Introduction
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.
The
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.
Using data 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 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.
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.
The
Precariat
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.
Racism
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.
References
Robert A. Perrucci and Earl Wysong. The New Class Society, Rowman and
Littlefield, 1999 (the first of four editions).Peter 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/
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
