Posts Tagged ‘class’

Class war in Britain

Posted: 29 April 2016 in Uncategorized
Tags: , , ,

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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.

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It’s impossible to defend the grotesque—and growing—levels of inequality that characterize U.S. capitalism.

But, as they have throughout American history, some people still try. Their most common argument is that there’s nothing wrong with unequal outcomes as long as there is equal opportunity.*

Hmmm, not so much.

A recent study by a team of researchers led by Stanford economist Raj Chetty (pdf)—summarized and analyzed by Ben Casselman and Andrew Flowers—confirms that “where you come from. . .plays a major role in determining where you will end up later in life.”

Your starting point determines, for example (as in the figure above), how likely you are to have a job at age 30. Children from poor families are much less likely to work in adulthood than children from middle-class and upper-class families. Only about 60 percent of children from the poorest families are working at age 30, compared with more than 80 percent of children from higher-income families.

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It also determines your income at the age of 30: there’s a steady increase in income until the top few percentiles of parental income, when it spikes.**

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And, finally, it determines where you end up in the distribution of income (as the chart above measures not dollar incomes, but household income by percentile). Children from the richest 1 percent of families end up being, on average, in about the top third of households at age 30, while children from the poorest 1 percent of families end up in the bottom third at age 30.

It’s clear the United States suffers from an obscenely unequal distribution of income and wealth. It’s also characterized by a profoundly unequal distribution of opportunities.

 

*That line of argument suffers from three main problems: First, it presumes inequality only affects individuals, not society as a whole. In other words, it overlooks the effects of the concentration of income and wealth in the hands of a small group of individuals in terms of their ability to decide what happens not only in their own lives, but in the rest of society. Second, even if perfect mobility existed, making it to the top would still mean there’s a an even larger group at the bottom; that is, the existence of equal opportunity doesn’t undo or overturn the existing class structure. Third, it overlooks the extent to which unequal outcomes actually contribute—via household and neighborhood effects, government policy, education, and so on—to making equal opportunity an even more distant fantasy.

**As Casselman and Flowers explain, “This measures only wage and salary earnings, so it doesn’t factor in any other advantages these young adults might have, such as trust funds, lower student debt, or parental help with housing or other expenses.”

SWZ8i

In the summer of 2014, Ta-Nehisi Coates made headlines by announcing that he had changed sides and was now in favor of reparations to African-Americans (accompanied by an explanation of why, in contrast to four years earlier, he had changed his mind). Two weeks ago, Coates made headlines again by criticizing Bernie Sanders for opposing “reparations for slavery” (accompanied, a week later, by a defense of his critique of Sanders).

Needless to say, this is a sensitive debate, one that over time might contribute to the development of a progressive movement in the United States but also one that, at the present moment, threatens to undermine the fragile foundations of that movement. So, I want to step lightly and, instead of taking a firm position, merely raise a few issues for further discussion.

Chicago

The first point I want to make is that, notwithstanding the title of his original article in The Atlantic, Coates did not make a cases for reparations. He did make a case that the history of American democracy and capitalism is a profoundly racialized history, which stretches back to slavery, continues through the Jim Crow era, and persists to the present. It’s a history this nation persists in overlooking or forgetting—and its effects are profoundly present both in memory and in daily life today. No matter how many times we imagine a post-racial society, we are reminded of the racial disparities and injustices that have accompanied the emergence and development of all of our major economic, political, and social institutions. Coates’s essay provides eloquent testimony to at least some of that history—including, of course, the stark racial segregation of my own city.

But we also have to recognize the fact Coates did not make a case for reparations per se. Nowhere in his essay does he explain how a payment, no matter how large or small, from the United States government to the descendants of African and African-American slaves will actually undo the enduring legacy of racism in the United States.

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True, there’s an enormous racial wealth gap in the United States—between, for example, median white households and African-American (by a factor of 12) and Hispanic (by a factor of 10) households. Much of that wealth is in the form of housing. But that’s not where the bulk of the wealth in the United States has been accumulated. Rather, we’ll find it in the hands of a small group of wealthy individuals and large corporations—and reparations to the descendants of slaves will do little to close the gap between those at the top and the bulk of individual (whether African-American, Hispanic, or white) households.

Now, to give Coates his due, perhaps he is more interested in the investigation of the consequences of that racist legacy, a public airing and discussion that would be provoked by a full-scale debate about reparations (which would come from passing Congressman John Conyers Jr.’s HR 40, the Commission to Study Reparation Proposals for African Americans Act), and that’s fine. Let us, as a nation, finally come to grips with both the history of American racism and of the racial disparities and injustices that are so much a part of our recent history—from discriminatory subprime mortgages through unequal rates of unemployment and incarceration to racially biased police violence.

