The entrepreneurial spirit that made the US the world's dominant economy can't thrive without a strong middle class. But the middle class is being squeezed like a lemon, and soon nothing will be left but the pits.
Our national future dims every day as we fall behind other regions of the world in education, science and technology, culture, and progress towards a just society. When hard-working wage earners can just barely afford to make ends meet, we can't save money, and we often go into debt. Then, no longer in the habit of saving, we spend what disposable income we have on iPods, video games, wildly overpriced children's clothing, and gas-guzzling SUVs.
These habits have the curious effect of propping up the economy by pushing our trade deficit higher and higher. As long as we continue to buy their products, the Chinese and Japanese continue to finance our debt. This house of cards may come crashing down dramatically, or drift away on a breeze, but it certainly cannot stand for much longer. And when it falls, what's left of the US middle class will be really screwed.
But we're screwed already. Our federal taxes are used not for the infrastructure of our economy and investments in our future but on a military that's employed in costly misadventures. Meanwhile the Bush team further reduces the tax burden on the wealthy, not even pretending to believe in any trickle-down economic theory. The benefits to the rich are pure giveaways.
The Democrats in Congress bear a share of the blame. They are as much in thrall to the robber barons as the Republicans are. Worse, the robber barons have actually become indistinguishable from the ruling politicians. The Bush family beds down with the Saudis; Cheney's corrupt company is conveniently the only one that can handle fuel deliveries in Iraq (did anyone believe that one?); legislation is not only influenced but actually written by representatives of industry, then rubber-stamped by the supposed representatives of the people.
Article comments
— go to most recent comments1 - Steve S
Beautiful post. I am a firm believer in the importance of sustaining the middle class. It is the doorway from poverty to riches. Without it, you have an aristocracy and there is no way to get from the one class to the other.
2 - Eric Berlin
Great post, Jon: this should be tacked to the wall of the DNC locker room. I'm not kidding: this kind of language -- simple, direct, truthful -- is the kick in the ass the Dems are begging for.
And millions of people like us are begging for a return to the values and policies that made our nation the finest in the world.
If that's reactionary, than color me a reactionary Democrat.
3 - Dave Nalle
>>wildly overpriced children's clothing<<
Huh? Guess you don't have kids. Ever looked in the childrens section in Target or Old Navy or anywhere? Everything goes on the sale rack with phenomenal speed and then it's like $2 for a shirt and $3 for a pair of pants.
>>Our federal taxes are used not for the infrastructure of our economy and investments in our future but on a military that's employed in costly misadventures.<<
Do you have any idea what a tiny amount of the current federal budget is used for the military these days compared to previous eras?
>> Meanwhile the Bush team further reduces the tax burden on the wealthy, not even pretending to believe in any trickle-down economic theory. The benefits to the rich are pure giveaways.<<
This is just laughable. Recent tax changes have reduced loopholes for the rich and mostly decreased the tax burden accross the board, with a particularly large percentage decrease in taxation for those in the lower half of the tax-paying population.
>>Cheney's corrupt company is conveniently the only one that can handle fuel deliveries in Iraq <<
Ok, name another US owned company which can provide the services Halliburton does overseas. Oh, never mind. You can't. There isn't one.
>>Liberal values are what gave us a strong middle class in the first place.<<
No, capitalism is what gave us a strong middle class.
>> Without a return to liberal values, our country's collapse will continue, for only united with a sense of its own value can the middle class make a comeback. <<
Out of curiosity, where did you get the idea that the middle class is disappearing? I know it's a popular theory, but have you actually looked at it? Here's a link for you to the Bureau of Labor Statistics. The article referenced in that link shows the trend. But if you look at it closely you'll see that the pattern of decline in middle class incomes, while downward, is in tiny amounts per year, not enough to knock more than a small percentage out of the middle class over a period of 30 years. While at the same time there has been a strong upward trend in the incomes of people in the lower class and their rise in income has been in larger yearly increments than the average decrease in middle class income. The net result is that more of the working poor have made it into the middle class than middle class folks have descended into the working poor.
>>If substantial segments of the middle class continue to vote Republican, they will vote themselves out of existence, and with them, the hopes of our nation.<<
Like a lot of people they vote their self-interest. They're not as dumb as Democrats keep telling them that they are. They know that lower taxes means more money in their pockets and that an emphasis on free enterprise and individual opportunity means more chances for them to advance their fortunes.
Those points aside, you do bring up some good issues in your article, but sadly the Democrats seem to be moving farther and farther away from addressing their chronic failings as a party.
