Friday, February 18, 2011

Am I Suggesting Class War?

I realized the last few posts could be fairly easily classified as class war.  The short answer is that no this is not meant to advocate for class war.

The longer answer is that this is not class warfare from anything like a socialist perspective, I am making no claims, and do not believe, that there are any inherent conflict of interest between the wealthy and the rest of society or that this is some way linked to control of the means of production or any particular segment of society's resources.

What I'm suggesting instead is pure interest group politics.  A number of innovations, some outside our control and ultimately part of the international system, as well as a number of others particular to decisions made by our government, have led to a shift in incentives and potential awards among groups that individuals can potentially identify with and become a member of.  Unsurprisingly, this leads to them joining and identifying more frequently with the groups whose rewards have become greater.

This of course is a huge problem.  Our system works because it manages to align the interests of many groups in our society, I would be willing to say that the success or failure of a society is largely determined by its ability to align the interests of the individuals making it up and its ability to attract new individuals into it.  Changes that interfere with this are potentially extremely destructive, the more interests begin to diverge the more potential gain that individual actors see in creating further divergences that benefit themselves more than others.  Eventually, cooperation becomes increasingly more difficult the further interests diverge and the lack of coordination between actors begins to shrink the pie.

In our system, it used to be that the interests of the wealthy diverged significantly from each other and were more closely aligned with the interests of their business and those that were involved in their industry.  While this may not have declined greatly, their interests as members of the upper income bracket, and probably more significantly, as earners of investment income have certainly converged meaning that, at the margins, they have become more likely to cooperate with each other and gain those benefits and let the interests of their individual industry and business be secondary (at the margins is an important phrase here, I'm not suggesting they no longer put their business first, just that there is a greater range where their business interests seems less relevant than the interests they share with other wealthy folks).

So, fundamentally, this is a simple failure of political economy, not class war.  There is no inherent conflict between income brackets, but a failure of political culture has strengthened a community of interest within the upper income bracket while weakening the community of interests between income brackets relative to this.  This is leading to a predictable outcome.


  1. A rose by any other name is still a rose Tzi...

    Just because the capital itself is a means of production/revenue and the collusion of gov/finance in swindling taxpayers nowadays, doesn't mean it is not a class war.

    But you might be right in the end that there is no class war right now in the US. My thesis is that there is an almost decided victory for the next years for the rich. The war turned the tide after Carter left and the rich are in full swing now. We are returning to feudalism by any other name. A large number of people are indentured to their jobs, and pay taxes. Those that don't pay taxes are so poor that barely get anything from the Republic (except hot air and a chance to join the military). All dividends accrue upwards. And in the stratosphere, they pay minimum, because they can't get away with nothing (although I hear of corporations with billions in profit and zero in taxes). In feudal times this is equivalent with continuous plunder.

  2. Cornel,

    I do agree there is something like a class war on now, I like how Krugman puts it, there's a class war and the rich are winning. I'd add to it that they're winning cause they are the only ones acting like there's a war on.

    I do think there is a distinction between what I'm suggesting and class war however. Class war suggests and essential divergence of interests. I don't think this is the case, I think through most of US history there were more shared interests between all strata in US society than there were interests shared solely among different strata.

    However, as a result of bad socio-economic theory starting with Reagan reforms were implemented that increased the number of shared interests among the top strata causing the historical dominance of vertical interests to be replaced by strong horizontal interests. All we need to do is reverse these policy innovations to revert to the traditional US situation of more commonality among vertical interests than horizontal ones by income strata and this situation will start to self correct.

    Reforms in this direction wouldn't hurt the rich, it would just divide them and give them more common interests with other income levels than with each other. I think differing industries already push to some degree in this direction so the push back wouldn't have to be large. In particular, I think the information economy requirements for a skilled workforce push back pretty hard against those that wish to compete more on costs so it wouldn't take much at the institutional level to make these divides into a strong wedge issue within the wealthiest strata.

  3. I don't have an Ariadne's line out of this labyrinth that is the US society but even going on your line of thought, this reintegration has not enough mass to get traction, given that the economy is itself more horizontal nowadays, consisting mostly of service workers, health care workers, and governmental (all levels) workers. Defense industry is on its own perch. It takes less than 10 people to deface a whole mountain in W. Virginia. In this respect, the US is very productive. Plus, the american worker knows how easily she can be replaced.

    The financial sector doesn't look to be to willing to direct investments in the US, no matter how much one hears that the government crowds out private investment. Unless they would be allowed to become the owners of the new roads, rails, etc. and this is not necessarily the private investment that would reintegrate the US society on the vertical.

    So I think that the wealthy elite that owns assets in the US and abroad has learned its lesson, that is to always be on the offensive.
    And the ideatic paradigm has shifted in the US, with a large part of the population disgorging stupid sound-bites.

  4. I encourage the people in this discussion to find out a bit about "cooperativism". More than an economic model, this is a philosophy that tries to draw out some of the best characteristics a human being can offer in community (common interest, altruism, fairness, sharing.

    I don not quite understand Tzimiskes's insistence on the vertical and horizontal interests being shared across or within social strata.

    I think the issue can be simplified by avoiding the structural analysis, and concentrating in "deactivating" human habits which underly the warfare, such as, greed.

    Greed can be deactivated if the value of things corresponds to the actual needs of the people rather than to their whims, or their speculation.

    Cooperativism aims to deactivate greed by turning people's attention from the "gold" (i.e. unreal value given to things) to the benefit of the community, without really having to undergo a complex and abstract philosophizing about it.

    Look up food-coops in your area and you'll see what I mean.