THIS ESSAY WAS WRITTEN AT THE OUTSET OF TRUMPISM AND THE BRAZEN RISE OF WHITE SUPREMACIST MOVEMENTS. ALSO IT WAS WRITTEN AT A TIME WHEN SOCIAL MOVEMENTS, INCLUDING THE BERNIE SANDERS CAMPAIGN, HAD CAPTURED THE IMAGINATION OF MANY YOUNG PEOPLE, PEOPLE OF COLOR, IMMIGRANT ACTIVISTS AND OTHERS. MOST RECENTLY GEORGE FLOYD WAS MURDERED BY POLICE AND THE COVID 19 PANDEMIC EXPOSED TO ALL THE FAILURES OF OUR ECONOMIC AND POLITICAL SYSTEM. WHILE CHANGES ARE OCCURRING AT BREAKNECK SPEED THE ANALYSIS OF CAPITALISM AND THE ENVISIONING OF SOCIALISM DESCRIBED BELOW SEEM STILL RELEVANT, EVEN AS WE APPROACH THE NOVEMBER, 2020 ELECTIONS.
The twenty-first century economic reality has created a new class society with a dominant class of concentrated wealth at one extreme and a growing class of economically insecure in the other. More and more of those in the latter have become political activists, particularly among the young. This new class society in the United States parallels similar economic changes in both rich and poor countries. As a result of the changes in global and domestic economies social movements have arisen everywhere. From Cairo, Egypt to Madison, Wisconsin, from Greece to Chile, from Syriza and Podemos to the Sanders campaign, the cry for change, often a demand for socialism, is spreading. The outcome of this new activism is unclear but for the first time in a long time, the prospects for positive social and political change look promising.
New Class Society
In 1999, Robert Perrucci and Earl Wysong published the first of four editions of a perceptive sociological analysis that identified what the authors identified as “the new class society.” They employed a Marxist and Weberian analysis of class that combined workers’ relationships to the means of production with their organizational position.
reflecting their synthetic definition of class, these authors concluded that
the popular portrait of a U.S. class system consisting of a small ruling class,
a large “middle class,” and a small percentage of economically and politically
marginalized people was, by the 1970s, no longer an accurate way to describe
society. The class system of the days of relative prosperity from the 1940s
until the late 1960s, which looked like a diamond with a broad middle, had
become a class system looking like a “double diamond.”
In the new class society, the first diamond, the top one, consists of the “privileged class” composed of a “super-class,” “credentialed class managers,” and “professionals.” All together these representatives of privilege constitute about 20 percent of the population. All the others constitute a “new working class,” some living in relative comfort but most engaged in wage labor with the constant threat of job loss and wage stagnation, some modestly self-employed, and a large part-time labor force. This is the second diamond representing 80 percent of the population.
In short, the political economy that emerged nearly fifty years ago is one in which a shrinking ruling class that owns or controls capital has accumulated enormous wealth and dominates today’s economy. At the other end an increasingly insecure working class in terms of jobs and income has grown exponentially.
Peter Temin, an MIT economist, confirms the earlier sociological work in his new book “The Vanishing Middle Class.” This book also identifies an emerging two-class society with wealth and power concentrated at the top and poverty and powerlessness at the bottom. In what Temin calls the “dual economy,” the ruling class consists of the finance, technology, and electronics sectors (FTE), representing the top twenty percent as opposed to “the low wage sector;” clerks, assemblers, laborers, and service workers who provide the comforts and profits for the top twenty percent.
In summary, both volumes suggest that in terms of wealth and power conflicts of interest have to be seen not between the one percent and everyone else but between the twenty percent who own/control/ or administer the capitalist system and the eighty percent who constitute increasingly marginalized labor serving the interests of the wealthy and powerful.
Guy Standing, a British economist, has written about the “precariat,” a growing portion of the worldwide work force, Temin’s “ low wage sector,” who live in economic insecurity. The term, precariat, refers to a synthesis of the idea of the proletariat, workers who sell their ability to provide labor to a capitalist for a wage, and precarity, or economic existence that is unpredictable, marginal, and insecure. Job scarcity and wage stagnation increasingly is experienced by workers with professional skills and credentials as well as the traditional working class.
Standing argues that all across the globe workers, particularly young workers, live in situations of economic insecurity and unpredictability, irrespective of credentials, that in the past guaranteed jobs and living wages. Of course, the precariat do not have any of the guarantees of union membership and their skills leave them often working on a part-time contract basis and in isolation from fellow workers. In addition the precariat include workers in the “informal sector.” These are workers who often will do anything to survive from day to day: for example, day labor, street vending, drug dealing, petty crime, or prostitution.
