Joe: Here’s a wild statistic for you. A 2016 study found that on an airplane, the mere act of forcing economy passengers to walk through the first-class cabin on their way to their seats doubles the odds of an air rage incident happening during the flight. Lewis: Whoa, really? So that feeling I get, that little twinge of resentment during the "parade of shame" past the giant reclining seats and champagne glasses, is not just in my head? It’s a measurable phenomenon? Joe: It’s measurable, and it’s explosive. And here’s the kicker: what if that feeling isn't an accident? What if it's a core part of the business model? Lewis: That is a deeply unsettling thought. Joe: It’s the central question in Nelson D. Schwartz's incredible book, The Velvet Rope Economy: How Inequality Became Big Business. It’s a book that, once you read it, you start seeing these invisible ropes everywhere. Lewis: And Schwartz is the perfect person to write this, right? He's not some academic in an ivory tower; he's a long-time, award-winning business reporter for The New York Times. He’s been on the ground, covering the financial crisis, Wall Street, all of it. He's seen this stuff happen. Joe: Exactly. He's not just theorizing; he's reporting on a hidden architecture of inequality that's being built all around us. And it all starts with that feeling we all know, that little spark of envy. So why on earth would an airline, or any business, risk that kind of anger? Lewis: Yeah, why poke the bear? It seems like a terrible idea to make your customers angry before the plane even takes off. Joe: Because, as Schwartz lays out, they're playing a very specific game. They’re trying to cultivate what researchers call "benign envy."

Lewis: Okay, "benign envy." That sounds like a friendly-sounding term for something that feels pretty bad. What's the difference between that and the regular, malicious kind? Joe: Malicious envy is when you see someone with something nice and you want to take it from them, or you want them to lose it. It's destructive. Benign envy is when you see that same nice thing and think, "I want that too. How can I get there?" It’s aspirational. And businesses have become masters at engineering that feeling. Lewis: They want us to want to be on the other side of the rope. Joe: Precisely. Schwartz tells this incredible story about Royal Caribbean cruise ships. Imagine you're on a cruise, it's lunchtime, and you're heading to the Windjammer Café, the big, crowded, all-you-can-eat buffet. To get there, the ship's layout forces you to walk right past another restaurant called the Coastal Kitchen. Lewis: Let me guess, the Coastal Kitchen is not a crowded buffet. Joe: Not even close. It has frosted glass doors, but you can peek inside. You see white tablecloths, waiters, calm sit-down service. It looks serene. So you walk up and ask for a table, and the host politely informs you that this restaurant is exclusively for guests in the Royal Suite Class or the top-tier Pinnacle loyalty members. Lewis: That is so calculated! They make you walk past paradise on your way to the food court. Joe: It's pure psychological architecture. And it works. Royal Caribbean's profits have skyrocketed. They've figured out that if they make the gap between experiences visible, but frame the higher tier as something you can earn or buy your way into next time, it doesn't just create resentment. It creates a powerful motivation to upgrade. It's the luxury goods playbook: create aspiration at the top so people will want to participate in the brand, even at the lower levels. Lewis: That reminds me of those Emirates ads with Jennifer Aniston in her own private first-class suite. I'm never going to fly in that, but it makes the whole airline feel more glamorous. Joe: That's exactly it. But sometimes the separation is less about aspiration and more about raw, physical exclusion. Schwartz takes us to the new Yankee Stadium, which opened in 2009. If you buy a ticket in the "Legends Suite"—we're talking a thousand dollars or more per seat—you don't just get a better view. Lewis: What else do you get for a grand? Joe: You get a separate entrance. You get a private dining room with gourmet food. And most shockingly, there is a literal, physical moat—a concrete trench—that separates the Legends seats from the rest of the stadium. It prevents anyone else from even getting close to the field near home plate. Lewis: A moat? Like a medieval castle? That’s not subtle. Joe: Not at all. And it changes the whole atmosphere. Mariano Rivera, the legendary Yankees pitcher, wrote in his memoir that the new stadium just doesn't have the same "frenzied cauldron of pinstripe passion" as the old one. The lifers, the regular fans, have been pushed back. Lewis: Okay, but isn't this just luxury? Rich people have always had nice things. They've had box seats and fancy cars forever. What's fundamentally different now? Joe: That's the million-dollar question, and it's where the velvet rope stops being about harmless perks and starts getting really dangerous. It’s one thing to pay for a better seat at a game. It's another thing entirely to pay for... survival.