Dave
4 - Steve S
>>Liberal values are what gave us a strong middle class in the first place.<<
""No, capitalism is what gave us a strong middle class.""
Actually, no. Capitalism has been around since man first traded animal hide for shiny beads. The middle class never really existed before America created it. If capitalism created middle class, then it built it at the same speedy rate it answers it's support lines.
The middle class is the creation of government intervention in the marketplace, and won't exist without government intervention in the marketplace.
5 - Steve S
There is no such thing as a "free market." Markets are the creation of government.
Governments provide a stable currency to make markets possible. They provide a legal infrastructure and court systems to enforce the contracts that make markets possible. They provide educated workforces through public education, and those workers show up at their places of business after traveling on public roads, rails, or airways provided by government. Businesses that use the "free market" are protected by police and fire departments provided by government, and send their communications - from phone to fax to internet - over lines that follow public rights-of-way maintained and protected by government.
All these cuts conservatives want to make to the federal government...they don't plan on cutting out any of this shit for sure. Just hope people know what's going to be cut for smaller government, things for the middle class and the poor.
It's already happening here.
Markets are a creation of government, just as corporations exist only by authorization of government. Governments set the rules of the market. And, since our government is of, by, and for We The People, those rules have historically been set to first maximize the public good resulting from people doing business.
*first and last paragraph taken from here, a good history on the creation of the middle class.
6 - Dave Nalle
>>Actually, no. Capitalism has been around since man first traded animal hide for shiny beads. The middle class never really existed before America created it. If capitalism created middle class, then it built it at the same speedy rate it answers it's support lines.
The middle class is the creation of government intervention in the marketplace, and won't exist without government intervention in the marketplace.<<
This is so insanely untrue that I don't even know where to start disabusing you of it.
Middle Classes have existed in societies going back to before the Roman Empire. The classes of free artisans, merchants and tradesmen have existed since civilization began. I'll agree that urbanization usually results in a growth in a middle class, but the US is hardly the first urbanized society, and urbanization doesn't mean government. Plus there are many societies which were mostly rural societies which had rural middle classes - Anglo Saxon England being an excellent example of this
The idea that government creates the middle class is exactly counter to the pattern of history. Middle classes always do best when government is least restrictive and least involved in trade. Once government gets involved in trade it establishes favored relationships with particular businesses and they thrive while others suffer.
To say that America created the Middle Class is to deny the massive growth of the middle class in Europe in the Renaissance and early modern period. America was founded by people who were ALREADY part of a middle class - the Pilgrims were mostly from a moderately wealthy non-noble merchant class - the definition of a middle class for that era.
The middle class is the group between the poor and the ruling elite. That holds as true today as in any other era of history.
As a general rule those countries which did well historically had large, productive middle classes, while those which were top heavy and had no middle class to speak of had to survive by war and conquest and didn't do well in the long term.
Steve - you're a fine fellow in many ways, but on this you're just dead ignorant. Here are some books to read:
Power and Profit: The Merchant in Medieval Europe
by Peter Spufford
The Making of the English Middle Class: Business, Society and Family Life in London, 1660-1730
by Peter Earle
Ancient Greece: A Political, Social, and Cultural History
by Sarah B. Pomeroy
There are a jillion more. Trust me - modern American government didn't create the middle class.
Dave
7 - Steve S
Dave, the middle class as we know it, is an American creation.
In Europe in the past, it was a mercantilist middle class. So it was like 10% of the people were rich, 10% were middle class, and the remainder were serfs.
The middle class as it is today was created with government intervention.
The link I posted gave a good account of the history of the American middle class.
From here:
According to Zhu, in Western countries, it was the income distribution system that gave birth to the middle class. There, both low-income and high-income people make up a small proportion of the population, while the majority has a medium income, hence the birth of the middle class. In China, the majority of the people in the middle do not receive the greatest share of income. Instead, only a few people enjoy the lion’s share of social income.
From Tikkun (now available only in google cache):
"the idea of a middle class gained some legitimate credibility after the New Deal when millions of working class Americans finally gained a measure of economic and social security."
(New Deal = government intervention).
No, no, there's too much out there that tells me that the middle class as we know it is only maintainable by government intervention.
Do you know what the equivalent of a middle class person in 1500 would be considered today? Answer: not middle class.
8 - Dave Nalle
Sorry Steve, your sources are just wrong. While what you say may be true of some European and many non-European countries, the idea of a middle class society has always existed. That would be a society dominated by merchants and tradesman with the poor and the super-rich as minorities. That's the only way to describe renaissance italy, the early modern Netherlands and Hanseatic League countries, Ancient Greece, England from about 1400 on. In short, the most important and influential countries in history have been those which have had a middle class society. They've also been those which lacked a strong nobility or centralized monarchy.
