Posts Tagged ‘class’

Joseph Stiglitz usefully explains that there’s more than one theory of the distribution of income. One theory, he writes, focuses on competitive markets (according to which “factors of production” receive their marginal contributions to production, the “just deserts” of capitalism); the other, on power (“including the ability to exercise monopoly control or, in labor markets, to assert authority over workers”).

In the West in the post-World War II era, the liberal school of thought has dominated. Yet, as inequality has widened and concerns about it have grown, the competitive school, viewing individual returns in terms of marginal product, has become increasingly unable to explain how the economy works. So, today, the second school of thought is ascendant.

I think Stiglitz is right: with the obscene levels of inequality we’ve seen emerge over the course of the past four decades, the notion of “just deserts” is being called into question, thereby creating space for other theories of the distribution of income to be recognized.

The only major problem with Stiglitz’s account is he leaves out a third possibility, an approach that combines a focus on markets with power, that is, a class analysis of the distribution of income (which the late Stephen Resnick begins to explain in the lecture above).

According to this class or Marxian theory of the distribution of income, markets are absolutely central to capitalism—on both the input side (e.g., when workers sell their labor power to capitalists) and the output side (when capitalists sell the finished goods to realize their value and capture profits). But so is power: workers are forced to have the freedom to sell their labor to capitalists because it has no use-value for them; and capitalists, who have access to the money to purchase the labor power, do so because they can productively consume it in order to appropriate the surplus-value the workers create.

That’s the first stage of the analysis, when markets and power combine to generate the surplus-value capitalists are able to realize in the form of profits. And that’s under the assumption that markets are competitive, that is, there is no monopoly power. It is literally a different reading of commodity values and profits, and therefore a critique of the idea that capitalist factors of production “get what they deserve.” They don’t, because of the existence of class exploitation.

But what if markets aren’t competitive? What if, for example, there is some kind of monopoly power? Well, it depends on what industry or sector we’re referring to. Let’s take one of the industries mentioned by Stiglitz: health insurance. In the case where employers are purchasing health insurance for their employees (the dominant model in the United States, at least for those with health insurance), those employers are forced to transfer some of the surplus-value they appropriate from their own employees to the insurance oligopolies. As a result, the rate of profit for the insurance companies rises (as their monopoly power increases) and the rate of profit for other employers falls (unless, of course, they can cut some other distribution of their surplus-value).*

The analysis could go on.** My only point is to point out there’s a third possibility in the debate over the distribution of income—a theory that combines markets and power and is focused on the role of class in making sense of the grotesque levels of inequality we’re seeing in the United States today.

And, of course, that third approach has policy implications very different from the others—not to force workers to increase their productivity in order to receive higher wages through the labor market or to hope that decreasing market concentration will make the distribution of income more equal, but instead to attack the problem at its source. That would mean changing both markets and power with the goal of eliminating class exploitation.

 

*This is one of the reasons capitalist employers might support “affordable” healthcare, to raise their rates of profit.

**The analysis of wage or consumer goods would be a bit different. But I don’t have the space to develop that here.

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The other day, in a conversation with a friend (who happens to be an avid reader of this blog), I was asked why I don’t write more about events in Brazil, especially the most recent coup. I explained that, while I have been following events there pretty closely, I simply didn’t have the time to do what I considered the appropriate amount of research to offer an analysis that offered something different from what I’ve been reading.

I did, however, suggest to them that, given the class nature of the coup, the first thing the new government would do would be to set about undoing the legacy of the Workers Party.

Well, as Jonathan Watts reports, that’s exactly what’s happening:

It is just a week since Michel Temer became interim president of Brazil, but his new centre-right administration already has begun scaling back many of the social policies put in place by Workers’ party governments over the previous 13 years.

Moves are under way to soften the definition of slavery, roll back the demarcation of indigenous land, trim housebuilding programs and sell off state assets in airports, utilities and the post office. Newly appointed ministers also are talking of cutting healthcare spending and reducing the cost of the bolsa familia poverty relief system. Four thousand government jobs have been cut. The culture ministry has been subsumed into education.

For the interim government and its supporters, these austerity measures represent sound fiscal management as they attempt to rein in the government’s budget deficit and restore market confidence in Brazil, which has seen its sovereign debt rating downgraded to junk status over the past year.

For critics, however, they represent a shift toward a neoliberal economic policy by the old elite that ousted elected president Dilma Rousseff, who is suspended pending her impeachment trial in the senate.

That, in the end, is what the coup was about: not eliminating corruption (which is how it’s been covered here in the United States) but changing the class content of the policies of the Brazilian government.

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Richard Hofstadter was wrong. American politics has always been about class. And this presidential election is no different.

Don’t get me wrong: American politics has always been about a lot of things (from nativism and racism to foreign entanglements and so-called cultural issues). But Hofstadter’s argument that “American political life has rarely been touched by the most acute varieties of class conflict” is just plain wrong. American politics has also always been about class and class conflict—about the class dimensions of U.S. economy and society, both quantitative and qualitative—including the “most acute varieties,” if by that we mean open and transparent, as against hidden behind other issues and themes.

