The ‘Middle Class’ Is Ideological santorum

Today’s treat is courtesy of Jillian Rayfield, “Santorum: Term ‘Middle Class’ is ‘Marxism Talk’,” Salon, August 16, 2013.

In a rare moment, I agree with Rick ‘Google Problem’ Santorum about the term “middle class,” but for the exact opposite reasons. In the video in the link, the former senator says:

“Since when in America do we have classes? Since when in America are people stuck in areas, or defined places called a ‘class’? That’s Marxism talk. When Republicans get up and talk about ‘middle class’ we’re buying into their rhetoric of dividing America. Stop it. There’s no class in America, and call them on it. America is a place where everybody has the opportunity to succeed. We believe in everybody. We are the party that values the dignity of every human life. Not them.”

Okay … I’ll just call 2016 for the Democrats right now, save for the exceptional candidate meltdown. Wake me up when a real presidential election comes along. (Cue the Rumpelstiltskin Rip van Winkle jokes.)

The Salon article notes that Santorum (I’m giggling immaturely as I write this) has used the term “middle class” in the past. Hypocritical? Only if he doesn’t repudiate his previous uses and doesn’t use it again. Is it nonsense? Oh heavens yes. Someone (one-two-three not it!) should tell Santorum that Marx doesn’t really write about the “middle class” all that much. For my first foray into textual analysis, here’s a lazy breakdown of modifiers to “class” in the Communist Manifesto. (I’m not going to do this for Das Kapital, and yours truly will only reread The Gundrisse if Rick Santorum pays him to.)

Class (nouns only) – 94

Working class – 32

Ruling class – 13

Middle class – 5 (“manufacturing middle class” – 1, “industrial middle class” – 1, “lower strata of the middle class” – 1, “lower middle class” – 1)

Bourgeois class – 4 (“petty-bourgeois class” – 1)

Oppressed classes – 2

Suffering class – 2

Revolutionary class – 2

Industrial classes – 1

Lower class – 0

Upper class – 0

…And for a bonus:

Bourgeoisie – 87

Proletariat – 64

Proletarians – 12

Class antagonism (Adj.) – 12

Class struggle (Adj.) – 8

But you get the idea: Marx was more concerned with the “working class,” which he uses synonymously with the proletariat, than the “middle class(es).”

By the way, I didn’t use this post as an opportunity to reread the Communist Manifesto, but I do agree with “applying all rents of land to public purposes,” (this is in 1848, 31 years before Henry George published Progress and Poverty) and “free education for all children in public schools. Abolition of children’s factory labor.” I damn sure have no interest in joining an “industrial army, especially for agriculture,” much less “abolishing the distinction between town and country by a more equable distribution of the populace over the country.” Lord of the Rings fans might find the hyper-industrialist Marx in the wizard Saruman, who pillages the environment to levy his orcish army. I suspect this was not accidental on Tolkien’s part.

Back to the topic: Although Santorum’s right to associate class conflict with Marxism, I wouldn’t say that the history of society is a history of (economic) class struggles. There’ve been plenty over gender, race, ethnicity, and others, but Republicans who agree with Santorum about “middle class” are itching to lose another election if they want to run another Willard Mitt 47-percent-of-the-country-are-cheaters-but-we’re-not-the-ones-dividing-America Romney candidate who tells destitute Americans that they live in a classless society.

Santorum is, however, correct that “middle class” is an ideological term, not an analytical one. As I see it, the broad swath of Democrats, liberals, and economists use it for the following reasons:

(1)  Describing people as belonging to the “lower class” is insulting, even if it’s logically implied by phrases like “hollowing-out the middle class.”

(2)  They’re terrified the Rick Santorums of America will call them Marxists if they refer to the “working class,” so they use “middle class” instead. (Gee, that worked well.)

(3)  “Underclass” means “urban blacks, Latinos, miserably poor people, immigrants, Indians, prisoners, and people who default on debts,” which don’t resonate with white suburbanites, who are a more powerful, swingier voting bloc.

(4)  They delusionally believe we can have a society in which everyone can get the college education necessary to entrepreneur the next killer startup. Don’t worry, it’ll totally pay off the student loans, and all those low-paying retail jobs can be filled by immigrants.

