Plutocrats

economic wars, too: “In any naked contest with the New Class, business is a certain loser. Businessmen who cannot even persuade their own children that business is a morally legitimate activity are not going to succeed, on their own, in persuading the world of it. You can only beat an idea with another idea, and the war of ideas and ideologies will be won or lost within the New Class, not against it. Business certainly has a stake in this war—but for the most part seems blithely unaware of it.”

Kristol was, of course, one of those dissident members of the New Class—he concludes his essay by urging businessmen to seek out intellectuals like himself “to offer guidance,” just as they would hire competent geologists to help find oil—and over the next thirty years he, his fellow conservative intellectuals, and the business leaders who bankrolled them did a remarkable job of building up a network of conservative think tanks, foundations, elite journals, and mass media outlets. But what is really striking isn’t the rise of what Hillary Clinton once dubbed the “vast right-wing conspiracy,” it is the extent to which the climate that Kristol complained of so bitterly in 1977 is today so much more conducive to his ideas.

Just take a look at the pages of America’s leading newspapers. In April and May of 2011, when unemployment was 9 percent and the ten-year rate on U.S. Treasury bills—the American government’s cost of borrowing money—hovered around a historically low 3 percent, the five largest papers in the country published 201 stories about the budget deficit and only sixty-three about joblessness. The left won the great culture wars of the 1960s, but the right has succeeded in setting the terms of the economic debate. A good outcome for the 1 percent.

The life choices of Democratic first families tell a similar story. Amy Carter, who came of age in the White House, took part in anti-apartheid protests at the South African embassy in 1985 (for which she was arrested). She met her husband at an Atlanta bookstore where he was a manager and she was a part-time employee. Chelsea Clinton, the next Democratic daughter, has worked at a hedge fund and as a management consultant. Her husband, a fellow legacy Democrat, worked at Goldman Sachs before they married and went on to set up his own hedge fund.

One reason Kristol’s wing of the New Class won is that they were right. Capitalism works, and its triumph became a global fact with the collapse of the Soviet Union.

The demise of communism was, of course, tremendously encouraging for the free market intellectuals of America’s New Class, but it had an even more profound impact on the New Class in the emerging markets. The intellectuals in most of those markets have lived through some version of central planning, ranging from the repressive Soviet model to the freer but also inefficient Indian version. You could argue that, as a group, the New Class didn’t do too badly under communism—that, after all, was the thesis of Djilas as well as Szelenyi and Konrad—but to most people who actually experienced it, that theory doesn’t stand up to the routine humiliations of life in a dictatorship. In the emerging economies, the scorecard is even starker. In India and China, the past three decades of freer markets have lifted hundreds of millions of people out of poverty, a feat the previous three decades of left-leaning development economics had singularly failed to accomplish.

The result is the intellectual dominance of the sort of thinking Kristol described as a dissident view in 1970s America. In the 1990s, the brightest intellectuals in the former Warsaw Pact, from Warsaw itself to Tallinn to Moscow, were those figuring out how to transition from communism to capitalism. The smartest Chinese were working on the same question. Today the most famous African intellectual outside that continent is Dambisa Moyo, whose big idea is that foreign aid is self-serving and disempowering.

In the United States, that self-proclaimed capitalist tool Forbes magazine is suffering the slow, sad decline that seems to be the fate of most print magazines; meanwhile, it now publishes fifteen international editions, including versions in three former Soviet republics, India, China, and the Middle East. The Harvard Business Review, the proudly dry bible of the C-suite, has eleven foreign editions and can be found in most kiosks in the Moscow subway.

The Kristol wing of the New Class is globally ascendant for a more material reason, too. In Kristol’s day, left-leaning intellectuals could get comfortable, socially prestigious jobs at the like-minded institutions whose ideological climate Kristol so deplored—elite universities, think tanks, the media. Today, the finances of universities and the mainstream media are in pretty rough shape, particularly by comparison with the bank balances of the plutocrats. (The publisher of the Financial Times once remarked to me ruefully that in a very good year the media group’s entire profit was equal to one midlevel Wall Street trader’s bonus.) Some think tanks are in rude health, but those are very much under the sway of their engaged philanthro-capitalist founders.

Those members of the New Class Kristol most feared—academics in the humanities—are those who today are most hard-pressed. Indeed, getting a doctorate in the humanities, once a ticket to the top tier of the New Class, is today such a wretched business one disappointed academic has created a popular Web site called 100 Reasons NOT to Go to Graduate School. Emory English professor Mark Bauerlein, a former staffer of one of those New Class institutions most demonized by the right, the National Endowment for the Arts, told the Yale Daily News: “It just doesn’t make sense for people to go to school in the humanities.”

Meanwhile, super-elites prosper and their spending on what they like to call “thought leadership” grows, with a predictable impact on the climate of the institutions of the New Class. In her inaugural commencement address, Harvard president Drew Faust observed sadly that the obvious reason so few Harvard graduates were pursuing careers in the humanities and so many were going to Wall Street was, “as bank robber Willie Sutton said, that’s where the money is.”

Awareness of those changed incentives has wrought a powerful cultural change. In 1969, radical Harvard activists rallied together to force ROTC off campus. But when some Harvard students walked out of former Bush adviser Greg Mankiw’s class, the Harvard Crimson, training ground for the New York Times masthead, condemned the protesters in an editorial titled “Stay in School.” A half dozen students staged a walk-in in support of their professor, and were greeted with applause and shouts of “We love Greg Mankiw.” Professor Mankiw, himself an adviser to the Romney campaign, noted that today’s undergraduates are less concerned with social justice than his cohort had been. “My first reaction was nostalgia,” he wrote in an op-ed about the protest. “I went to college in the late 1970s, when the Vietnam War was still fresh and student activism was more common. Today’s students tend to be more focused on polishing their resumes than on campaigning for social reform.”

Many of Professor Mankiw’s students will go to work on Wall Street. But among those who remain in the New Class, the ones most closely connected to the super-elite will be the ones who prosper. The best way to earn a living as an intellectual is as a teacher of the super-elite, or an employee. The only four fields where average professor salaries are in the six figures are law, engineering, business, and computer science.

Most important, academics in fields the plutocracy values can multiply their salaries by working as consultants and speakers to super-elite audiences, often in the emerging markets. As Niall Ferguson told me, during a whirlwind weekend when he had given a speech to a private equity conference hosted by a Turkish plutocrat in Istanbul, followed by a speech in Yalta for Ukrainian plutocrat Victor Pinchuk, the roads out of Cambridge, Massachusetts, get jammed on Thursday afternoons as Harvard Business School professors rush to the airport to get to their international speaking gigs. A bestselling New York nonfiction writer likes to tell his more literary—and less well-off—friends that his secret is to write books businesspeople can read on a transatlantic flight.

Even as they cash their speaking fees from the super-elite, these academics shape the way all of us think about the economy. That is mostly through their work in the classroom and at their computers, but also in their role as “independent” experts in legislative debates. A 2010 study by three of my colleagues at Reuters found that of ninety-six testimonies given by eighty-two academics to the Senate Banking Committee and the House Financial Services Committee between late 2008 and early 2010—a crucial period when lawmakers were debating their response to the financial crisis—roughly one third did not reveal their ties to financial institutions.

WINNER-TAKE-ALL POLITICS

Politicians are sometimes described as another branch of the New Class, and they are even more dependent on the super-elite than are their academic brethren, who, after all, can still rely on the comforts of the tenure system (even if it is growing rather threadbare). This, again, is true of politicians as a group, not just of those on