Already in this campaign, we’re getting another lesson in the class dimensions of American politics.

Trump-incomes

Nate Silver, for example, dismisses the idea that Donald Trump’s candidacy is a “working-class” rebellion against Republican elites:

As compared with most Americans, Trump’s voters are better off. The median household income of a Trump voter so far in the primaries is about $72,000, based on estimates derived from exit polls and Census Bureau data. That’s lower than the $91,000 median for Kasich voters. But it’s well above the national median household income of about $56,000. It’s also higher than the median income for Hillary Clinton and Bernie Sanders supporters, which is around $61,000 for both.

While Thomas Frank makes it clear that, although America is still burning seven years after the so-called recovery began, the Democratic party establishment couldn’t care less.

The party’s leadership is largely drawn from a satisfied cohort that has done quite well in the aftermath of the Great Recession. They’ve got a good thing going. Convinced that the country’s ongoing demographic shifts will bring Democratic victory for years to come, they seem to believe the party’s candidates need do nothing differently to harvest future electoral bumper crops. The seeds are already planted. All that is required is patience. . .

In reality, Donald Trump is a bigot of such pungent vileness that the victory of the Democratic candidate this fall is virtually assured. Absent some terrorist attack … or some FBI action on the Clinton email scandal … or some outrageous act of reasonableness by Trump himself, the blowhard is going to lose.

This, in turn, frees the Democratic leadership to do whatever they want, to cast themselves in any role they choose. They do not need to move to “the center” this time. They do not need to come up with some ingenious way to get Wall Street off the hook. They do not need to beat up on working people’s organizations.

That they seem to want to do all these things anyway tells us everything we need to know about who they really are: a party of the high-achieving professional class that is always looking for a way to dismiss the economic concerns of ordinary people.

We already have a pretty good sense about how class politics are going to play out in this campaign: both major-party candidates (and the establishments that line up with them) are going to pretend they’re concerned about the economic issues that worry ordinary people—and then they’ll propose policies and strategies that do nothing whatsoever to resolve those issues.

In other words, they’ll play the class card and then deal from (and for) the top of the deck.

Class and air rage

Posted: 6 May 2016 in Uncategorized
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I just finished booking a couple of flights and, I’ll admit, I felt a bit of rage—at the exorbitant prices (notwithstanding low oil costs, because of increasing concentration in the industry) and the additional charges (as airlines find new ways of nickel-and-diming us to achieve even higher profits).

Apparently, I might feel even more rage when I actually got on those flights.

According to a new study by Katherine A. DeCelles and Michael I. Norton, published in the Proceedings of the National Academy of Sciences,

the modern airplane is a social microcosm of class-based society, and that the increasing incidence of “air rage” can be understood through the lens of inequality. . .Physical inequality on airplanes—that is, the presence of a first class cabin—is associated with more frequent air rage incidents in economy class. Situational inequality—boarding from the front (requiring walking through the first class cabin) versus the middle of the plane—also significantly increases the odds of air rage in both economy and first class. We show that physical design that highlights inequality can trigger antisocial behavior on airplanes.

That’s one way of looking at the problem of class, as an issue of physical and situational design.

An alternative is to see growing class differences themselves as a problem, which pervade all dimensions of society, including the modern airplane. And they simply can’t be designed away.

Yes, those class differences might cause incidents of rage. But, even more important, they can lead—within “economy class”—to radical criticism and the demand for real economic and social alternatives, in airplanes and in the wider society.

Class war in Britain

Posted: 29 April 2016 in Uncategorized
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A couple of days ago, I linked the 1989 Hillsborough disaster with the earlier attack on the striking Orgreave miners, since both groups were treated as the “enemy within.”

Suzanne Moore just did, too, arguing that the Hillsborough verdict shatters the fantasy that class war doesn’t exist in Britain.

It must be somewhat galling for those in power now to have to accept this ruling, for they do not hide their class contempt either. They have elevated it to actual policy: all schools must be modelled on the schools they went to, but with fewer resources. All hospitals must be run to make a profit. Taxes are for the little people. Those who don’t “get on” have only themselves to blame. An increasing range of theories come into play about why poor people are poor, which is never to do with lack of money but lack of civility. Or perhaps there is something wrong with their actual brains! Imagery of working-class people invariably invokes moral deprivation by showing a tendency to excess.

Social mobility, the supposed solution to all this, only allows the odd person to slip through the net. The middle class must simply hold on. Once there, one is required to be grateful (I am not) or merely chippy (I am). As I strain my ears to hear someone who talks like me on Radio 4 that isn’t in a drama about child abuse, I never know who I am to be grateful to.

Sure, class contempt works both ways, though it is impolite to show it except by gentle humour. Rage is so 1980s. We must not discriminate against the posh apparently, though class doesn’t really exist any more. As more and more people tell us it no longer matters, we see more and more of our creative stars were privately educated, that our leaders come from the same tiny enclave. Retro-feudalism.

