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The Velvet Rope Economy

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The Velvet Rope Economy

How Inequality Became Big Business


15 min read
10 take-aways
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What happens to a republic when even public amenities bend to serve the rich?

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New York Times economic specialist Nelson D. Schwartz explores the “velvet ropes” that businesses – and, increasingly, public institutions – erect to separate haves from have-nots. The have-nots suffer long lines and shabby treatment. The haves get fast lanes of such improved circumstances that they don’t notice or care about the dilapidation of services for everybody else. These socioeconomic fault lines isolate groups of people from one another – based on ability to pay – and fray the social cohesion that binds communities and creates broad support for their institutions.


“Velvet Rope” divisions pervade the economy, separating consumers into tiers according to how much they can pay for extra services.

After World War II, all Americans enjoyed basically the same amenities. The wealthy mixed with the less affluent. Now, the “Velvet Rope Economy” funnels more perks to the wealthy and isolates the poor. The affluent world is increasingly frictionless, while increased friction has become the daily norm for everybody else. The poor have fewer options and shabbier experiences. 

 For 90% of Americans, income has been flat since the 1970s. Income rose for the remaining 10%, and soared for the richest 1%, especially the top one-tenth of 1%. Wall Street demands constant growth, so businesses focus on the rich. Catering to the rich is easier than selling to a mass market. Profit margins per unit are larger, and businesses needn’t scale up. Using artificial intelligence (AI), companies target big spenders and shower them with perks.

Marketers encourage “benign envy” to drive customers to aspire for higher status and to spend more on perks. 

Marketers balance “benign” and “malicious” envy, since...

About the Author

Nelson D. Schwartz covers economics for The New York Times.

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