(5)  They are neoliberals who refuse to distinguish between earned and unearned incomes (especially many Americans’ owner-occupied real estate speculations), preferring instead an arbitrary, politicized, progressive income tax that invariably crushes the poor. Some of them even favor consumption taxes.

As you can imagine, I think “working class” is the best alternative. Henry George uses it 20 times in Progress and Poverty, and he and Marx hated each other so there’s a defense to being wrongly labeled a Marxist. Then again, no one should worry about being labeled anything by Republicans, but that’s a different problem.

“Working class” is descriptive of where people’s incomes come from. Someone who’s income primarily comes from real estate or intellectual property speculating is not in the working class. Similarly, people who work in uncompetitive labor markets, like supply-restricted professions (doctors), heavily subsidized occupations (law professors), and corporate executives who decide their own compensation packages are not in the working class. They are in the rentier class. People who own significant capital assets, or instruments like government bonds are in the capitalist class, but that’s not necessarily a bad thing, as Marx would have it.

People who’s income comes from their labor, on the other hand, are in the working class, and that includes people who own their own homes but haven’t amortized their mortgages. Those people are renting their homes from banks but have an option to buy. Anyone who expects to depend heavily on Social Security and Medicare/Medicaid are in the working class. One can argue over the edges and exceptions, but the core of the working class is the return to labor as a factor of production, which is an analytic fact—not an ideological bromide like “middle class.”

Thus, when Democrats, liberals, and economists talk about “rebuilding the middle class” (Robert Reich springs to mind), they’re at worst shilling for neoliberals or at best shooting themselves in the feet because it sounds like for every five people who must logically belong to the lower class, only four “middle class” positions can be created.

There is no fundamental law requiring the social surplus to be distributed along a bell curve. Prosperity for everyone is possible. “Middle class” is ideological santorum and should be treated as such.

11 comments

  1. The term middle class has endured because it is a nice metaphor, and it is a safe phrase for politicians and academics to throw around. Working class is more accurate, but practically everyone in the U.S. believes on some level that THEY are capable of striking it rich.

    Plus, that term might be considered divisive, especially by status-driven, idiotic members of the lumpenproletariat, i.e. “My cousin’s a plumber. He’s working class. I practice law at a toilet firm. I make my living with my intellect. Hence, I am not working class.”

    Never mind that the plumber likely makes more money than the average toilet lawyer, carries no student debt, and has a job that cannot be outsourced, off-shored or eliminated with an internet connection, some programmers, and advanced software.

  2. Tolkien hated the coming of industrialization to Britain, didn’t own a car, wrote novels set in mythical pseudo-Medieval times. He was the prototype of the conservative Oxford don; I would not be surprised if people called him “Merlin” behind his back.

  3. ML,

    I agree with you (rather massively) with regard to the systemic dysfunction among law schools and within the legal profession.

    But I think you are going off the rails when you start wasting time counting the frequency of well over a dozen phrases in the CM.

    Ditto the increasingly monomaniacal Henry George fixation.

    Let me ask you something – do you really think *rentier* more accurately describes doctors, law professors, and corporate executives more accurately than, say, *courtiers* (in that they game the *political* system in order to obtain “unearned” economic advantage).

    Also, of all the states (and cities), which come to mind when the Georgian nightmare of land monopolization is contemplated?

    I would argue California (where a decade of Fed ZIRP economic repression is turning coastal real estate into a substitute store of value alternative to the continually debauched dollar) and New York City – the contemporary ne plus ultra of financialization and population density.

    Both locations *long* lying well to the *left* of the median American.

    In short, a *lot* (I won’t say all) of our contemporary problems are coming from the gaming of the *political* system (rather than the economic – which tends to be rather more capable of self-adjustment).

    For instance, the *bank* financial crises of 2008-2009 were converted into a widespread contagion (implicating every dollar saver, including the tens of millions who had studiously avoided the rank, ZIRP-inspired real estate speculation of the last half dozen years) by the *political system* (after a couple of abortive Congressional votes).

