America’s Metastasizing Class Wars
America’s Metastasizing Class Wars by Charles Hugh Smith for Of Two Minds
Class wars are the inevitable result of an economic system in which ‘anything goes if you’re rich enough and winners take most’.
The traditional class war has been waged between wage-earners (who sell their labor) and their employers (owners of capital and the means of production). These classes have been assigned various names (proletariat, bourgeoisie, capitalists, etc.) but these broad class definitions don’t describe all the class conflicts emerging in the modern U.S. economy.
Before we dig deeper, let’s stipulate that ownership of various forms of capital still defines class: the wealthy live off unearned income skimmed from capital and everyone else lives off earned income from selling their labor. (Those without either source of income become dependents of the State).
What you own or don’t own defines your class interests, but these have been fragmented into a multitude of sub-classes. Six years ago I took a stab at definingAmerica’s Nine Classes: The New Class Hierarchy (April 29, 2014), to which I would now add a tenth class, gig economy precariat, who paradoxically may own one of the means of production such as the car needed to become an Uber driver, but the precariat doesn’t own the controlling means of production, which is the Uber platform.
As a consequence, all the profits flow to the owners of the platform. Since the gig economy is not traditional hourly employment, there is no employer-provided security at all.
My taxonomy of class in America:
1. The Deep State.
2. The Oligarchs.
3. New Nobility.
4. Upper Caste.
5. State Nomenklatura.
6. The Middle Class.
7. The Working Poor.
8. State Dependents.
9. Mobile Creatives.
To which we add a new category of the working poor who lack even the minimal security of the conventional Working Poor (such as Amazon fulfillment center workers):
10. Gig economy precariat.
For the purposes of today’s discussion, let’s focus on the conflicts between four classes:
1. The Central State, which includes the elected government, the permanent Deep State, the Federal Reserve and and the managers/technocrats who run the State Nomenklatura.
2. The owners of Capital and political influence (The Oligarchs and New Nobility).
3. The Upper Caste, the top 10% of the private sector.
4. The lower classes of wage-earners and state dependents.
It comes as no surprise that there is no class conflict between the State and the Oligarchs / New Nobility since ours is a state-corporate system in which the state enforces the privileges of the super-wealthy /corporations, as the political class depends on the owners of capital for campaign contributions. In return, the super-wealthy and corporations are awarded tax breaks and subsidies which lower their tax burdens below the rates paid by wage-earners.
The conflicts between the Central State and the Upper Caste which pays the majority of income taxes are sharpening. While Social Security taxes weigh heavily on lower-income workers, the bottom 50% pay almost no federal income taxes and those between 51% and 89% pay a modest percent of all income taxes.
Unlike the managers/technocrats of the State Nomenklatura who are guaranteed benefits and pensions (since the state can always print the money to pay them), the private-sector Upper Caste must rely on 401Ks and their own private wealth–all of which is exposed to the hazards of state actions (raising taxes, firing up inflation, etc.) and whatever market forces are still outside the control of the Federal Reserve.
The Upper Caste resents the heavy taxes they pay as the state fails to provide even the basics of security and infrastructure. From the point of view of the Upper Caste, the state provides substandard education for their children, potholed roadways, modest Social Security and no healthcare until retirement (Medicare).
Upper Caste entrepreneurs resent the heavy regulatory burdens and the privileges lavished on corporations and the super-wealthy.