The Declining Middle Class; Help Wanted: We need Ideas
Just about all the ideas that have shaped societies up until the last 300 years were religious in nature, except for China. The first major secular ideology to make headway and last was liberalism, a doctrine first associated with a commercial class and then an industrial class in Europe in the 17th century.
In its infancy, liberalism did not imply democracy. For example, the Whigs tended to be the wealthy property owners in England and many classic liberals were suspicious of democracy: They believed that responsible political participation required two things: Education and property ownership. As a matter of fact, up until the end of the 19th century, participation was limited to those that met these requirements all throughout Europe. It was only until Andrew Jackson’s election in 1828 and his subsequent abolition of property requirements for voting, that democratic principles achieved a major victory here in the States.
In Europe, meanwhile, the exclusion of many from political power and the rise of the industrial working class, gave rise to Marxism. The Communist Manifesto was first published in 1848, the year that the revolution spread all throughout Europe, except for the United Kingdom.
And hence began a long competition between ideologies: The Communists were willing to forgo multiparty elections in favor of economic redistribution vs. Liberal democrats, who believed in expanding participation while maintaining a rule of law protecting individual rights, including property rights.
Marxism started to get undermined by the mere fact that many people rose from the working class into the middle class. Also, the size of the working class began a decline in the second half of the 20th century as services began to displace manufacturing in what were labeled postindustrial economies. Finally, a new group of poor and disadvantaged people emerged below the industrial working class – a mixture of racial and ethnic minorities, recent immigrants, and socially excluded groups, such as women, gays, and the disabled.
Marx believed that the middle class would always remain a small and privileged minority in modern societies. What has happened instead is that the middle class has exploded to constituting the majority of populations of most advanced countries, thereby posing problems for socialism. For a long time, popular thinkers have believed that a stable democracy rests on a broad middle class and that societies with extremes of wealth and poverty are susceptible either to oligarchic domination or populist revolution. When much of the developed world succeeded in creating middle-class societies, the appeal of Marxism vanished.
There is a broad correlation among economic growth, social change, and the health of liberal democratic ideology in the world today. There is no rival ideology looming on the horizon but there are some very troubling economic and social trends, that, if they continue, will threaten the stability of contemporary liberal democracies and possibly dethrone democratic ideology as it is now understood.
For instance, in the United States, median incomes have stagnated in real terms since the 1970′s. This situation has been abated by the emergence of two income earners per household. Also, Americans of this generation have been living with subsidized mortgages for low-income households which is a highly dangerous method of redistribution. This has been brought about by the flood of money from China and has given the U.S. a false sense of security. An illusion that the standard of living was rising. The huge housing bubble that burst was but a correction, however cruel. We enjoy relatively cheap cell phones, clothing, and Facebook, but we can’t afford health insurance, pensions, or our homes.
Another key factor that gnaws at the middle class is technology. Technology is great, we enjoy it, but it takes our jobs away and ultimately, it could take our way of life away. In 1974, the top one percent of families took home nine percent of GDP; by 2007, that share had increased to 23.5 percent. This is due to the disproportionate number of people that have reigned in technology because of their standing in society. They are most talented and well-educated, but their activities cause massive inequality. Every great advance for Silicon Valley likely means a loss of low skill jobs elsewhere in the economy, a trend that is unlikely to end anytime soon.
Don’t misunderstand me, inequality has always existed, a s a result of nature and talent and character. But today’s tech world vastly magnifies those differences.
The last factor that undermines middle-class incomes is globalization. Transportation and communication is cheaper and to put it succinctly, things can be performed elsewhere far cheaper than they can here. It’s inevitable that jobs will continue to be outsourced.
Smarter ideas and policies could have and might still contain the damage. Germany has succeeded in protecting a significant part of its manufacturing base and industrial labor force. But the U.S. and United Kingdom happily embraced the transition to the postindustrial service economy. Free trade became the ideology. When some in Congress tried to retaliate with trade sanctions against China for keeping its currency undervalued, they were charged with protectionism. So our leaders simply capitulated and sold us down the river.
So, where do that leave us? Well, for my brothers and sisters on the left, it leaves us without ideas. Hence, the title: Help Wanted: Ideas Needed. The only ideas being leveled now are from the right – by the Tea Party, God Forbid. The Tea Party serves the interests of those we rail against, the privileged few.