The sources you are referring to are clearly not historians , or are driven by an ideological agenda other than historical accuracy. The proponderance of facts weigh so heavily against this argument that even considering it renders the considerer suspect. It requires not only denial of historical fact, but to assume that historical fact is the exact opposite of the truth.
The truth is that in virtually every case it is the society with the strong government which does NOT develop a middle class. You can even see that in operation today around the world. A middle class society and a powerful government are directly in opposition to each other. That's why you have such a strong middle class in the US - our weak and decentralized government. And if you see a decline in the middle class today it is because our government has gotten out of hand.
Trust me as a historian - whatever out there told you that government intervention created the middle class is beyond just wrong, it's straight-out crazy.
Dave
9 - Dave Nalle
I'm going to do some more research on where the theory you picked up comes from. It doesn't even match Marxist theory so I'm guessing it's some sort of post-Marxist idea. Perhaps even Maoist, since the sites you source are Chinese.
Dave
10 - Steve S
Sorry Steve, your sources are just wrong
Dave, I spent about 30 minutes last night googling all sorts of phrases 'origin of middle class' 'birth of middle class' 'creation of American middle class', etc.
I don't know those sources, or make claims that I support the ideology on those websites, I don't know enough about them, BUT the concept of government intervention, I learned in school, have seen on educational programs and have seen in practice, example and explained as to how it functions, my whole life.
So 'frisking' those sites won't change my mind.
That's the only way to describe renaissance italy, the early modern Netherlands and Hanseatic League countries, Ancient Greece, England from about 1400 on. In short, the most important and influential countries in history have been those which have had a middle class society.
Perhaps we differ also, on what the definition of middle class is. You include England from 1400 on, in your example. As I have used the Dickens story of Scrooge as an example in the past, it leads me to believe that you and I define middle class differently.
In England from '1400 on', there was landlordism, ursury and financial abuse of serfs ran rampant.
It was after 1400, when Bob Crachit was enslaved by Scrooge into massive overtime WHILE not being able to afford health care to save little Timmy or to even put the Christmas dinner on the table.
Who do you put in the 'middle class' in the Scrooge story, which, while fiction, is an accurate example of how people lived at the time?
Would you put Scrooge in the middle class? It certainly wasn't Bob Cratchit, who was enslaved by corporate Scrooge. Where exactly is the middle class of this era you are advocating?
11 - Steve S
perhaps you can investigate this source, which focuses on the Renaissance:
educational material
key quotes:
In the late Middle Ages, Italy was made of about 250 city-states. Some of these city-states were republics ruled by rich aristocrats and merchant families.
People in the city-states wanted to understand the arts. They studied Greek and Roman classics, or humanities. Their studies became known as humanism. Medieval Christians saw themselves as sinners. Humanists did not see people as sinful. They thought people had dignity and worth. They were more interested in life on Earth than heaven or hell. Humanists (Steve's note: modern day version of liberals) focused on three classical ideas. They believed in the individual worth of people. They also had a strong commitment to public service. They supported public buildings and funding the arts. And they encouraged people to develop their own skills and talents and have interests in many different subjects.
For scholars, painters, and art lovers, the Renaissance was a very exciting time. For most people, however, life went on as usual. They could not read or afford to buy art. They spent most of their time simply earning a living.
(excerpt:) People in the city-states belonged to many different social classes: The lower classes made up most of Florence's population.
The Middle Class during Renaissance Italy was a minority, not a majority.
12 - Steve S
about ancient greece:
educational source
The olive oil trade became subsidized by the government to stimulate the economy.
For a tiny group of upper-class Spartans the government represented a sort of democracy, but for the masses it was an oligarchy.
After the Peloponnesian War (Sparta vs. Athens) anarchy and economic depression were the end results in the Greek world. The Spartans were ruthless rulers and imperialists and everywhere in the Greek world democratic revolutions broke out against Spartan despotism. Commerce and industry languished and the whole region slipped into an economic depression, disunity and there was great unemployment. The poor became poorer and the rich more reactionary and cruel than ever.
------
Another educational source here
Moorefield girls high school
Title of report: The Development of the Greek World, 800-500 BC - Causes, nature and consequences of tyranny
13 - Steve S
dump that girls high school reference, I just saw the date.
