Introduction to Class Analysis

The purpose of this blog is to attempt to provide an in-depth analysis of current events by trying to provide an understanding of how they reflect relationships between the upper class and the rest of us. Before I can do this, however, I need to explicate what I mean by "social class." The issue of social class is complex and has been long debated. It bedeviled Karl Marx, who's credited with the most penetrating analysis of economic and social classes in capitalist society. However, Chapter 52 in the third volume of Capital, entitled, "Classes," contains four paragraphs in which he attempts delineate social classes on the basis of the source of income. It abruptly ends with a notation from Frederick Engels, "Here the manuscript breaks off."

Sociologists and social theorists have been debating the structure of capitalist societies for nearly 200 years. European scholars, especially the British, acknowledge the class basis of capitalism. However, in America, the existence of social classes is been subject to debate, with some, such as Dennis Wrong, claiming that America may have inequality, but does not have distinct social classes. Studies on social class identification of Americans indicate that practically everybody, including members of the upper and working classes consider themselves middle class. I believe that not only does America have social classes, but that the upper class has been increasing its power over American society over the past 30 years to the point of oligarchy.

Pantheon of the Left

So what do I mean when I use the term "social class"? The most fundamental characteristic of a social class is its relationship to the material surplus. Another, more prosaic term for the material surplus is "wealth." The material surplus consists of those commodities and products that are not consumed on the spot in support of life, but which have an exchange value in a market, which can appreciate or depreciate depending on demand. The usual sources of wealth are money, property, ownership of productive enterprises, stocks, and bonds. Given the complexity of contemporary investment forms, let's just say that these forms of wealth provide income that is based upon the labor of others. This would include everything from interest on bank accounts to profits from hedge funds.

The upper (or accumulating) class by definition consists of members of the social category that have first claim to the surplus. In capitalist society, the first claim to the surplus is profit. That is, that portion of the surplus that can be defined as profit is expropriated by people defined as owners or investors. I indicate that this group is a social category, suggesting that it is defined from the outside rather than from the inside. That is, members of the accumulating class may or may not be aware of their own class interests.

At this point, I must add that there are other claims to the surplus that compete with profit. The second claim to the surplus is that income that accrues to workers in excess of that which is expended on the necessities of life, such as housing, food, healthcare, transportation to work, and, in today's world, access to the means of communication. Given the impetus of capital, labor is always too expensive. For Marx, this was the fundamental contradiction in capitalist society. The third claim to the surplus is that made by the state in the form of taxes. The accumulating class always seeks to lower taxes, because taxes remove that portion of the surplus from their direct control. They must contend with other constituencies, such as unions and nonprofit organizations over the distribution of the surplus that is appropriated by the state.

Social class has most fundamentally a material dimension; however, it also has political, cultural, and historical dimensions. Let me describe these as briefly as I can. The political dimension is most commonly associated with the state. Not surprisingly, the upper class has much more power relative to the state than other classes. However, there are other institutions that maintain the interests of the upper class that are much more to their liking, such as the corporation. Corporations, by their very nature, are controlled at the top by upper class members and institutions (e.g., CEOs, CFOs, banks, large investors). Although in some corporations, such as General Motors, there may be a seat at the table for organized labor, in most cases, the boards of directors are dominated by members of the upper class who usually sit on boards of directors of several interlocking corporations. Almost all major corporations have representatives from banks and investment houses on their boards. The upper class tends to have an ambivalent relationship with the state, especially in democratic societies where that is the one area in which their power can be contested by organized masses. They much prefer power to be vested in non-state entities such as corporations, in which they have much more control as owners, investors, and managers.

Thus, the right-wing mania for privatization of government functions reflects a class interest in upper-class control of government functions. As a matter fact, this provides a double boon for the upper class, because not only do they gain control over government functions, but government expenditures then provide additional sources of profit for the accumulating class. For example, in the Iraq and Afghan wars, there were actually more employees of private security corporations in those countries than American troops. These corporations provided a variety of services to the military, such as transportation, food services, security for State Department officials, and so forth that cost the military much more than if such services have been provided by government employees. Instead of paying a Pfc. to drive a truck, such services were provided by private firms who were paying truck drivers in the neighborhood of $100,000 a year, not to mention the additional costs of administration and profit. In many cases, corporations, such as Halliburton and its former subsidiary, KBR, provided either shoddy work, double billed the government, took a cut and subcontracted services to local providers, or performed no services whatsoever.

The cultural dimension refers to the nonmaterial basis of society. At one time, social theorists tended to distinguish between high culture and folk culture, with one emanating from the upper classes and the other emerging from the experiences of the masses. More recently, the revolution in telecommunications created a cultural sphere in which privately controlled media empires are able to heavily influence ideas proliferating in a society. It is not surprising that Robert Putnam, a political scientist and the author of Bowling Alone, found that the deterioration of civil society in America began with the advent of television. What was happening was that time formerly spent talking with family, friends, neighbors, Lodge members, union buddies, sports teammates,  and attending meetings of civic associations, unions, PTAs, fraternal orders, and the such, people were staying home and watching TV. The TV was telling them what the ideal life was in capitalist society, who the enemy was, and showing them what they needed to buy to actualize the American dream and become acceptable to the alienated other. It was communication down the system from elites to masses. Tastes could be shaped, new problems could be invented, such as halitosis, restless leg syndrome, or status panic, for which a product was available to solve. Political discourse has deteriorated to sound bites and political candidates are sold like any other commodity.

