Waiting for a middle-class revolt

As with any commodity, the cost of labour is the cost of its renewal. This means the upkeep of individual workers and their capacity to produce new generations. It includes food and clothing, health care, housing and transport, schooling for their children and some left over for entertainment. These necessities are kept at a minimum by a reserve of labour competing for available jobs. This labour reserve has mostly consisted of unqualified rural migrants forced to leave their ancestral lands for various reasons, from enclosures, potato blight and land grabs to civil war and climate disruption. Hence the competition for jobs is strongest at the bottom of the wage scale, and it weakens as the necessary skills for employment increase. This skills gap is the result of family upbringing and education. It allows the middle-class to maintain its status and climb the social ladder. When most of the population – not to mention the world – is barely literate, knowledge and skills give the upper-hand to those who have them. This began to change after WW2, with education, education, education, not only in the developed world, but in every newly independent nation. Today’s middle-classes face global competition, and the consequences are detrimental.

Just as labour has a cost that allows its renewal, so does the middle-class. The price is higher but they are fewer in number. The middle-class is more demanding with regards to lifestyle and education. And their resulting capabilities in all domains seem to justify their higher cost, as long as there is no rivalry. The first breach was working-class youths going to university and showing they could excel. But their numbers were relatively small, and they joined the middle-class fold without much disturbance. What was more troubling was the access to middle status by minorities and even legal aliens. Up till the mid-20^th century the world’s middle-class was essentially of European stock. This slowly began to change and is no longer the case. Their skills and knowledge are shared by rivals around the planet who are less demanding.

Traditional members of the middle-class have lost their monopoly and find themselves in the same situation as the working-class, that of having a reserve in waiting ready to replace them. And this rivalry tends to push down salaries. And those members of the middle-class who still run their own businesses in retail, health care, food, farming, etc., are continually being absorbed by larger entities, and end up under contract or salaried. Global competition has reduced middle-class incomes, has brought its status closer to that of the working-class, and has widened the gap with the upper-class. This decline has occurred in all developed nations, whereas in developing nations the middle-class has experienced a surge in numbers and wealth. The middle-class has faded and blossomed simultaneously in different parts of the world, but now it seems to be waning everywhere. But, even if the middle-class and the working-class do find they have common objectives, they are still faced by the armed mercenaries of the ruling class. A totalitarian police state is possible and has often accompanied the end of empire. And it is all the more possible because of twenty odd years of practicing the repression and wholesale murder of men, women and children, and because career soldiers are cut off from society in a closed fraternity where obedience to a superior is the primordial rule of conduct.

The few who hold the reins of power hold them tight. They have to be severely weakened before they let go. And ultra-violence does not deter them. Remember the Paris Commune of 1871, the Berlin Uprising of 1919, the last Kronstadt rebellion of 1921, and all the other bloody repressions from Nanking (1937) to Santiago (1973), to Grozny, Fallujah, Aleppo, etc., etc. The forces of wealth and power can only be confronted successfully by vastly superior forces. This has sometimes been the case, as in Portugal for the 1974 “Carnations Revolution”, or Iran’s 1979 “Islamic Revolution”. Those reactionary forces can also be worn down and demoralised, and their recruitment can dry up, which happened in China, Vietnam and Cuba after lengthy guerrilla and civil wars. However, none of these past strategies can apply to today’s world, where a few air traffic controllers can threaten to bring everything to a standstill, where strong popular movements build themselves and come together on social media, where electronic surveillance is universal, and where Putin is experimenting to see if his power structure can function without internet. What is sadly missing is a unifying vision of a different society, something to replace Marx’s outdated concept of a proletarian dictatorship. If the increasingly déclassé middle-class and an impoverished working-class could join forces around a common project they would be irresistible, because together they control the functioning of everything. The social demands of “yellow vests” are an element, as are those of school children for stronger action against fossil fuels. But doctors, dentists, lawyers, engineers, architects, academics and all the corporate middle tier executives are still clinging on to their shrinking privileges, whereas they should be in the forefront of the ideological struggle for change. They have all been brainwashed, but a little more pain and stress, and their children’s bleak future, might revive their humanity.

The dustbins of history

Popular social revolutions never keep their promises. They end up as repressive authoritarian or totalitarian regimes. These repeated failures could be blamed on the impractical reality of an egalitarian society. After all history gives no examples, except perhaps among primitive tribes. And there were ancestral common usages of heaths and woodland, which survived waves of conquerors but not the greed of capital. However, there are no signs anywhere of an egalitarian urban culture, and the whole idea seems a ridiculous fantasy. Also equality contradicts the freedom to be stronger or weaker, richer or poorer, to lead or be led.