Accumulation by Dispossession
David Harvey, a Marxist geographer, revisited Marx’s description of primitive accumulation in his book, “The Seventeen Contradictions of Capitalism.” Capitalism was created on the backs of slaves, the slaughter of indigenous people, and the expropriation of already occupied land. In other words, through kidnapping, forced labor, slaughter, and occupation, capitalism was born. The expropriation of resources, people, and land led to the accumulation of wealth that spurred development and growth.
Harvey then argues that the primitive accumulation of the fifteenth century is similar in outcome to the “accumulation by dispossession,” of the twenty-first century. Today workers lose their property and their personal income in a debt system that sucks their scarce earnings and property. Examples include defaults on mortgage loans and bank repossessions and governmental decisions to confiscate property for purposes of urban redevelopment. Accumulation by dispossession, while not as violent as in the era of primitive accumulation, has the same outcome: expropriating the value of the work of the many for the riches of the few.
Growing Economic Inequality and Urban Decay and Gentrification
Virtually every study of the distribution of wealth and income in the United States demonstrates a dramatic increase in inequality. Also studies sponsored by international organizations report that despite declines in worldwide absolute poverty, the trajectory of growing inequality in wealth and income is a central feature of the global economy. In addition, declining inequality between countries, such as that between China and the countries of the European Union, have occurred while inequalities within these countries have widened. In the United States income and wealth inequality which declined from the 1930s until the 1960s has returned to levels not seen since the 1920s.
The patterns of inequality are visible in geographic spaces as well. As more and more people are forced to migrate to cities, what Mike Davis calls “global slums,” demarcations of areas of opulence and poverty become visible. Members of the top twenty percent are consumers of expensive living spaces, elite schools, and vibrant recreational facilities. They also lobby for public funds to create recreational attractions that entice tourists to bolster local economies. Gentrified city spaces are protected by fences and police.
On the other hand, the bottom eighty percent live in varying degrees of poverty. Housing stocks crumble, neighborhoods are overcrowded, public services are increasingly underfunded, and populations are left to lead lives of quiet desperation and intra-community violence. In the new class society different sectors of the population live in isolation from each other, except when political conflict and violence spread across communities.
Also in the new class society youth become pessimistic about their futures. Despite the fact that media and academic studies claim that upward mobility is tied to scholastic achievement, the schools they attend are underfunded. And the cost of higher education, the main source of credentialing the young, has become prohibitively expensive. For those who accumulate massive student debt the experience feels like a modern-day variant of indentured servitude. Jobs for those who do not attend college are scarce and reside primarily in the low-wage service sector. And so-called STEM jobs (science, technology, engineering, and mathematics) are not as plentiful as college promotional brochures suggest. Along with the precarity of the traditional working class is a rising precarity of a new working class of highly educated but unemployable young people.
Manning Marable published a perceptive essay in 2006 entitled “Globalization and Racialization.” In it he adapted, based upon the twenty-first century global political economy, the prophetic statement by W. E. B. Du Bois that the problem of the twentieth century was the color line. Marable suggested that the new global political economy was based upon capital flight, as well-paid manufacturing jobs left the United States for sweatshops in the Global South. Unemployment increased in the United States. Downward pressures on wages and benefits paid workers in poor countries reduced the economic conditions of US workers. The decline of organized labor in the United States and the Global South weakened the bargaining position of workers everywhere.
Marable suggested that the people most vulnerable to the massive changes in the global economy were the already marginalized people of color. Unemployment rates in poor and Black communities skyrocketed, particularly among youth. The new gentrification and shift in politics from welfare state capitalism to austerity led to declining public services in poor communities. This has had particularly devastating impacts on educational institutions.
With declining economic opportunities, a growing sense of hopelessness, draconian government policies such as the wars on drugs and crime, literally millions of African Americans, and other people of color, have become victims of mass incarceration, what Michelle Alexander calls “The New Jim Crow.” Finally, many states have laws that prevent former felons from voting. The Marable framework, which he refers to as “global apartheid” and “the New Racial Domain,” thus links globalization of production to racism; particularly growing unemployment and urban decay, criminalization, mass incarceration, and voter disenfranchisement.
Neoliberalism: the Latest Stage of Capitalism
The so-called “golden age of the US economy,” 1945 to 1968, may have been an anomaly in American history. The United States emerged from World War Two as the economic and military hegemonic power. The war led to a fourfold increase in United States trade compared with the late 1930s. In 1945 it produced about 2/3 of all the industrial goods manufactured in the world and US investments constituted about ¾ of all the world’s investments. With fears of stagnation accompanying the war’s end, the Truman Administration launched a massive program of military investment to forestall declining demand for US goods and services.
