Wednesday, January 4, 2012

The Sugar Bowl and the Culture of Entitlement

The University of Michigan won this year’s Sugar Bowl football game against Virginia Tech. This is the first time in many years that the Sugar Bowl (a BCS bowl game) has hosted two teams not ranked in the top ten. Many people thought that there were more worthy teams with better records that deserved to be in that game—Boise State, Kansas State, or maybe even Michigan State. But the invitations went instead to teams with lesser performance this season, but lots of “tradition” and reputations for selling lots of tickets and attracting lots of attention.

This controversy surfaces a set of issues that currently plagues discussions of economic issues, particularly inequality. Folks in positions of power in the business world contend that the enormous sums they receive are earned by their hard work, excellent skills, and sound judgment. They criticize rank-and-file workers who expect raises in line with productivity increases for having a “sense of entitlement”, expecting pay they have not earned. But the rank-and-file do not see the differences in pay as earned, particularly when they see executives rewarded for failure, and when many of them seem disconnected from their companies and their jobs. Rather, ordinary folks (the 90 percent, as the “Occupiers” would say) see the process of determining pay as akin to the process of BCS bowl invitations. The rewards don’t go to those who work hard and perform, but to those with the big titles, big reputations, and “tradition” (old school ties, family connections and the like).

Economic rewards in our society have become increasingly disconnected from performance, responsibility, skill, judgment, or any other reasonable justification over the last 30 years. Inequality has increased as a result. Ordinary people now perceive this. Unless the situation changes, there will be an increasing scramble for political and economic power at all levels of society, so that power can be translated into higher incomes. It will get ugly. The way to change the situation is to move toward a society in which economic rewards are in fact based on qualities that we want to encourage, rather than just on position, title, and tradition.

A good place to start, because of its symbolic value as much as its real effects, would be a big boost in the estate tax. But that’s an issue for another day.

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