    So to slam Romney for *correctly* identifying the fact that having more-or-less 47% of the population exempted from paying the *federal income tax* (and therefore a rather substantial proportion of *all* taxes) really starts to look like political engineering designed to render the American majority indifferent to the revenue side of fiscal policy…well, let’s just say, I think you are getting wrongheaded.

    Again, I would say look to California – google the Field polls on public attitudes to state taxation.

    You will find a result that has been *heavily* engineered by the ostensible Left in that state (majority indifference to spiked income tax levels – because they are levied on the minority “rich” (albeit defined ever downward) and an almost utter aversion to land tax reform.

    So I wouldn’t look leftward for Georgian reform.

    At least among any Left in actual power in the United States.

    Let’s get back to dissecting the details of the Law School scam – I think it is a lot more productive and needed.

    1. cas127,

      I’m not sure I’m following your comment, but I’ll try.

      (1) I wouldn’t say my Henry George fixation is monomaniacal; this post only mentions him offhandedly. (Okay, I’m being a little cheeky.)

      (2) To answer your question re: “rentier” vs. “courtier,” I’m not seeing a clear distinction. As to which states/cities come to mind when “land monopolization is contemplated,” California and New York City come to my mind as well.

      (3) I think we’re in agreement that the American left isn’t Georgist, but I note that in the post, esp. the Robert Reich who invariably writes about “rebuilding the middle class.”

      (4) But I think we disagree on dollar savers as victims of ZIRP vs. the 47 percent whom Romney implied are cheaters. I’m pretty sure most Americans pay more in payroll taxes than they do in income taxes, and regardless of how many Americans are paying income taxes, the Romney statement was divisive because the 47 percent aren’t cheaters. They’re old, disabled, or students.

      (5) Your characterization of Fed ZIRP as “economic repression” and “dollar debauchery” has been discredited. Most Americans don’t own any assets, and they’d benefit from higher inflation because it would force the dollar-hoarders to invest and create jobs. Raising rates will just throw more people out of work.

      1. ML,

        To begin, I believe you are doing very good work with regard to the law school scam – my other points are simply an attempt to sway you a little more rightward (I myself have probably swayed a little more leftward since my law school days – not much, but a bit).

        That said –

        1) The HG references do stand out a bit – perhaps it is simply because you blog over an extended period and I only make it back here periodically. HG has his points – I’m just not sure how many of them are really relevant to today’s macroeconomic circumstances.

        2) For me, “rentier” is someone who “rests upon his/her capital” with the imputation that this is somehow shady/morally dubious. To me, it really matters *how* that capital was earned, and *how* that capital is currently employed. Condemnation for merely *having* capital (otherwise known as “savings”) seems wrongheaded to me.

        “Courtier” on the other hand, is suggestive (for me) of someone who advances economically because of *political* influence/connections.

        To me, a “courtier” (relative to a “rentier”) is someone much more deserving of opprobrium because of the widespread corruption within the political system and the non-economic/efficient decisions that result.

        3) No point of dispute – I guess I would only reiterate that the American Left in *practice* is quite accomplished in striking public *poses* while in point of fact engorging their private interests every bit as much as the Right might be imagined to on its worst day (the negative re-distributionist consequences of public sector pensions might be meditated upon here).

        Brief example – contemplate the principal implied by a lifetime defined benefit pension of, say, even $50,000 in the *public* sector (funded by the 80% of mostly lower-paid *private sector* workers)

        At a 4% interest rate, it would take principal of $1.25 *million* to yield $50k per year, indefinitely.

        And at a post-ZIRP 2%? A 2.5 million dollar endowment.

        For *each* public sector worker (“underpaid” – if we are to believe the public sector union mythos).

        (Unaddressed – the far superior status of public sector benefits and the in-practice comparison of public/private sector salaries/work conditions. To wit, how underpaid is a $40k school teacher who has a union contract to only work 1500 – 1600 hours per year?).

        My point – the practicing Left is as much a front organization for entrenched interests as the Right might be imagined to be.

        4) The 47%. Here we do disagree.

