harvard degrees become like royal titles in Saudi Arabia. If lots of people have them, but only some have real power, the ones who don’t have power eventually turn on the ones who do.”
  • “In the United States, Turchin told me, you can see more and more aspirants fighting for a single job at, say, a prestigious law firm, or in an influential government sinecure, or (here it got personal) at a national magazine.”

Turchin’s background in insect populations shows through here: a certain population segment grows. Why and how does that happen? And what are the consequences?

Whether Turchin’s diagnosis of “elite overproduction” applies to the US today is a worthwhile question, no matter what one thinks of his application of scientific concepts to human society.


The 9.9%, Overproduction and Higher Ed

Are the two ideas supported by higher ed trends?

Stewart: “People intuit that in this meritocratic game, the odds are getting increasingly long of succeeding.”

Stewart’s statement is a general one, covering career, education, even family stability, but let’s focus on how the odds affect college enrollment. High school students and their parents are applying to far more schools in each college application cycle than they did a dozen years ago, as is well known. The application surge across US admissions is driven in our view by students shopping to discover and minimize the actual price of college. But admissions at highly-selective need-blind institutions can offer a different perspective because the application process there is different from most of US higher ed.

Students’ efforts to gain the mostly fixed number of slots at these top colleges has undoubtedly intensified. Take Columbia University: in 1991, it accepted 32% of applicants (no, that is not an error); in 2007, 12% were admitted; in the record-breaking 2021 cycle, 3.7% were.

A group of selective schools which we will dub Ivy+ (the Ivy League, MIT, Stanford and the University of Chicago) have in the meantime only modestly increased their undergraduate body size:

Includes Brown, Columbia, Cornell, Dartmouth, Harvard, MIT, Penn, Princeton, Stanford, U of Chicago, Yale

During a period when 7,000 more students went to school there, the application volume doubled:

These campuses draw from many different social groups but Stewart’s 9.9% is the by far the biggest:

2013 figures

With its large endowments, this Ivy+ group admits students on a need-blind basis (the financial aid and admissions offices operate independently), rarely competing on price. Because a great portion of the enrollment comes from the 9.9%, many of whom are happy to enroll full-pay (no discounts) at these prestigious institutions, most applications are not motivated by price comparison, like with other colleges. The admissions surge is driven by students working, to quote Stewart, “very hard to stack the odds” and “to jump across a pit of fire and get to the other side.” and reflects the growing intensity of the “meritocratic game.”


Turchin: “You can see more and more aspirants fighting for a single job”

Turchin’s proposition is difficult to analyze in terms of data but, qualitatively, widespread career frustrations among young people after college in the last decade support it. As does this famous data trend:

Through 2020

This generational break down of educational debt from NAHB Now also nicely illustrates student debt’s growing burden on those younger than 40:

Through 2017

Commentary on total student debt often refers to rapidly inflating college costs as a cause. While granting that a significant minority of this debt is related to graduate programs with unknown aggregate cost trends, we do know that undergraduate net costs have been increasing at a rate similar to or slightly below inflation since the Great Recession in 2008. And reports confirm that federal student debt per student on graduation has held steady in recent years. Finally, enrollments have been falling over the last part of the decade.

Why then are these aggregate debt levels rising? If the borrowing side of the loan balance equation isn’t the cause, the problem must be the repayment side. Graduates are unable to generate enough income to pay off their loans. There aren’t enough good college grad jobs to support all the graduates.

Turchin appears to be correct: elite overproduction by the education system is occurring. To be precise, student loan data indicates that there is overproduction of candidates who hope to join the elite. Some failed candidates are unable to secure jobs paying enough to service their student loans. Some grads successfully enter credentialed “elite” fields – portions of media and contingent instructors in academia – where pay has cratered. The phenomenon shows up in the FRED chart on student debt. It is a problem of over enrollment, not rising prices or rising per student borrowing.

Stewart: “The driving motivation is fear, and I think that fear is well-grounded”

There aren’t enough suitable jobs for all these additional graduates. It’s a game of musical chairs. The stress and anxiety from a saturated job market flows to parents and bleeds down to their children. Because the 9.9%, higher ed’s core demographic, firmly believes in education and credentials despite their increasing riskiness, this anxiety leads to heightened efforts to get into selective colleges, generating more applications and frankly absurd elite college selectivity. Hypercompetition ensues.

We feel it; the data shows it.


Read this post and others at our CTAS Higher Ed Business blog on Substack.


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