The rise and fall of the middle class

A long time ago for some, and still now for a few, land was and is the common property of a community, a clan or a tribe. Hunter gatherers, pastoral nomads and crop growers, each harvested their communal lands. But at some point things began to change. Land became the property of ecclesiastic and/or temporal rulers, who redistributed some of it to their subordinates. This first private appropriation was probably the consequence of military conquest, as history has recorded many later examples. The result was expropriation, slavery and serfdom. The natives were put to work. It may have begun in Mesopotamia or Egypt, but it would spread to other places. Meanwhile trade was developing and exchanges began to use metal money as an intermediary measure of value. This gave rise to the arcane world of banking, the intricate manipulation of cash and credit, and the appropriation of interest.

Monarchs had privatised the means of production (land) and merchant bankers had privatised the means of exchange (money), leaving a large mass of bonded labour and an urban intermediary group who owned the tools and the knowledge to make things. This middle class would develop art, science and industry. It would end up challenging the rule of land owners and, allied to bankers, would overthrow it. The transfer of power accompanied a rural exodus and the changing capacity to levy troops. And it reinforced the private “nature” of property with laws and constitutions. The proprietors of land, money and tools, of the means of production and exchange, made an alliance to extract value from labour. Three parties (often reduced to two because bankers lack troops) that struggle politically over surplus value, over how much can be taken from labour and who gets what. This alliance occurred in ancient Athens and later in Rome. It led to wealth, empire and decline.

In antiquity the development of capitalism was held back by a dependence on muscle power, and obstructed by slavery. As the number of slaves increased, so did the variety of their functions. They ended up filling all the middle class arts and crafts, and that put an end to inventiveness, innovation and development. When the triple alliance formed again during the 18^th century, servility was regressing and engines were replacing muscles. The middle class was able to expand its capacity to make things, to imagine new processes and accelerate production. By 1900, barons of industry were more opulent than banking magnates or landed aristocrats. The fossil fuelled revolution was under way, and the fundamental contradictions of capitalist exploitation took on new dimensions.

Having taken a part of labour’s produce, what does property do with it? The produce can be consumed as such, or it can be traded for other forms of consumption. In the early Middle Ages kings and overlords would constantly travel with their retinues from one domain to the next. And wealthy Romans had rare and exotic goods coming from Asia and Africa. For most of history the main forms of investment were land and slaves. Increasing them largely depended on conquest or marriage. Merchants, however, were investing in the production of goods and in transport from the start. Max Weber linked the rise of modern capitalism to the Protestant ethic, that their strict lifestyle valued investments over consumption. But this priority has always been the rule of commercial enterprises. Merchants would only spend ostentatiously when they went into politics (vid. the Medici). What was concomitant with Protestantism was movable type printing, the notion of mechanical mass production and an accelerating circulation of ideas. Publishing became a lucrative business. And gunpowder led to industrial foundries to make the guns. Both gunpowder and wood-cut printing had come from China via the Middle East, but movable type and firearms were European inventions. They had little to do with religious ethics, but they played a prominent role in the development of capitalism.

Capitalism has ancient roots in trade and territorial conquest, but its modern expansion was largely due to technological innovations. Physics, chemistry and biology made progress in the 18^th century, and they have been the motor of productive capital investments ever since. In the past artisan guilds had protected their skills and knowledge with secrecy and initiations. The constant technological and conceptual transformations introduced new forms of protected property with patents and copyrights. This new property introduced a new kind of owner, the industrial entrepreneur. His wealth does not come from land or trade, though he is associated with both, it comes from the exclusive production of something with a brand name. With the exception of a few artists, production had previously been anonymous, but that changed in the 19^th century, some brand names and their products became synonymous (Mackintosh, Hoover).

Land was privatised by military aristocracies, credit was privatised by merchant-bankers and tools were privatised by industrial entrepreneurs. Labour was left with its bare hands. However, the accumulation and concentration of property and wealth seems to follow a secular cycle. Wealth concentrates in a few hands and then momentous events lead to its wider redistribution, to a new concentration and so on. For the two previous cycles the levelling of wealth came with Napoleon’s continental wars and two World Wars, not to mention revolutions in France and then in Russia, Italy and Germany. Thomas Piketty has compared the present concentration of global wealth with the situation in Europe prior to 1914, and to the situation in France prior to 1789, without drawing any conclusions. He understandably refrained from predicting that the same causes would have the same effects. And it is in fact difficult to imagine what violent revolution and total war would be today, other than the nuclear annihilation of the Northern Hemisphere. But it is just as hard to see how the 1% (or even the 0.000,001% who own as much as the poorest half of humanity) could be gently convinced to relinquish its power and redistribute its property. The working class is content with the necessities of life, a home, a means of transport, seasonal clothing and a living wage. The middle class – whose role is to invent new stories, new concepts and trends, new processes and tools – needs to invest for future returns. It needs capital for education, research and experimentation in all domains. The aspirations of both classes have been increasingly frustrated over the past two or three decades, homelessness and student debts being the two most obvious symptoms. The concentration of wealth is taking all available resources, and the laws of profit insure that accumulation accelerates like compound interest.

Working class and middle class do not mix much. There is some passage both ways, but the two keep to themselves and are equally contented with their status. This is true when both classes are able to satisfy their aspirations. When that is no longer possible, they tend to merge in a common discontent. The concentration of property deprives the middle classes of the capital they need to achieve their aims, and it forces the working classes back into servility. Both groups lose their social standing, both are déclassé, which gives them a shared perspective and an unusual unity. The alliance between aristocracy, bankers and urban middle class is broken, and the rumblings of rebellion can be heard. In the past this has brought civil and international wars, and the process seems to be repeating itself. Social tensions are rising everywhere and are being distracted by the War on Terror. There is fighting in Afghanistan, Iraq, Somalia, Libya, Sinai, Sahel and particularly in Syria, where nuclear powers are supporting opposing factions, which makes it a likely flash-point for another world conflict, albeit a cold one. And though Russia and America have not shot at each other yet, they are killing each other’s proxies. So that Cold War 2 may have already begun, and Russia is winning the first round on points.