This is a bit confused. The professional/managerial class, the high-paid salary receivers, do have skin in the game. When the economy tanks, the professionals get laid off, and the young people trying to enter the professions find that there are no jobs (think about how the legal profession got murdered in the 2008 crash, or about how the tech professions got murdered in the first dot-com crash, or about how many highly-paid corporate managers who have worked their ways up the ladder get laid off and can never find nearly as good jobs again in every single economic crash).

This is why human capital economics exists. To make sense of the idea of people making risky investments in human capital that might pay off down the line. Going to get a law degree or a PhD is a large time and money investment with the downside risk of there being no stable job at the end — a downside risk countless recipients of those degrees have suffered in recent years, witness the enraged howls of angry adjunct professors and unemployed lawyers — and the upside risk of things like tenure or a partnership in a big law firm.

Paul Krugman doesn’t have skin in the game, sure. But Paul Krugman is the kind of superstar you described at the beginning of this post. He won a fucking Nobel Prize (or the economists facsimile thereof), for chrissakes.

You know who else doesn’t have skin in the game? Donald Trump. Or, for that matter, any number of other rich entrepreneurs, from Peter Thiel to Elon Musk (are there any left outside of Silicon Valley?). Because no matter how badly their businesses do, they have all by now developed a nice fat pile of capital to rest on. They’ve all sold stock and diversified — do you think Mark Zuckerberg would be in the soup kitchen if Facebook collapsed tomorrow? Or would he just live off the earnings of the capital he’s already accumulated, secure in the 1% for the rest of his natural life, just like Trump and all the rest?

Seen from that perspective, the entrepreneurial classes and the professional/managerial classes are exactly identical. The very highest-performing members of each class are effectively insulated from economic change — absent total social collapse, neither Mark Zuckerberg nor Paul Krugman is ever going to be on a bread line. But aspirants to those classes, and less high-performing members of those classes, are subject to risk all the time.

At most, what you might be able to say is that there are more people in the relatively insulated group in the professional/managerial class than in the entrepreneurial class: there are lots more big law firm partners or tenured professors at financially stable universities than there are successful entrepreneur/investors who have accumulated enough capital to be insulated from risk. But if that’s true, is that because more people enter those classes?

Edit: it might be fair to say that some members of the professional/managerial have less skin in the game relative to their *personal performance* — for entrepreneurs, doing and saying stupid things is more closely related to getting wiped out than for professional/managerial types — an economist can have a whole career of saying stupid things and not get wiped out. But, again, I think that’s only really the most lucky few in each class. There are and general rich people with inherited wealth (Paris Hilton, Donald Trump) who can also make lots of stupid decisions and not get wiped out, and there are lots of economists (those without tenure) who have to be at least a little bit productive, at least enough to trick peer-reviewers, or end up in the unemployment line.

Perhaps I’m wrong. Perhaps professional/managerial types are systematically more insulated from downside risks than entrepreneur types — more insulated than their much lower chance of billionaire-level windfall upsides would normally entail. (An important caveat — of course we’d expect it to be harder to get totally wiped out in a life path where it’s also harder to get incredibly rich; if it wasn’t, then the graduate schools of the world would empty out and everyone would be starting businesses.) But if your argument is based on that claim, some data would be nice.