In terms of international relations, the United States played an instrumental role in establishing powerful international economic institutions, such as the International Monetary Fund and World Bank. It helped rebuild an anti-communist Europe through a massive financial aid system. It later established foreign assistance programs for newly “independent” countries requiring their commitment to the maintenance of a global capitalist system.
At home a United States economy was created that stimulated high mass consumption. People were socialized to believe that their self-worth was determined by the quantity and quality of goods and services they consumed. The new communication medium, television, educated viewers as to the products that were available (as well as the enemies overseas who were the threat to the domestic consumer society).
However, by the late 1960s, markets were glutted and demand for goods lessened even though wages and benefits for some workers increased. Federal and state governments had been increasing services such as education, health care, and transportation. Both profit rates and consumer demand declined. Growing political protest against the Vietnam war and racism across the country added to emerging economic stagnation.
By the 1970s, the squeeze on profits and reduced demand, was exacerbated by Middle East wars and large increases in the price of oil, which made some corporations and banks richer while economic stagnation, including both high inflation and unemployment, ensued. At this point, the United States economy began a shift to what David Harvey calls “financialization.” A small number of banks and corporations, mostly US but also European and Japanese, began to shift from encouraging manufacturing growth to financial speculation. A “new” debt system was encouraged, one in which oil-poor countries borrowed more and more money from bankers to pay for continued oil imports. In exchange debtor nations would promise to carry out new economic policies at home: cut government spending, privatize public institutions, deregulate domestic economies, and shift economic activities from production for domestic use to production for sale in the world market.
Thus, the new era of “neoliberal globalization” was initiated. The new system was driven by financial speculators, declining autonomy of nation-states, and the downsizing of wages and benefits everywhere. At the same time rates of profit for speculators increased and smaller numbers of banks and other financial institutions increasingly dominated the global economy. This system was initiated in the Global South, spread to Western Europe and after the fall of the Soviet Union and its allies to Eastern Europe. In the 1980s neoliberalism was embraced by Prime Minister Thatcher in Great Britain and President Ronald Reagan in the United States. The best way to characterize policy in the age of neoliberal globalization is “austerity,” reducing the economic opportunities of the many for the benefit of the few.
Neoliberal globalization is the systemic source of the new class society (or the dual economy), the rise of the precariat, accumulation by dispossession, growing inequality and urban gentrification, and the expansion of racism.
A Revitalized Interest in Socialism in the Twenty-First Century
As history has shown, the accumulation of wealth and power by ruling elites, or dominant classes, never goes unchecked. The drive for domination breeds resistance. And resistance takes many forms: traditional revolutionary practices, building alternative economic and political institutions, non-violent refusal to obey the institutions that support economic misery and political repression, and where practical, participation in electoral processes. Social change is many-sided and several strategies together are most likely to bring positive results.
History shows also that struggles for change are broadly political, require organization, mass mobilization, and education. Change requires analyses of the causes of the problems needing solution and a vision of what a better future might look like. And there is an inextricable connection between the causes of the problems, the tactics needed to change the situation, and a vision of a better society.
The analyses above highlight the changing character of the global political economy, emerging class structures, and the growing vulnerabilities of literally millions of people: young and old: Black, Brown, and White; female and male; gay and straight; and at all levels of education and training. At the root of the problem is the capitalist system, a system whose reason for being is the maximization of profit. People today are talking about a new society, a socialist society. Socialism implies a political economy in which people contribute their talents, their labors, for the public good and share equitably in the product of their labor. And socialism presumes democratic participation in work places, the political system, and the community.
Robert A. Perrucci and Earl Wysong. The New Class Society, Rowman and Littlefield, 1999 (the first of four editions).
Temin, The Vanishing Middle Class: Prejudice and Power in a Dual
Economy, MIT Press, 2017.
Victor Tan Chen, “The Dual Economy,” Working Class Perspectives, https://workingclassstudies.wordpress.com/2017/07/24/the-dual-economy/
Guy Standing, The Precariat: The New Dangerous Class, Bloomsbury Academic, 2014.
David Harvey, Seventeen Contradictions and the End of Capitalism, Oxford University Press, 2015.
Mike Davis, Planet of Slums, Verso, 2017.
Harry Targ, Challenging Late Capitalism, Neoliberal Globalization and Militarism, Lulu.com, 2006.
Manning Marable, “Globalization and Racialization,” ZNET, zcom.org, March 2, 2009.
Various articles on political economy, social movements, peace and justice in Harry Targ, Diary of a Heartland Radical, www.heartlandradical.blogspot.com