The notion of equal rights and duties for everyone goes back to Athens, to the times of Solon and Cleisthenes. Greece was coming out of its Dark Age, cities were growing, trade was expanding and wealth was accumulating in a few hands. The people were being submerged by debt and reduced to bondage. But, at the same time, the city needed a capable and willing army to defend it, a hoplite fighting force of free and equal citizens. Sparta had instituted absolute equality governed by a gerontocracy. Athens chose to give people a say and a vote. However, this early attempt at democracy – the demos were the tribal/geographic units of citizenry – excluded women, slaves and immigrants, as did military service. And the Roman republic was equally exclusive.

The ruling, owning class always needs a lower class to defend it against foreign threats and against the rabble, the slaves or the serfs. When slaves and serfs were freed, this lower class was promoted to middle class, and the three part division of society was perpetuated. This seems to be the model for stability. But the upper class gets regularly carried away by hubris, and neglects those on whom its power and wealth relies. This provokes revolt, rebellion and occasionally revolution. It is when the intermediary class feels it is not getting its due that social upheavals occur. Then, equality trumps freedom. But it is a form of equality where the middle class feels it can replace the ruling class, not one that shows any affinity with the proles. Universal equality is used and abused, but never seriously considered.

A revolution is always a coup de force. Some degree of violence is necessary, as those with power and wealth never abdicate with a smile and a bow. To overthrow the existing hierarchy, the revolutionaries need the force of numbers. They must call on the multitude to join their side. The disfranchised and destitute masses are promised political power and a redistribution of wealth. The people flex their muscles, realise their strength and, if the leadership is determined and efficient enough, they carry the day. But the old order does not evaporate overnight. There is resistance at home and intervention from abroad. The new government must fight for its survival, and to succeed it must be ruthless. The war on foreign encroachments can galvanise the nation, whereas war against its own leaves wounds that never heal. The war-government imposes martial law and polices peoples’ minds and attitudes. Traitors are denounced and dealt with.

Supposing that revolution gives power to the people to decide their destiny does not stand up to scrutiny. Yet the idea persists. This is because ordinary people show an amazing capacity to organise and get things done, when they are left to their own devices. But modern nations are vast and multiple, and these demonstrations have always been local and short lived. The various grids that keep the nation together are extremely centralised. Breaking the top-down exercise of power disrupts the centre-outwards processes of utilities, transport, trade and communications. The people’s power can be isolated and made to fail. And the centralised functioning of just about everything recreates a centralised organisation of political power, an organisation that can change its form but not its nature.

The latter day Romans, before the empire moved east and turned Christian, considered that morality was the source of good governance. This was epitomised by the stoic emperor Marcus Aurelius. But they neglected the logic of governing for the people. A more egalitarian society has better health and education, is more productive and inventive, and is generally happier. On the other hand, inequality means the rich fear for their lives and wealth, and must hire mercenary guards and armies for protection. Meanwhile all social functions are stifled. The mechanism of robber capitalism allows wealth to accumulate in a few hands, and gives them an infinite power of corruption. That mechanism is constantly being changed by new legislation, and the legislative process is where the people can influence decisions when they choose their legislators.

Laws are about what can and cannot be done (speech is to a certain extent outside the law). They are basically oppressive as they counteract free action, but they are also protective when they prohibit harmful acts. The question is: who needs protection from whom? As societies are divided in classes, do the rich need protection from the poor, or do the poor need protection from the rich? The poor are a potential danger for the rich, inasmuch as they might try to take those riches, but the rich are constantly taking profit and interest from the poor, who must exert their muscles and minds to produce commodities. And when the class divide deepens, the protection of the law is increasingly one sided in favour of the rich. This trend could possibly be reversed by elections, where a different legislature changes the law to protect the down trodden against predatory capitalism. But the electoral circus of TV commercials and yelling crowds, of gerrymandering and devious checks and balances, is unable to make such a change. To provoke it, something more radical has to happen. It occurred in the 20^th century because of total war following a collapse of the world’s financial structures.

Total war brings a nation together. Everyone is willing to make sacrifices, large or small. And the levelling effect of a conscript war – the death toll speeds up promotions – feeds back to civilians. In wartime the governing executive has exceptional powers, but to change the law it needs strong electoral backing. A winning war can bring that support, and encourage legislation that favours a wide majority of citizens. Today’s wars cannot be total, because the nuclear option insures total mutual destruction. Instead they confront professional mercenary armies with insurgents and civilians. They do not inspire patriotism and national unity. Far away and largely ignored, they are more divisive than anything else, and remain extremely costly. The US Treasury debt passed 100% of GDP in 1945. It is back there now and still growing.

The old recipe for bringing a nation together was never justifiable and is no longer effective. However, there is a menace far greater than ragged bands in flip-flops, armed with rifles, who want to hide their women from sight. A threat to all humanity, rich and poor, developed or not, that is climate disruption and species extinction. Confronting that danger could become a unifying struggle, bringing classes and nations together in a common front. There are signs of this happening among the generations that will have to deal with a modified planetary ecosystem (their elders are mostly petrified by the unfolding consequences of their inaction). But the capitalist behemoth rumbles on, getting bigger by the day and ignoring the cliff edge ahead. And for the countless numbers who have trouble getting by from one pay check to the next, it is the end of the week or month that preoccupies them, not the end of the world.

