By Harold DeRienzo
Growing up in the 1950s, I was conditioned to believe that we lived in a classless society. This conditioning took place at home, in school, at church, and was constantly reinforced by the media. That certainly did not mean that classes did not exist, only that there were no supposed barriers preventing citizens with ambition and a strong work ethic from entering the middle class. Add a degree of special talent to ambition and work, and the upper class was also within reach. And for those who failed to enter the middle class? Obviously, these were the people who lacked initiative or were unable to overcome personal burdens or the temptation of life’s vices.
In the 1950s, the economy was different, to say the least. From a global perspective, the United States was the only industrialized country with full productive capacity. The dollar was king and as good as the 40% of the world’s gold supply that we possessed. Furthermore, our economy was decentralized. Nationally, we had a healthy agricultural sector defined by independent family farms and a strong and growing retail sector defined by small business. Executive compensation was a relatively small multiple of average wages. Productivity gains were shared more equitably between capital and labor, mostly due to unions that were able to force an industry-labor accord, which lasted until the early 1970s. That is not to say that there were no problems with the dominant paradigm, particularly when it came to the inner city and prevailing racism throughout this country. But our country had wealth based upon an economy that was sufficiently decentralized to allow a vision of increasing general prosperity, while preserving and promoting democracy.
Now, in the 21st Century, our economy has become concentrated, with wealth in the hands of a relative few. The top 10% of the population claim more than half of all the income generated in the United States. The top 1% own 40% of all the wealth in this country, and the top 5% own over 60%. Family farms are a quaint memory, with family owned retail businesses not so far behind. The union movement, with the exception of municipal unions, have been effectively destroyed. Almost all gains in productivity go to the top 5% of all earners. And since political power mirrors economic power, the concentration of wealth has resulted in the centralization of political power, threatening the very democracy we claim to cherish.
So, given this economic transition, it strikes me as peculiar to hear so much talk in Democratic political circles about protecting the middle class, or providing people with a path to the middle class. This rhetoric is anachronistic and incompatible with current socio-economic arrangements. A more appropriate understanding of current class structure would look something like the following:
The top class is the Elite Class. This class comprised of the 1 to 3% of Americans that own so much of this nation’s wealth and have such an inordinate claim on national income. This is the new aristocracy.
Directly below the Elite Class, is the Managing Class, the new bourgeoisie if you will. The Managing Class is broad-based, comprising the balance of about the top 20% of all earners. This is the class to which the best and the brightest have a good chance to belong. These managers manage everything from investments, to legislative reform, to managing the poor and maintaining our expansive penal system. Some of those in this class – those with extraordinary talent – have the opportunity to become part of the Elite Class, so there is some overlap. But primarily, the managers are trained to serve the needs of the wealthy, in promoting, expanding and preserving that wealth. And if the poor are effectively organized (think ACORN), they must be stopped. If the remaining government unions get in the way of a corporatist agenda (think Wisconsin), they must be overcome. And if the cultural conservatives need some red meat to ensure their continued, illogical, devotion to the modern Republican Party (think Planned Parenthood), then they must be attacked. This class is insecure as they own very little and that insecurity lessens their political effectiveness and makes them almost entirely beholden to the Elite Class, ultimately identifying with their interests and believing in their cause.
And the 80% at the bottom – those who own a mere 7% of all the wealth in the country – to what class do they belong? These are the people who never do well, or do well sometimes, or do well enough for a while until hard times occur. Their lives are unstable and constantly subject to change. They are socially atomized, politically powerless, economically marginalized, without sustainable roots, and totally dependent upon forces they have no control over. In short, these are the people who have always made up the working class. The only difference is that their participation in the economy is less important than ever, given the global reach of corporations and their ability to exploit labor in every corner of the world. As a result, this new working class is made up of an inordinate amount of surplus labor, making these citizens little more than neoliberal pawns in a global economy.
So much for a “classless society.”
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