YOUTUBE 📚 THE COMPETITIVE ADVANTAGE 📚 PATREON

📚 Hey, good evening!

Today’s book might anger you. It also might make you sad or a little bit depressed…or you might not care at all.

But I don’t think that last one is too likely.

This book, The Velvet Rope Economy, will probably make you feel something quite strongly. At the very least, it will cause you to think about the societal implications of the growing gap between the rich and poor -

Between the have-nots and the have-yachts.

I was extremely impressed with this book when I read it last year, which is why I recently published my complete breakdown of The Velvet Rope Economy for the Stairway to Wisdom, highlights of which I’ll share with you here in this email.

The breakdown itself is about 9,400 words, covering all the Key Ideas, Book Notes, Action Steps, and more.

It’s also free, by the way.

It’ll only take you about 36 minutes to read the whole thing, and in it, you’ll learn about levels of ease and access available to high-end consumers in the United States (and elsewhere) that are so far out of reach for the average person that the whole situation is causing massive tension and unrest, as more and more people are feeling priced out of the American dream that they were promised.

You can read the full breakdown here, but I’ll give you a little preview in this email so you can decide whether to check out the full one later.

Again, totally free.

I should actually say “free for right NOW,” because it’s going back behind the paywall very shortly.

Then it’s just for members only at the Stairway to Wisdom. 

Alright now, let’s learn how to…

This Book is For:

*People who are interested in fairness and ethics as they relate to economics, and who want to understand more deeply the nature and consequences of rampant inequality in America.

*Anyone who wants to learn more about group dynamics, and how the relentless drive for status and recognition shapes our lives, our societies, and our world.

*People who are concerned about poverty and inequality generally and who want to translate the lessons of poverty in America into solutions in their own countries.

*Literally anyone who is concerned about the level and extent of the inequality present in the world today and who sees the value in thinking deeply about the kind of societies that allow it to continue.

Summary:

In the near future, society will be divided between the have-nots and the have-yachts. Between the people who have just enough, and the people who have more than they could ever need or spend.

Even though we are lifting people out of extreme poverty at an unprecedented rate, the very wealthiest people in the world are also adding to their riches at an unprecedented rate, and the reigning theory is that this is going to continue to cause big, potentially harmful changes in the economic landscape going forward.

With that background in mind, Nelson D. Schwartz’s book is about the increasing split between the segment of consumers that are willing and able to pay for extra privileges and accommodations, and those who will have to take what they can get in this two-tier system.

Schwartz is an economics reporter for The New York Times, and The Velvet Rope Economy is his sometimes intriguing, sometimes infuriating, but always illuminating investigation into the invisible rift that divides how poor Americans and rich Americans live.

In numerous areas, from health care, schooling, travel, leisure, and more, there is something akin to a velvet rope separating those have-nots and the have-yachts, yielding outrageously skewed, unfair outcomes in a country that claims to offer unlimited freedom and opportunity.

This is a challenging book; not for its difficulty level, style, or language, but simply because it forces you to think deeply about what this trend could mean for our public spaces and how we relate to each other as individuals.

Schwartz’s contention is that as the better-off contribute less and less to the public good, the quality of our public spaces – and even our public discourse – will steadily depreciate and degrade, and the entire fabric of society will be worse off than it was before.

This is one of the better nonfiction books I’ve read in recent memory, and open-minded thinkers of all political persuasions would benefit mightily from reading it. While engaging with Schwartz's arguments, I didn’t feel as though I was being pressured to accept a political agenda; instead, I just felt as though someone who cared deeply about the less fortunate was trying to get me to pay attention to something incredibly important and real.

Nelson D. Schwartz plays the part of the lookout on the Titanic which is the ship of American inequality. We have time to veer away from the iceberg we've built with the unfairness of our current system. But the 1st Class passengers need to start talking to the Coach passengers, and the ideas put forth in this book represent an excellent first meeting place.

