The surge in inequality since 1980 has been driven from above, by the top 10 percent, and even more so by the top 1 percent and the even smaller fractions of pharaonic wealth. The other 90 percent have not all been impoverished, but they have been abandoned. This has given rise to a bitter journalistic and academic literature in the Global North, an interesting counter-position to consultancy and development bank dreams of the “rising middle class” of the Global South.
To stiffen bourgeois resolve in this moment of crisis and liberal self-doubt, Torben Iversen and David Soskice’s Democracy and Prosperity (2019) presents a homage to “advanced capitalist democracies” (they show more deference to capitalism than to democracy, which is held responsible for the inequality). “The essence of democracy,” they aver, is “the advancement of middle-class interests.”
Iversen and Soskice, both prominent institutional economists, argue that the middle class is aligned with capital via two key mechanisms. One is “inclusion into the wealth stream” created by capital accumulation. The other is the welfare state: the tax-and-transfer system ensures that the gains of the knowledge economy “are shared with the middle classes.” It is precisely this “inclusion” and “sharing” between capitalists and the middle class that is found by recent inequality research to be terminating.
In the beginning, the neoliberal dispensation did favor middle-class interests. The opening up of public services to private business provided some gains for lucky segments of the middle class. Public funding of free private education places, through a voucher system as in Sweden today, gave middle-class parents a welcome chance to send their children to well-kept schools with few immigrant or working-class children. Corporate care has been less popular, and prone to public scandals, but is still accepted by many as a familiar accompaniment to austerity and the scarcity of public provision.
On the other hand, the exclusion of the middle class from prime urban housing continues apace, and income and wealth gaps are widening. Meanwhile, environmentalism is making ever-deeper inroads into the educated middle class, explicitly putting planetary survival and ecological sustainability above the interests of capital.
As the median is the exact middle of a distribution, the ratio between the incomes of the top 1 percent and the median is a good measure of the distance separating the upper from the middle class. In the United States, this ratio jumped from 11:1 to 26:1 in the years 1980–2016. In the UK and Sweden, it rose from a relatively low 3:1 to around 10:1. In Germany the ratio also climbed, whereas in France it fell slightly from an already high 11:1.
Because of income polarization, the size of the middle-income class — those with incomes between 75 and 200 percent of the median — has shrunk in the OECD area, and opportunities for entering into it have narrowed. Upward mobility into tertiary education has stalled since 1975, while the risk of downward mobility increased substantially in the 2010s, most strongly in the UK.
COVID-19 has continued, and in several countries accelerated, the rupture between the upper and middle class. In the United States, the wealth of billionaires increased by 44 percent from mid-March 2020 to late February 2021, at a time when 50 percent of people with a college or higher education were reporting difficulties paying for usual household expenses. By the end of July 2020, the wealth of British billionaires had grown by 35 percent over the year before, while almost one in five employed middle-income earners reported a decrease in savings, and half of them no change.
Middle-class children are barred from an increasingly exclusive elite education system, spanning kindergartens to selective top universities, by the economically unmatchable investments upper-class parents are making in order to prepare their offspring for plum positions in the labor market.
The Yale Law professor David Markovits has calculated that these investments in elite training above median expenditure on education have an equivalent value to an inheritance of $16.8 million. The result is that “rich children now outscore middle-class children on the SAT by twice as much as middle-class children outscore children raised in poverty.”
Biden’s Middle Class Task Force under Obama failed with respect to childcare and college accessibility, as well as to health insurance. The 1 percent in America has broken off contact not only with the national middle class but with all the other Western upper classes and has retreated into a caste of its own.
Over the whole OECD area, aspiring children are facing lower mobility opportunities. Nor is this all. The very core of middle-class work is being undermined. Middle-class work has had three major forms: self-employment, office work of some delegated authority, and the professions. Over the long run, the self-employed petty bourgeoisie, typically shopkeepers and their rural branch of farmers, have declined in numbers and importance.
In the UK, though, there has been an increase of urban self-employed business-owners in this century. However, this growth is driven entirely by sole traders, most of whom are closer to the precariat than to the historical petty bourgeoisie, whose shops are drastically shrinking in number. Their mean annual income in 2015–16 was £21,000, a third of average employee income.