        My recollection is that Romney (for whom I have no affection – how do you lose in the worst economy since the 30’s?) didn’t call the 47% *cheaters* (they are, after all, the result of a consciously engineered tax system) – rather, he simply said they would never vote Republican because they derive federal government benefits without paying into federal government coffers (via the federal income tax).

        And while payroll taxes do have to be taken into account, they are (theoretically over the short term, actually over the long) self-enclosed within the Medicare/Social Security system.

        “47% Joe” does pay the MC/SS taxes that pay for MC/SS – which he will recoup (and then some, in further re-distributionist manner).

        What “47% Joe” *isn’t* paying for – is every *discretionary* Federal spending program in existence.

        Therefore, “47% Joe” has been (by political design) rendered economically indifferent to the discretionary spending practices (and efficacy) of the federal government.

        Further, we both know (you are far too adept at internet research) that 47% of US households are not made up of the old (many of whom continue to work past 65 anyway), students, or the disabled.

        Not even *close*. (47% of 315 million Americans is 148 million).

        The “old/disabled/students” is a Krugman line and it is not even close to being factually true (personally I think Krugman is a *deeply* dishonest, disingenuous economist).

        What 47% *is*, is awfully damn close to 50% and that ain’t no accident.

        It is the product of a consciously designed tax system, engineered to render a majority (or very close majority) indifferent to the system of federal income taxation.

        Because they aren’t on the hook for federal income taxes.

        But they might derive federal benefits (beyond the MC/SS they *do* pay for).

        Again, I would refer you to the Field poll of Californians’ opinions concerning *their* tax system (California has taken its lopsided taxation system furthest down the road of democratic/Democratic gaming).

        5) ZIRP as “dollar debauchery”/”financial repression”

        It isn’t that these beliefs have been “discredited” – it is simply that they are *disregarded* by the Left (they are a feature, not a bug in their opinion).

        It is inarguable that printing an additional $3 trillion by the Fed (via multiple rounds of “quantitative easing”) significantly dilutes the purchasing power of pre-existing savings (because roughly the same amount of *real world* assets are now represented by a money supply $3 trillion greater – the $3 trillion only being directly distributed to…the banks…who co-authored the 2008-2009 collapse following the…2003-2006 previous Fed ZIRP go-round…).

        “Dollar hoarders” are otherwise known as “savers” and if they are not a majority (which I question) then one might reflect upon the politico-legal assignment of “protected class” minorities in the US and the *actual, continuous* daily exercise of differential/discriminatory treatment (in taxation/confiscation, say).

        A person who believes the US Constitution is the law of the land might also meditate upon the Takings Clause (relative to operational effect of QE) and the fact that the Federal Reserve does not have a single elected official anywhere within it.

        Look, I have no doubt higher rates *might* cost more jobs in the short term (not that historically collapsed rates have done such a spectacular job from 2009 to date or from 2001 to 2006 for that matter…).

        But that says nothing about the long-term wisdom of doing so.

        Or the *legality*/wisdom of doing the opposite (ZIRP, etc.)

        “Liquidate the hoarders” sounds a helluva lot better than “confiscate the savers” (post-Cyprus especially) but to me it has more than the faint ring of “liquidate the kulaks”.

        And I think close examination will reveal that ZIRP is injuring the American kulak/saver a lot more than any Forbes list member or NYC financialist (and attendant army of – mirabile dictu! – *employed* lawyers).

      2. cas127,

        (1) HG’s points are relevant because (a) my blog is about rents, though not land when I started it admittedly, (b) there isn’t always law school news, and (c) my blog, my rules.

        (2) I’m still seeing no real distinction between “rentier” and “courtier.” How rentiers earn their assets and how they employ it (and how they manipulate the political system) is crucially relevant to me too. I don’t mind people who invest their savings into productive businesses. I do mind when they speculate for unearned, zero-sum windfalls. This is the core of the HG stuff, and I’m surprised you’re disagreeing with me. In fact, I don’t think there is a substantive disagreement between us at all, beyond rentier vs. courtier.

        (3) Skipped.

        (4) Romney characterized the 47 percent as people who “believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement, and that government should give it to them … My job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives. ” Sure sounds like he thinks they’re cheaters to me.