READ THE FULL BOOK BREAKDOWN HERE

Key Ideas:

#1: The Growing Divide

Dividing people into "classes" always dims my spirit just a little bit, and so I generally resist doing so. It just doesn't have enough explanatory power for me. Describing a person by pinpointing their economic class is a little bit like defining the Earth as a solid. There's just so much more to it than that.

Here, however, it might help to define our terms before we proceed with our discussion. So what kind of wealth does it take to get a person behind that velvet rope? What makes a one-percenter?

At the time of writing, Schwartz defines a middle-class income as belonging to the 40th-75th percentile in terms of wages, which turns out to be between $35,000 and $80,000 per year. The upper class is between $80,000 and $207,000 per year, and the top 1% would include people who earn $207,000 and up, with an average yearly income of about $1,305,000.

So those are the kinds of numbers we're dealing with here, but Schwartz is the first to admit that they don't take into account things like location, which would throw off these calculations quite a bit once you consider what $80,000 might buy you in New York City versus Brownsville, Texas.

All that being said, the main point is that upper-class consumers in all localities increasingly have access to a wider array of services and experiences that the "lower classes" of consumers simply do not. If you have the money to afford prestige medical care in New York, it's available to you, whereas "lesser" citizens have to wait to see the cheapest doctor available, when and if they are available. This gap in access is growing all the time, with no end in sight.

I will say that it's been my belief (strong, but loosely held) that it's much better for all of us if we lift people up, instead of tearing anyone down. For my money, I don't much care whether someone else can afford super-elite extra-special box seats at the Yankees game, just as long as the poorest among us don't have to starve. Am I taking crazy pills here? Or is this how you feel about it too?

Seeing someone else have more has never made my own life worse.

Where this becomes a legitimate problem, however, is that resentment concerning this state of affairs is also growing at an alarming rate, and resentment is a destabilizing force that threatens all of us.

Some people believe that the pie is limited and can't be made to grow any bigger, and so when they see others hogging more than their fair share, they resort to violent, aggressive action in order to rectify the situation. And that's the most dangerous problem with all of this, at least as far as I can see.

Give them their box seats and their expensive specialists and their private jets! They can have their guided tours of Disney World and their separate schools! But goddamn it, not while their fellow citizens - their fellow human beings - are deprived of all opportunity and of all hope.

#2: The Gutting of the Public Square

Witnessing exhibitions of the wealth of others doesn't make you worse off, but it feels as though it does, and the spread of that sentiment does make us all worse off as a society. Allow me to explain.

The growing divide between rich consumers and poor consumers creates a society in which neither "side" ever talks to one another, a nation in which we all slowly become strangers, never having a chance to empathize with anyone whose life experiences differ from our own, and with people who might have something to share with us that's more valuable than concierge travel services.

It erodes the fellow feeling we have for the people with whom we share the earth, and the erosion of that feeling is a threat to everyone, everywhere. Trust collapses, resentment builds, and before we know it, we have a massive society where no one knows anyone and no one has any interest in making anyone else's life go better.

That's the main thrust of the problem here. It's that in order to want to make things better, it has to matter to you whether those things improve at all. If you can just pay for a better school or a completely different experience somewhere else, you'll have no incentive at all to make any positive changes for anyone but yourself. And that's not a society that anyone should want to live in.

If you aren't spending any time in the places that are crying out to be improved, you won't care about what happens to them. "No funding for public schools?" you might ask. "That's too bad. My kids go to private school anyway. Good luck, though."

Furthermore, when you are deprived of the opportunity to interact with anyone outside of your "class," it becomes much easier to disregard or demonize the members of those "other" classes. This goes in both directions, by the way. The wealth gap rises, the empathy gap widens, and anger, resentment, and violence all rush in to fill the void.

#3: The Two Types of Envy

One of those moments when you feel as though you just have to put the book down and really think about what's been written occurred for me during Schwartz's discussion of envy. He posits that there are at least two kinds of envy: benign envy and malignant envy.