14 - Jon Sobel
I'm glad to have inspired this debate on the middle class. The middle class as we perceive it in modern society is almost by definition a majority. My premise is that American and Western Europe and other modern societies have enjoyed, in modern times, a middle class the size of which has been unprecedented in history, and my point is that it seems to me that the middle class is being squeezed. Maybe we need to further refine the definition. If middle class means having enough income, week by week, to put food on the table and keep a roof over one's head, then Dave's points have more validity. But our modern conception of "middle class" means more than that - it means some degree of disposable income and financial security. These things are dwindling for the twenty-first century "middle class." (Federal definitions of "poverty lines" are a joke.)"
Dave: what do you mean by "urbanization doesn't mean government"? I don't see how you can mean that. Can you imagine a city with no rule of law?
15 - Bennett Dawson
Great post Jon. So much wrong with our current system, so little time.
Despite the oft repeated hogwash about having "capitalistic system", we have a modified Mercantilistic System of Government which is a direct decendent of Henry Clay's "American System", hammered into place by President Lincoln.
"A system of statism that employs economic fallacy to build up a structure of power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state."
Corruption, and more corruption. Disgust is hard to keep in check with the games played by our current administration. Oh yeah, it's great for my 401k, but I'm ashamed of the transparent scams being employed in the name of dividends.
16 - Steve S
If middle class means having enough income, week by week, to put food on the table and keep a roof over one's head, then Dave's points have more validity.
In my 'Scrooge' scenario, Bob had enough money to put food on the table most times and could keep a roof over his head. So Bob would then be middle class in this case.
However he could not afford a 'special' meal (Christmas dinner with his family), and he had no healthcare to save little Timmy, and he worked overtime and was abused mentally and physically (by overworking) by his employer.
I do not define that as middle class. If you all wish to, I would think this is not a middle class I would be not be advocating a return to.
Even more than financial security, I define the middle class as the doorway between the poor and the rich. In a society with only rich and poor, there are no doorways between the two, never has been in history. Only the middle class makes that possible.
So for me, the definition of middle class is less based on monetary income and based more on opportunities available.
17 - Jon Sobel
>>Huh? Guess you don't have kids.<<
No, I don't - good call! When I have to buy gifts for kids, I find the clothing to be ridiculously expensive, but then, I'm certain I'm not looking in the right places! A lot of the clothing we buy is made in Asia, though - you can't deny that!
>>Do you have any idea what a tiny amount of the current federal budget is used for the military these days compared to previous eras?<<
It's right around 50% of discretionary spending. By what strange math is that "tiny"?
18 - alethinos59
Excellent post Jon! As for the cost of kid's clothing at TARGET... Why yes it is very affordable... THAT'S what the SWEAT SHOPS are for!
19 - Dave Nalle
Steve, are you aware that you're trying to support your point about there not being a middle class in the 19th century in England by using a work of melodramatic fiction? Do you think that A Christmas Carol is a work of historical research and that Bob Cratchet and Ebenezer Scrooge are historical characters? They're extreme exaggerations, caricatures of worst case scenarios to make Dickens moralistic points.
That said, I will agree that the middle classes of other eras are somewhat different than the middle class in America today. In general they were smaller in proportion to the poor - a function of pre-industrial economies which required a much larger force of pure laborers.
In addition, the middle-classes of other eras were much more diverse than our modern middle class. Within the middle-class you would have a class of land-owning farmers, a merchant class, a tradesman or artisan class, and a class of educated clerks. Many of these people would not be universally educated, but the artisans of medieval Italy were by no means poor even if they were not always fully literate. Take for example Leonardo da Vinci (and many other skilled artists) - he came from the artisan class and was able to advance into the confidence of princes and considerable wealth. That kind of upward mobility regardless of social class is an absolutely defining element of a middle class society.
BTW, serfdom as such never actually existed in England. Anyone who tells you it did doesn't understand how anglo-norman feudalism worked. And the only country where serfdom as such survived beyond the 1700s was Russia.
For historical study my definition of middle class would be those people who worked for themselves or were employed by others at an occupation where they were able to earn enough to support their family and have sufficient surplus income to potentially better their situation socially, educationally or economically. A middle class society would be one which allows advancement in the society based on wealth, ability and accomplishment even if it also has a hereditary ruling class. And there are plenty of societies like that in history.
As for government creating the modern middle class in America, that's just laughable. America was the most middle class country in the world from the very start, because it was founded by Britain which was the most middle-class country in Europe and founded without Britain's hereditary aristocracy, making the middle class the top rung on the socio-economic ladder. Our middle class grew and flourished beyond any other specifically because our government was loose and decentralized and poorly equipped to regulate peoples lives and enterprises making it easier here in America than anywhere else to advance yourself economically. Having no hereditary caste system and no real governmental restraints people were free to advance themselves to at least moderate prosperity fairly easily. Our enormous wealth as a nation and then our aggressive industrialization made the overall pool of wealth pretty generous so that the standard of living was high, making a larger portion of the working population fall into the middle class.