The historical dimension refers to the ongoing linear history of the American accumulating class, beginning perhaps, in the North with the Boston elite, and large slave-holding landowners of Virginia. The American Civil War can be viewed as a consequence of the split between Southern, landholding elites and northern industrial capitalists. Certainly one of the economic consequences of the Civil War was the destruction of the Southern agrarian economy. The slave economy had to be rebuilt by breaking up large landholdings into smaller sharecropping parcels and rented to tenant farmers. The subordination of capitalist elites in the South and West to the industrialized North lasted for about 120 years.

With the election of Ronald Reagan in 1980, a coalition of Texas oilmen, California real estate developers, defense contractors, and operators of the leisure industry were able to assume control over the Republican Party. Since World War II, the industrialization of the West and the South was able to take place partially because of the largess of the state, especially in terms of tax breaks for the oil industry, the placement of military reservations in those states, and the funding of military contractors based in those regions, such as the Lockheed Corporation, McDonnell Douglas, and TRW. The northeastern sector of the class of capital, which included the Midwest, was essentially comfortable with the social contract between labor and capital in which unionized laborers would engage in collective bargaining with big capital; labor peace was exchanged for a living wage and good benefits. However, because of international competition, American capital was suffering from a declining rate of profit.

The northeastern sector of American capitalism was referred to as "the Eastern establishment." It was the corporate liberal faction of the Republican Party. It was probably best represented by Nelson Rockefeller: socially liberal, fiscally conservative, believed in Keynesian economics, and accepted the welfare state. The right-wing of the Republican Party, whose vanguard were the supporters of Ronald Reagan, wanted to destroy the welfare state, were anti-Keynesian, championed neoliberal economics of Milton Friedman and Fredrick von Hayek, socially conservative, and fiscally profligate, so long as government expenditures ended up in corporate coffers rather than public entitlement programs.

The recent history of the United States has been a struggle between this faction of the accumulating class and the rest of America, with the policies of the hard right being implemented: military adventurism primarily in the defense of the oil industry, increases in military expenditures even in peace time, destruction of the social safety net, the privatization of public services, including military, education, prisons, and police. They have been extremely successful in destroying those organizations that constitute the traditional base of the Democratic Party, including unions and nonprofit organizing groups such as Acorn. Because of these depredations, the Democratic Party has had to cater to the more liberal sector of the accumulating class, at least on social issues, such as Wall Street. Bill Clinton, supposedly one of the most astute political thinkers of his time, realized that if the Democratic Party was going to be viable, they had to become more "business friendly." Thus the Democratic Leadership Council was founded in an effort to appeal to that sector of the "business community" to which the policies of the hard right were anathema. Thus, the Democratic Party tends to look more like the Republican Party in the post-World War II years prior to 1980.

Now that the material, political, cultural, and historical dimensions of the accumulating class have been delineated, I conclude this essay with a discussion of class consciousness. That is, when is a class of itself for itself? This was another issue that created problems for Marx. Within any hierarchy, some portion of the relations of domination and subordination are hidden. It is in the interest of the dominators to hide or cover up those aspects of control that are inimical to the interests of the dominated. Within the accumulating class there are a number of institutions that maintain class cohesion, including prep and boarding schools, elite universities, financial elite clubs, country clubs, churches, and the Republican Party. This does not mean that there are not fractionations within the accumulating class. For example, there are tremendous ideological and cultural differences between Jews in the upper echelons of Goldman Sachs and Texas oil billionaires. They may differ over such issues as church/state relationships, abortion rights, gay marriage, and even such economic issues as effective tax rates; however, they all believe in the self-regulation of their own industries and the use of American political power to protect markets.

What unites the accumulating class is their common interest in maintaining their wealth and accumulating more. Because of their crosscutting institutions that create similar outlooks and reinforce their economic and political interests, it is the one true class in American society. It is a class of and for itself.

For the rest of Americans, nearly all of whom view themselves as middle-class, class consciousness has not existed since before World War II. The movements of the 1960s involved biological categories: race/ethnicity, age (youth), gender, and sexual identity. At their most radical phrases, they placed their resistances in the form of class consciousness. This was true of the Black Panther Party, Students for a Democratic Society, and early organizations of the Women's Movement, such as the Redstockings. The right-wing movement of dispossessed white males of the early 1990s was decidedly non-class oriented, attacking the state, women, and minorities. It never evolved the notion of corporate involvement or class conflict, even though they were victims of right-wing initiated government policies that favored corporations over individuals, restricted opportunities for social mobility, and favored the accumulating class interests over those of their own. They were never able to develop a comprehensive view of the enemy. Instead, with the exception of Jewish bankers (not the banking establishment itself) and federal enforcement officers, their hatred was directed at those who had less power than themselves, railing against welfare and entitlement programs.

It is ironic that as of the writing of this blog, we are seeing the possible emergence of a labor movement that has identified its opponent as big capital and the Republican henchmen. As the workers in the Midwest, especially Wisconsin, resist the predations of Republicans against public employees, stripping them of bargaining rights, the talking heads at Fox News are screaming that workers are engaging in "class warfare" even though the war was started by Ronald Reagan almost exactly 30 years ago with the decertification of the air traffic controllers union, which, along with the Teamsters, supported his run for presidency.