The former is a relatively healthy reaction to the success of others, where we feel inspired or motivated to improve our own situation and keep up with them or surpass them. We can sometimes feel benign envy when we see someone achieve something worthwhile that we'd like to achieve eventually as well.

Examples could be when we see a friend lose 100 lbs. and compete in their first marathon, and we think to ourselves, "I'm more disciplined than them - I can do that too!" Or when a colleague earns a coveted promotion and we start thinking of ways in which we could earn a similar promotion ourselves.

While it's certainly a step in the right direction - if their example motivates you to put forth an extra effort at work, start exercising in the morning before everyone else wakes up, or ask someone special out on a date - the basic, underlying emotion is still envy, which is never a positive force.

Malignant envy, in contrast, would be the desire to tear someone else down so that they end up having as little as we do. It's where we observe someone else's success and fulfillment and resent them for it; we wish they didn't have it more than we wish to have it for ourselves. We also might not mind not having it, just as long as they didn't have it either. That would be an example of malignant envy.

Personally, I fear that most people's reaction to hearing about the affluence and access attained by people beyond the velvet rope would be one of malignant envy, which is ultimately a more destabilizing force than benign envy. It tends toward the enaction of a "scorched earth" policy where wealth is concerned. A nation gripped by malignant envy is less concerned about lifting the velvet rope and more concerned with setting it on fire.

READ ALL THE KEY IDEAS HERE

Book Notes:

READ ALL THE BOOK NOTES HERE

Action Steps:

So you've finished reading. What do you do now?

Reading for pleasure is great, and I wholeheartedly support it. However, I am intensely practical when I'm reading for a particular purpose. I want a result. I want to take what I've learned and apply it to my one and only life to make it better!

Because that's really what the Great Books all say. They all say: "You must change your life!" So here, below, are some suggestions for how you can apply the wisdom found in this breakdown to improve your actual life.

Please commit to taking massive action on this immediately! Acting on what you've learned here today will also help you solidify it in your long-term memory. So there's a double benefit! Let's begin...

#1: Vote with Your Dollars

Any system can only survive with the support we give it, whether actively, through our direct involvement, or indirectly, through our tacit acceptance of the way things are.

If you don't approve of the current state of affairs, and the emphasis on appealing to affluent consumers at the expense of everyone else, you can simply withdraw your support. We can do this by "voting with our dollars," meaning only supporting businesses whose philosophies align with our own.

If you don't approve of what Amazon is doing in the global marketplace, buy your books at a local bookstore (and support your local bookstores anyway!). If you don't approve of the way certain companies treat their poorer customers, take your business elsewhere. The companies themselves may not notice you leave. But if enough people follow you, alarm bells will be raised.

This is easier said than done when you have kids who want to go to Disney World for vacation, for example. You may vehemently disapprove of the way that richer guests can just skip the line whenever they want, but your kids really want to go! You love them and want to give them an incredible experience they'll remember for the rest of their lives. What's to be done?

There may be nothing morally wrong with businesses specifically catering to customers who are willing to pay more, but you can design a different vacation. Plus, the time spent with your children is what matters, not where you take them or how much money you spend on them while you're there.

If you're still set on taking your kids to Disney World, however, perhaps you could pay for someone less fortunate to experience that same magic that you're willing to share with your own children. Pay to skip the line, sure. Pay for the best damn Disney World experience that money can buy if you want to - but pay for someone else to experience it as well. Maybe even a stranger.

A good personal spending rule some people live by is that if you can't afford to buy it twice, you can't afford it. Maybe if you can't afford to donate an equally elevated consumer experience to someone less fortunate, then you can't afford it either.

#2: Change the Culture

The wider culture is just made up of people. That's true whether it's your workplace culture, or on the scale of nations and civilizations. Customs and traditions only survive with the support of the dominant culture, and cultures can be changed. Perhaps not easily (or effectively) from the top down, but they can be changed.

One way is to actively shape your own culture and invite people who share similar values to join you. You can live your values with integrity while providing an opportunity for other people to live out those same values in a culture where that attitude is the norm.