Office workers and lower-level managers are being subjected to what David Boyle has aptly called “digital Taylorism,” before being dispensed with altogether, as has already befallen large numbers of post and bank clerks, for example. A white-collar office job is no longer a secure and relatively comfortable escape from the working class, but rather the main target of automation.
The third classical sector of a middle-class job was in the professions, occupations based on high and long education, handling particular kinds of knowledge, inaccessible to the public. They include ancient professions such as teaching, medicine, law, in many countries also the civil service, and the twentieth-century “semi-professions” of nursing and social work, to name but two.
For a long time, the professions were respected by and seen as uninteresting to business and capital. In the German nineteenth- and early-twentieth-century tradition, they were often summed up as Bildungsbürgertum (the cultured bourgeoisie), which was more or less on par with the Wirtschaftsbürgertum (the economic bourgeoisie). Sociology has distinguished the professions from the business world, as oriented to the cultivation of knowledge and to public service, rather than to profit.
The Professions Undermined
This middle-class professionalism is now under attack — lawyers largely exempted — and in the process of being destroyed. The attack comes from several angles, which may be summed up as invasion by managerialism. It involves a relative devaluation of specialist knowledge, a loss of respect for it. In practice, this means first of all a subordination of professionals, teachers, researchers, physicians, nurses, engineers, and others, to administrative managers, in schools and universities, hospitals, and enterprises.
The practice of professional knowledge is submitted to auditing, evaluations, and sanctions by managers, deriving from an institutionalized mistrust of professional autonomy and of professional ethics. Professional cognitive practice and ethics are subjected to pervasive cost- benefit calculations, often specially invented ones of internal quasi-markets, such as university administrations charging university departments for the use of university premises. These cost-benefit inventions are also part of a particularly heavy anti-professional attack under the banner of commerce.
The imposition of an ideal norm of commercialism — the instrumental opposite of the professional mindset of intrinsic values, of knowledge, of service to needs, of the impartiality of law and regulation — is operated both by private commercialization (of schools, hospitals, prisons, and so on) and by the so-called “New Public Management” of tax-financed institutions. Internally the latter are supposed to work as firms on a quasi-market basis, buying and selling services to each other, and externally they are required to hire private firms to provide public services.
In this way, education, health care, and social care have become profitable areas for capital accumulation, attracting great interest from the “economic bourgeoisie,” knocking down the “cultural bourgeoisie” on the latter’s old terrain.
The middle-class professions should not be idealized, as they could very well become closed, conservative, complacent, and inefficient, with repetitive routines. But this is not inherent in professionalism, and being a teacher, a doctor, or a civil servant was once a great source of middle-class pride and self-confidence. That pride and self-confidence are now being trampled upon, and a managerial whip is overruling collegiality. A few succeed by escaping into an upper-middle class of managers and “star” professionals, but for the rest, the present — and probably the future as well — consists of instability and a downward trajectory.
A New Politics
The dialectic of industrial capitalism, which Marx analyzed and predicted with impressive accuracy, is no longer operating in the Global North and has been stymied in the South. Postindustrial capitalism is no longer producing a growing, ever more concentrated working class. That process ended in the North in the period of 1965–1980, when working-class social weight peaked. In the Global South, manufacturing employment stalled in the 1990s, and industrial employment — including construction and mining — around 2010.
Even if the sectors of the working class lost to the Right could be won back, the labor movement is only a necessary component of egalitarian politics, no longer sufficient as its natural center. Decisive to any successful egalitarian politics in the postindustrial era is a positive middle-class policy of the Left.
This is a very delicate and difficult issue, because an egalitarian middle-class policy cannot abandon the most vulnerable, nor the bottom half of the population to privatizations and income stagnation, nor the rights of employees against employers. It is the opposite of Blairism and the right-wing middle-class orientation, which has destroyed the French Parti Socialiste and the German SPD, the opposite of turning one’s back on the people, of carousing with capital while representing an upper-middle-class view of the world.
The task is to convince the middle class — or substantial parts of it — of the advantages of equality and human solidarity over neo-pharaonic privileges and rewards for capital and its children. The starting point is that postindustrial, financial capitalism is abandoning and excluding the middle class, creating a 1 percent versus the 99 percent society. Whoever governs these dismal democracies, it is certainly not the median voter of economic theories of democracy. “Average is over” could stand as the neoliberal epitaph for the middle class.