This fantasy should be well and truly shattered by the Hillsborough verdict. This was a war crime committed in a war that was not then, nor is now, a figment of our imagination. Class war.

segregation

The United States is characterized by increasing class segregation—as both a condition and consequence of growing inequality.

top 10 percent

We all know that the share of income going to the top 10 percent has steadily increased since the mid-1970s (from an already-high 33.41 percent in 1976 to an astounding 49.85 percent in 2014). That’s because a tiny group at the top has been appropriating a growing surplus and then distributing a large share of it to the other members of the top decile.

Now we know, thanks to recent research by Sean F. Reardon and Kendra Biscoff (pdf), that rising income inequality in the United States has been accompanied by increasing residential segregation by income:

Income segregation has increased over the last four decades, and has continued to increase in recent years. In large metropolitan areas (the 117 metropolitan areas with populations of 500,000 or more), the proportion of families living in neighborhoods with median incomes well above or below the median income of their metropolitan area has grown rapidly since 1970. . .In 1970, only 15% of all families lived in such neighborhoods, while 65% lived in middle‐income neighborhoods. By 2012, over one third (34%) of all families lived in either rich or poor neighborhoods, more than double the percentage in 1970. Over the same time period the proportion living in middle‐income neighborhoods declined from 65% to 40%.

And, they admit, this growing class segregation is not going to be easy to break:

In an era of very high income and wealth inequality, families have very different resources to spend on housing, and the housing market responds to this inequality in ways that exacerbate segregation. Given the importance of neighborhood contexts for children’s opportunities, and for shaping the experiences of the affluent, rising income segregation will likely only further exacerbate the economic inequality that has produced it. This self‐reinforcing cycle—where inequality begets segregation and segregation fosters inequality—will be hard to break.

Let’s call it the vicious cycle of class inequality and segregation.

As Thomas B. Edsall explains, that vicious cycle is both caused and reinforced by fundamental changes in the American social order and political system: from the fact that the increasingly segregated well-to-do have found ways of supporting and taking advantage of key services (health, education, job search and other opportunities) to aid themselves and their own children to the fact that (as Bernie Sanders recently reminded us) the top decile has been able to exercise much more influence over politics and policy (through voting and political donations) than its share of the electorate would suggest.

And, as we’ve seen in recent months, the combination of inequality and segregation has exacerbated tensions within the Democratic Party:

The “truly advantaged” wing of the Democratic Party. . .has provided the Democratic Party with crucial margins of victory where its candidates have prevailed. These upscale Democrats have helped fill the gap left by the departure of white working class voters to the Republican Party.

At the same time, the priorities of the truly advantaged wing — voters with annual incomes in the top quintile, who now make up an estimated 26 percent of the Democratic general election vote — are focused on social and environmental issues: the protection and advancement of women’s rights, reproductive rights, gay and transgender rights and climate change, and less on redistributive economic issues. . .

Sanders’s extraordinary performance to date. . .points to the vulnerability of a liberal alliance in which the economic interests of those on the top — often empowered to make policy — diverge ever more sharply from those in the middle and on the bottom.

As the influence of affluent Democratic voters and donors grows, the leverage of the poor declines.

Meanwhile, the vicious cycle of class inequality and segregation makes the rich richer, everyone else poorer—and the yawning gap between them continues to grow.

high life

There are still some who believe we’re all in this together. But we’re not, not by a long shot.

When the economy is organized so that the surplus is pumped out of one group (whose wages are stagnant), appropriated by another group (the tiny group of capitalists who sit on corporate boards of directors), and then distributed to still another group (who do all that is necessary to make sure the surplus continues to flow), and the top 1 percent get to spend the expanding surplus it receives on all manner of luxury goods and services—well, you get what can only be described as the Second Gilded Age.

Today, ever greater resources are being invested in winning market share at the very top of the pyramid, sometimes at the cost of diminished service for the rest of the public. While middle-class incomes are stagnating, the period since the end of the Great Recession has been a boom time for the very rich and the businesses that cater to them. . .

While choices for the rich are expanding, the opposite is happening for poorer Americans, according to new research by Xavier Jaravel, a graduate student in economics at Harvard. One explanation, he said, is that there is more innovation among goods aimed at the wealthy, whether it is fancy cookware, natural cheeses or single malt Scotch. Downscale items like canned meat or tobacco see less innovation. . .

Even though this kind of pampering might be good for business, and delight those on the right side of the velvet rope, the gap between the privileged and the rest may ultimately leave everyone feeling uneasy, said Barry J. Nalebuff, a professor of management at Yale.

“If I’m in the back of the plane, I want to hiss at the people in first class,” said Mr. Nalebuff, who has advised many Fortune 100 companies. “If I’m up front, I cringe as people walk by.”

I suppose one can argue we’re all sailing on the same ship—but the ship is clearly organized into separate classes, and the doors between them are kept firmly locked.

Even as the ship itself sinks.