This can be done on the level of personal relationships, neighborhoods, businesses, and more. Decide what's most important to you, live true to those values, and then create a safe place for everyone else who shares those values to express them openly, without fear of ridicule or derision.

Trying to change a culture from the top down has often resulted in disaster, and such an effort is rarely successful. But many people before you have successfully changed themselves, and that inward change often ripples outward and goes on to change the world.

#3: Focus on Giving

A major theme in my breakdown of The Velvet Rope Economy has been the idea that instead of trying to tear the rich down, we might instead think about trying to improve the lives and prospects of the poor. Changing the focus from taking to giving has always worked wonders in my own life.

More modest consumers even have something of a moral advantage over richer consumers because giving tends to mean more when you have less to give in the first place. I would respect someone who gave $100 out of $1,000 far more than I'd respect someone who "only" gave $100,000 out of $10,000,000.

So my humble advice here would be to focus on giving and giving even when you think you can't. Give when it's most difficult to do so. Always be on the lookout for opportunities to give rather than take, whether that's in terms of actual money or any currency that we all value, such as attention, respect, and compassion.

Even just one person making the conscious, intentional shift from taking to giving might not seem like much, but over time, and at scale, it literally changes the entire culture. When more people look for ways they can be of service, instead of ways to receive better service, the velvet rope is lifted and we inhabit this space together.

READ ALL THE ACTION STEPS HERE

"The path to success is to take massive, determined action."

-Tony Robbins

About the Author:

Nelson D. Schwartz has worked at The New York Times for a decade and has covered economics since 2012.

Before that, he wrote about Wall Street and banking for The Times and also served as European economic correspondent in Paris from 2008 to 2010. He joined the paper in 2007 as a feature writer for the Sunday Business section.

Schwartz is a graduate of the University of Chicago and worked for 10 years at Fortune Magazine before joining the Times. A native of Scarsdale, N.Y., he lives with his family on the Upper East Side of Manhattan.

Additional Resources:

Inequality is a "Big Business" | NPR Article

The Velvet Rope Economy | New York Times

Give-Well.org | Effective Altruism Charity

This Book on Amazon:

The Velvet Rope Economy, by Nelson D. Schwartz

If You Liked This Book:

Evicted, by Matthew Desmond

Regarding the Pain of Others, by Susan Sontag

The Status Game, by Will Storr

Not for Profit, by Martha Nussbaum

Real Help, by Ayodeji Awosika

Bullshit Jobs, by David Graeber

Enlightenment Now, by Steven Pinker

Excellent Sheep, by William Deresiewicz

Progress, by Johan Norberg

Spent, by Geoffrey Miller

OK, that’s it for now…

More excellent book recommendations coming your way soon!

Again, the rest of the above breakdown is absolutely free (for now!), and you can find it right here.

What you see in this email is less than half of what you get at the Stairway to Wisdom. I left out most of the Book Notes, all the Questions to Stimulate Your Thinking, several of the Key Ideas, etc.

So there’s a lot more for you left to read if you enjoyed what you read in this email!

With that said, I hope you enjoyed this edition of The Reading Life, and enjoy the rest of your week!

All the best,

Matt Karamazov

P.S. Whenever you're ready, here are three more ways I can help you apply the wisdom found in the greatest books ever written to your life:

1. You now have the option of working with me personally, and my first priority is to serve the people on my private email list. That’s you!

   Simply head to this page if this is something you're interested in working with me on, and I'll let you know more about it, answer all your questions, etc. Click here to apply!

2. I've released 50 complete, in-depth book breakdowns on the Stairway to Wisdom that respect both your time AND your intelligence and will help you become the person you've always known you were capable of being. Read them for free here.

3. Join The Competitive Advantage to be surrounded by a healthy and happy community of winners and high achievers. Weekly insights and ideas on building a strong mind, a fit body, and a healthy bank account. Sign up for free right here.