Lewis: Survival? That's a huge leap from a baseball game. What do you mean? Joe: Schwartz presents this absolutely chilling example from the California wildfires. As fires raged through wealthy areas like Malibu, insurance companies like AIG and Chubb didn't just rely on public services. They deployed private firefighting crews. Lewis: Wait, private firefighters? Joe: Yes. These elite teams, sometimes former smokejumpers, were dispatched with one mission: to protect the multi-million dollar homes of their policyholders. Schwartz describes how these crews would roll up to a mansion, spray it down with fire retardant, clear the brush, and stand guard. Meanwhile, the house right next door, owned by someone with a different insurance plan, or no plan, might be left to burn to the ground. Lewis: That is horrifying. It's like a scene from a dystopian movie. That's not just a velvet rope; that's a firewall, literally. Joe: Exactly. And this is the core of the book's argument about the danger of this economy. This is the "opting out" phenomenon. When the wealthy can buy their own private, superior version of a public good—whether it's security, education, or even safety from a natural disaster—their investment in the public version plummets. Lewis: Of course. If you have your own fire department, why would you ever vote to increase taxes to fund the public one? You're completely insulated from the consequences of its failure. Joe: And this logic is seeping into every corner of our society. Take college admissions. It used to be that getting into an elite university was about grades and maybe a legacy connection. Now, it's an industry. Schwartz dives into the world of private college counselors, like the firm IvyWise. Lewis: Oh, I've heard of these. They help you polish your essay, right? Joe: That's the tip of the iceberg. For fees that can go up to $150,000, IvyWise, which is staffed by former admissions officers from top schools, doesn't just polish. They architect a child's entire high school career. They have a special coordinator who secures exclusive, high-profile internships for their teenage clients—things usually reserved for college students. They advise on what "unique" hobby to pick up to look "pointy" to admissions committees. Lewis: So they're essentially creating a perfect, manufactured applicant that a middle-class kid could never compete with. Joe: It's a different universe of preparation. And the data is damning. Schwartz cites research showing a child born into the top one percent is 77 times more likely to attend an Ivy League college than a child from the bottom fifth of American households. It's not just a thumb on the scale; it's a whole different scale. Lewis: So you have people buying their way into the best schools, and then buying their own private safety nets. It feels like society is fracturing into two separate, parallel worlds. Joe: That's the isolation the book talks about. We're losing shared spaces and shared experiences. Schwartz tells the story of the decline of middle-class retailers like Ruby Tuesday, while at the same time, dollar stores explode in struggling areas and ultra-luxury resorts like Blackberry Farm, with rooms starting at over a thousand dollars a night, thrive. We're sorting ourselves by income, and the result is that we no longer understand each other.

Lewis: It's a vicious cycle, then. The more the wealthy opt out of shared systems—airports, schools, even safety—the worse those public systems get from underinvestment. And the worse they get, the more incentive there is for anyone with means to pay to escape them. Joe: You've nailed it. That's the feedback loop that's accelerating this whole process. And Schwartz's ultimate warning is that this isn't just creating economic division; it's eroding the very idea of a shared public life, of a common good. He quotes a 19th-century economist, Jules Dupuit, who observed French railroads and said that companies "refuse the poor what is necessary" in order to "give the rich what is superfluous." Lewis: And when that superfluous gift is a private suite, that's one thing. When it's a private firefighter or a guaranteed spot at Harvard, that's something else entirely. It feels like the foundation of a fair society is cracking. Joe: It threatens the whole democratic project. If we don't share the same reality, how can we solve problems together? Lewis: So what can we even do? Is it hopeless? Are we just destined to live in this tiered society? Joe: Schwartz actually ends on a hopeful note. He argues this is not inevitable. He points to hugely successful, profitable companies that have deliberately chosen a more egalitarian path. His prime example is Southwest Airlines. Lewis: The airline with no assigned seats and no first class. Joe: Exactly. Their founder, Herb Kelleher, built the company on an ethic of mutual respect. He said his mother taught him that "every person and every job is worth just as much as any other person and any other job." They focused on efficiency and treating all customers well, and they've been the most consistently profitable airline in American history. It proves that you don't have to build your business on exclusion. Lewis: So it’s a choice. And as consumers, we can make choices, too. We can support the businesses that don't build their model on making us feel bad so we'll pay more. Joe: That's the power we have. To recognize the velvet ropes and, when we can, to walk away from them. Lewis: It really makes you wonder, where do you see velvet ropes in your own life? At the doctor's office, the local school, the grocery store? And when do they cross that line from a harmless perk to something much more corrosive? Joe: A question we should all be asking. Lewis: This is Aibrary, signing off.