Or, alternatively, Coates might reframe the debate about reparations and begin to write about who actually gained from racist policies and practices over the course of U.S. history. If he did, he’d end up with a very small group of slaveowners, landowners, and capitalists (along with a larger, but still relatively small, group of overseers, merchants, and managers) who benefited from the labor performed by a much larger group of slaves, sharecroppers, and wage-workers. He might also add the institutions—including many colleges and universities—that grew from the proceeds of slavery and the slave trade, sharecropping, and capitalist enterprises. Those are the groups and institutions he might want to look at for reparations.

But, if he did, Coates would also discover that the wealth accumulated by a tiny minority of those at the top stemmed from activities that have also employed white (and Hispanic and other) tenants and workers. They’ve all been plundered—whether at work and in attempting to secure adequate housing, by private employers and bankers and through government policy—and, in that sense, are all due reparations.

No, it certainly hasn’t been the same—the same treatment, the same outcomes—for different racial and ethnic groups. Not by a long shot.

The problem is, reparations might not solve that problem of social theft for any of those groups, as it took place over the course of U.S. history and as it still exists today. In fact, we have to recognize, those gaps are getting larger—for whites, blacks, Hispanics, and everyone else.

As I see it, nothing short of a radical change in the way our economy is organized will overcome those gaps. That’s what conservatives and liberals have no interest in but is exactly what Coates and Sanders should be talking about—with one another and with everyone else in the country as this political campaign moves forward.

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The folks at BlaqSwans [ht: sm] set out to map what they consider to be the emerging post-capitalist paradigm associated with peer-to-peer movements and some of the key thinkers, both precursors and current influences, of those movements.

Here are the three things they confirmed when they assembled the map:

  • There is much more to this transition that the greenwashing offered by Uber and Airbnb, which are actually not peer-to-peer. This is precisely why we deliberately reused the shape of a honeycomb popularised by the “Collaborative Economy Honeycomb” infographic. It lists startup companies claiming to be part of that ‘sharing economy’, when many really are unbridled capitalism trying to further optimise the existing ‘selling economy’ – nothing wrong with selling but let’s not call it ‘sharing’ with the ethical claims usually attached to it.
  • The intellectual work of theorising this new economy has now reached a critical mass that is too often overlooked by ‘mainstream’ economists, observers, and policy makers who treat it as fringe.
  • Put together, the practical initiatives run at the grassroots level offer a credible sustainable alternative contradicting the eventual perception that the post-capitalist paradigm is a utopia dreamt up by isolated hippies. On the contrary, it is now possible to shop food regularly outside of mass retailers’ distribution networks, it is possible for a major French city like Grenoble, or Barcelona in Spain to be run by grassroots movements, and it is possible for farmers to produce in a biodynamic and commercially viable way to escape the vicious cycle of pesticides and high yields.

While the Community Economies Collective is not cited as an influence, there is a great deal of overlap between their work and the post-capitalist paradigm mapped above.

BlaqSwans also mapped what they consider to be the current capitalist paradigm in the following way:

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The two maps are a very good start. However, I’d like to see more attention to issues of class, especially the way the surplus is appropriated, distributed, and utilized within the current capitalist paradigm and how the problem of the surplus is being managed differently within the emerging postcapitalist paradigm.

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John Lennon (on the B side of “Imagine”) thought that life was hard, “really hard.” I can understand that.

But is modeling inequality really all that hard?

Paul Krugman seems to think so, at least when it comes to the size or personal distribution of income. That’s his excuse for why mainstream economists were late to the inequality party: they just didn’t know how to model it.

And, according to Krugman, not even Marx can be of much help.

Well, let’s see. It’s true, Marx focused on the factor distribution of income—wages, profits, and rent, to laborers, capitalists, and landowners—because his critique was directed at classical political economy. And the classical political economists—especially Smith and Ricardo—did, in fact, focus their attention on factor shares.

That was Marx’s goal in the chapter on the Trinity Formula: to show that what the classicals thought were separate sources of income to the three factors of production all stemmed from value created by labor. Thus, for example, laborers received in the form of wages part of the value they created (“that portion of his labour appears which we call necessary labour”); the rest, the surplus-value, was divided among capitalists (“as dividends proportionate to the share of the social capital each holds”) and landed property (which “is confined to transferring a portion of the produced surplus-value from the pockets of capital to its own”).

It is really just a short step to show that, in recent decades (from the mid-1970s onward), both that more surplus-value has been pumped out of the direct producers and that investment bankers, CEOs, and other members of the 1 percent have been able to capture a large share of that mass of surplus-value. That’s how we can connect changing factor (wage and profit) shares to the increasingly unequal individual distribution of income (including the rising percentage of income going to the top 1, .01, and .001 percents).

See, that wasn’t so hard. . .