Dave
20 - Steve S
I said yes it is fiction, but no, it is not a melodramatic description of the era. Research will show you that it is an accurate depiction of what landlordism, ursury and abuse by corporations was like back then.
American history was not founded straight out of middle class. The people might have been middle class 'over there', what difference does that make when you come to a strange land? Their money was no good over here. They had to start from scratch with only what they could bring, which of course would be directly proportional to their economic status, the wild west did not form from people bored with a cushy middle class, it formed from fighting to survive.
21 - Victor Plenty
A society where you have to be Leonardo Da Vinci to be upwardly mobile is hardly what anyone could reasonably call egalitarian.
That being said, the creation of a truly strong and open middle class is not a simple thing. Mere government fiat is not enough to do it. Mere government neglect is certainly not enough to do it.
Carefully considered government policies (such as the G.I. Bill and the Social Security program in the middle of the twentieth century) may help strengthen and expand the middle class, but still won't be enough to do it alone, without other factors.
Another crucially important factor in the rise of modern middle classes has been the organized labor movement. Without labor unions, or something else exerting a similar influence on the policies of corporations and governments, it is unlikely the American middle class would ever have become as broad or as deep as it became in the mid-twentieth century.
Of course, labor unions themselves would have had nothing to work with, had it not been for the vitality of capitalism. Capitalism is another real liberal value. The mistake of so many modern "conservatives" lies in discarding all the other values of a free society, and deifying capitalism as nearly the only standard of measurement.
A market economy, like fire, is a wonderful servant, but a terrible master.
22 - Jon Sobel
My impetus for writing this post in the first place was frustration at the amount of tax I have to pay to a federal govt. that uses my hard-earned money neither wisely nor fairly. My federal income tax goes, in large part, to support idiot wars that make money only for the already super-rich while putting us all in increased danger of terrorism - that's unwise. My local taxes are higher than they should be because my region (New York City) puts in more to the federal govt. than it gets out - that's unfair. The same formulas for benefits etc. are applied to all areas of the country no matter what the local cost of living - that's unfair too.
I don't mind paying taxes that will support a justly and intelligently run welfare state that provides a safety net for the poor and unfortunate. I mind, a lot, paying taxes that support big tax breaks for the super-rich, so they get richer and I get poorer. I'm the middle class. Almost everyone I know in America is also middle class. A lot of us are squeezed. It's a fact. Regardless of how and when the middle class was created, and exactly how we define it, that's the reality in America today. It would be a lot easier to put up with if the rich paid their fair share. They always tended not to, and now even less so.
23 - Jon Sobel
>>The mistake of so many modern "conservatives" lies in discarding all the other values of a free society,<<
Such as - as I mentioned in the original post - justice. Mention justice and the so-called "conservatives" just go mum. They have nothing to say on it. It has zero meaning or utility in their world view.
24 - Dave Nalle
>>Such as - as I mentioned in the original post - justice. Mention justice and the so-called "conservatives" just go mum. They have nothing to say on it. It has zero meaning or utility in their world view.<<
This is so basically untrue that I can't believe you're saying it. Conservatives certainly beliefe in justice - what do you think the rule of law promotes? Do you think they don't believe in the criminal justice system? That seems hard to believe with all the executions under Bush in Texas. That was certainly a form of justice.
What conservatives may not believe in is the artificial, manufactured concept of 'social justice', the idea that society has an obligation to make everyone equal regardless of merit. That's an interesting political theory, but it's not the essence of actual justice. When you come at them with that as your definition of justice it's no wonder that they give you a blank stare. They don't want to argue with the crazy person.
Dave
25 - Jon Sobel
No, you make a mistaken assumption - very common among conservatives, and I wish they'd get over it - when you talk about an "artificial, manufactured concept of 'social justice'" and describe it as "the idea that society has an obligation to make everyone equal regardless of merit." I certainly do not equate social justice with "making everyone equal." You're fighting a straw man if you think so.
"Social justice" means, among other things, that everyone is treated equally under the law - and you're delusional if you think that's the way things are today. More philosophically, it includes the idea that everyone has, in theory, equal opportunity under the law - remember "all men are created equal"?
Social justice is an artificial construct only in the sense that all human endeavor is such. It was conceived, and is valued, by the human intellect and the human sense of decency.