What could stop this lemming-like rush to oblivion is a debt crunch. The years of future incomes that have been spent cannot be redeemed. They will have to be cancelled by default, inflation or decree. In either case a colossal amount of supposed wealth will just evaporate. Humanity has wasted its future, unthinkingly for most, very profitably for some, but all will suffer from the backlash. It could be an occasion for thought, and for starting again along a completely different path. Profit and interest could become concepts that are only joked about. Unfortunately the signs are not pointing in that direction. Heavily armed police patrol the streets, prisons are full to bursting point, protest is gassed, cudgelled and mutilated, and those who hold power and wealth show no inclination for letting go. The consequence will not be a gala diner, and the outcome will be messy. Today’s children will inherit a wrecked society and a broken planet. And they can thank Margaret Thatcher for convincing the world forty years ago that “there is no alternative”… to extinction?

Trade and capital accumulation

Throughout history foreign trade has enriched merchants and the nations they traded from. It consists basically in moving goods from where they are abundant to where they are rare, and doing the same on the return journey. This sometimes needs intermediary stages and exchanges, and the classic example is the North Atlantic triangular trade, when cheap factory goods were shipped from Western Europe to West Africa and exchanged for slaves, who were shipped to the Caribbean and exchanged for sugar, which was shipped back to Europe. The general rule was to get back more value than had been laid out. And, though crossing oceans, deserts and mountains were dangerous enough to incur losses, though home demand might fail and devaluate stocks, fortunes were made and duly squandered.

Buying to sell is about obtaining more value out of the two successive transactions. But during the 18^th century, value began to be perceived as capital, and value as such could therefore be either invested or consumed. Though not immediately apparent, this meant that the ideal for foreign trade was to export consumption and import investments. The English cotton trade gave the example: import raw cotton, card, spin and weave it, add value and profit, and export it for even more raw cotton. And so the steam driven machines in England ruined India’s manual artisans. And even Indian cotton growers were abandoned when plantations in the US adopted cotton as their cash crop, making the transport shorter, safer and cheaper.

Trading consumption for investments around the world has enriched the nations that have practiced it. Profit, or surplus value, that part of production for which there is no equivalent demand, could be sent abroad and its value would come back as an investment, often as raw materials, guns for oil. However, the process supposes that there are winners and losers. The nation that exchanges its “surplus” consumption for investments expands it production and accumulates capital, whereas the nation that exchanges its investments for consumption does not. In the first case, capitalists can make large profits, as that share of production is sold abroad and does not depend on the home market. In the second case, local production must compete with the imported consumption and inevitably wanes, while the nature and distribution of these imports is a cause of government corruption.

Unfair trading was the principle of colonial empires. But the cost of maintaining colonial administration and order was then transferred to the cost of maintaining a subservient local ruler and a semblance of independent governance. The imported consumption that had provided colonialists with a European lifestyle was kept going by the local elites, and the flow of raw materials to the ex-colonial metropolis was not interrupted. This has enriched the industrial nations, and left their client nations undeveloped and dependent. However, some nations did manage to industrialise. Taiwan and South Korea were on the front line of the Cold War, which insured Western finance and markets. And then, along came China.

When the People’s Republic was proclaimed in 1949, China was in disarray after a couple of centuries fighting European, American and Japanese invaders, followed by a protracted civil war. The new regime had support from the USSR, which resulted in some transfers of technology and numerous Chinese students going to Soviet Union and Eastern European universities. But Stalin’s death in 1953 and the ensuing criticism of his politics and the personality cult around his person provoked a rift between the two allies - Mao Zedong’s own cult of Great Helmsman was just dawning – and by 1960 all relations were severed. For about a decade China was isolated from the rest of the world, with the exceptions of neighbouring North Korea and distant Albania. But then Nixon visited Mao in 1972, Mao died in 1976 and Deng Xiaoping came back to power in 1978.

China had nothing to sell but its labour, and it went about doing that with a vengeance. Applying the proven principle, it exported consumption and imported investments on such a vast scale that it became the planet’s workshop. This may have been Deng’s master plan, or it more probably was the logic of profit capitalism when it gets its way. China has massively accumulated capital. It has exported consumption and imported some raw materials, plus a lot of factories and technology. Or, more precisely, half factories, with the other halves owned by businesses that were outsourcing their production from North America, Japan and Western Europe. But the world market could not absorb these infinitely expanding amounts of Chinese consumer goods. So China has had to confront the problem faced by profit capitalism everywhere: the fact that profits have no corresponding demand and can only realise their value with credit (See previous posting). The Chinese are now as deeply in debt as the rest of the developed world and their exports have peaked. The global economic motor is about to stall, and there are no alternatives in sight.