        I’m having difficulty finding Krugman writing about a breakdown of the 47 percent, but here’s NPR and the Hamilton Project (via Mark Thoma). Only 17.2 percent of households paid neither income tax nor payroll tax (which matter because people who work aren’t cheaters). Mostly they’re old people, unemployed people (as though that’s voluntary), and students.

        I’ll have to look into that Field poll you mentioned.

        (5) ZIRP, etc. is constitutional based on The Legal Tender Cases, a group of 19th century Supreme Court decisions that reversed an earlier one holding unconstitutional the greenbacks the government printed to win the Civil War. The greenbacks were paper, fiat currency that rapidly depreciated, diluting savers’ assets.

        To say that QE “dilutes the purchasing power of preexisting savings” is discredited. Since 2007, the Fed has tripled the amount of base money. Where are my $20 Big Macs? It’s not like savers would have invested in anything without QE, and if the Fed raised rates like Europe did, savers would’ve just saved more dollars and created even fewer jobs.

        If the vast majority of Americans have few if any assets, then money-printing will force savers to invest in the creation of real goods and services, which creates jobs. Majority rules, and as I pointed out above the government can print money to dilute the value of assets.

        If you think that’s an unfair taking, then tell me, why Americans whose wages are confiscated by sales taxes, tolls, etc. aren’t ever compensated for their losses?

  4. “Where are my $20 Big Macs?”

    They are the $700,000 median value San Francisco/San Jose/N. California homes that fell by 50% following the 2008 crisis (reflective of their truer supply/demand value) that have now been reflated from 350k to 700k by the Fed’s ZIRP policies of 2008 to date.

    Actually this is ZIRP II – ZIRP I being behind the pointlessly, real-economy distorting and destructive home price run up from 2003 to 2006.

    Your ZIRP I $20 Big Macs were FL/CA/various other selected metro real estate bubbles.

    By debauching the dollar through printing, the Fed is not increasing real economic investment/productivity in any appreciable way (that is why the ZIRP “recoveries” are so long and tortured compared to post WWII US experience – the China price/productivity advantage overwhelms any ZIRP driven incentives).

    Ironically, the actual effects of ZIRP (driving “dollar hoarders” to convert depreciating dollars into limited supply coastal real estate as an alternate store of value) is probably *only* enriching the very land speculators that HG would have *hated*.

    Anyway, we can probably continue to debate in the future.

    I’ll probably respond a bit more on your latest responses but I have to go shopping now at the (debauched) dollar store.

    It is law grad night…

    1. cas127,

      (1) If the Fed raises rates, sure, you get lower Bay Area land values, but you also get mass unemployment because everyone sells equity and buys government bonds. Helps savers, tortures everyone else. Sadistic ECB raised its rates from 1.0% to 1.5% in summer 2011 during a time of mass unemployment. Did not create jobs.

      (2) Your ZIRP No. 1 didn’t cause the housing bubble. It didn’t help, but there were low rates in the 1950s without land bubbles. Problem is the trade deficit and a predatory financial system. If you don’t want land bubbles, tax land.

      (3) I think you’re confusing ZIRP with QE. They’re different. ZIRP is printing enough money to keep the effective real interest rate at zero, not indefinite money-printing.

      (4) I think your problem is with QE, which is when the central bank prints money and keeps buying toxic assets from banks. Economist Michael Hudson, for example, argues that banks just keep this money in its vault and lends it only for corporate takeovers, stock buybacks, and speculating in developing countries’ currencies in carry-trades. Printed dollars don’t go into the real economy. This much is true, but it’s still better than mass unemployment. Even your hated Paul Krugman and Dean Baker agree QE hasn’t done a whole lot. They may have their own agendas re: fiscal policy, but little of it is a pie-in-the-sky liberal dream list, mainly propping up state and local governments so they don’t end up like Detroit because of Alan Greenspan’s decision not to pop the land bubble earlier.

      (5) Although ZIRP causes the value of the dollar to decline, that’s good. Weaker dollar increases exports, reducing the trade deficit and at the very least prevents further job losses, if it doesn’t facilitate growth.

      (6) You can’t spend debauched dollars at the debauched dollar store if there hasn’t been much commodity inflation.

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