Piketty’s stats and the problem with class conflict

The late Saul Alinsky used to say that politics is a struggle among the haves, the have-nots and the have-a-littles.  He said the outcome usually depends on which side the have-a-littles choose.

Reading Thomas Piketty’s big new book, Capital and Ideology,  reminded me I’d forgotten this important truth.

The USA and much of the rest of the world is governed in the interests of a political and economic elite and not a majority of the public.  I want a politics that represents the interests of the majority of the population.

But there are objective reasons why this is harder than it seems.  If you look at economic class in terms of a top 10 percent in income or wealth, a middle 40 percent and a bottom 50 percent, you see that there is a difference between the middle class (the have-a-littles) and the lower class (the have-nots)

I had come to think that the big problem of American politics is that so much of it is a conflict of the top 0.1 percent of income earners with the next 9.9 percent, leaving the rest of us behind.

The top 0.1 percent, in this interpretation, are the millionaires and billionaires that Bernie Sanders denounces.  The next 9.9 percent, very roughly speaking, are highly paid professionals, the “professional managerial class,” who tend to be more socially liberal, but whose economic interests are different from the majority.

Matthew Stewart wrote a good article about this in The Atlantic a couple of years ago.  The conclusion is that we the American majority have to stop thinking we have to choose between the plutocrats and the PMC and unite in our own interests.

That would make sense if economic inequality were the same as it was in Britain, France or Sweden around the turn of the previous century, as reflected in the chart above (taken from Piketty’s book)

But it’s not.  There is now a big middle class, in between the top 10 percent and the bottom 50 percent, as shown in the chart below (taken from an article co-authored by Piketty).

Click to enlarge.

In western Europe and the USA, the middle 40 percent aren’t doing too badly.  They’re open to the politics of a Margaret Thatcher or a Ronald Reagan.

Instead of claiming a larger share from the haves, they’re told they need to worry about the claims of the have-nots.  Even in parts of the world where economic inequality is greater than in Europe or the USA, there is a middle class with something to lose.

The top 10 percent and the middle 40 percent add up to half the population.  But they are a majority of the voters.  The chart below shows how much voter turnout by the top half of income earners exceeds the bottom half in France, Britain and the USA.

Click to enlarge.

This shows that a political platform of downward redistribution of income will not necessarily be popular, in and of itself.  It would just stir up the resentment that Donald Trump has learned to exploit so well.

The other problem is public policy is not just shaped by voting and public opinion.  It is shaped by corruption and by raw power.  Most people who possess wealth and power understand things very well.

Tobacco company executives understood the health effects of smoking well before the public did.  Oil company executives understood global warming well before the public did.  They just didn’t care.

U.S. government policy does not necessarily reflect public opinion, as the Gilens-Page study showed.  Politics in the USA is often a contest between conflicting business interests, as political scientist Thomas Ferguson has showed.

Corporate interests and rich people influence public policy by means of campaign contributions, by lobbying and by providing second careers for retired politicians and government officials.  This negates the power of public opinion, except when the public is aroused and united.

I’ve often wondered how much this is true of other countries.  The great American muckraking reporter, Lincoln Steffens, once traveled to Britain and France.  He concluded that corrupt monied interests had just as much power in those countries as they did in the USA, but the British were too self-satisfied and naive to know and the French were too cynical to care.

Of course this is just one person’s opinion, based on sweeping generations and national stereotypes, but I suspect that many of the countries moving in the same direction as the USA are doing do for the same reasons.

The financial community uses its power to impose its views.  No political leader wants bankers and financiers to “lose confidence” in their administration and drive interest rates up and stock prices down

International banks, including the International Monetary Fund, demand borrowers impose “austerity,” which means higher taxes, fewer government services, higher prices and lower wages.  Some leaders think they have to impose such polities in order to attract investment or, in Third World countries, to keep the CIA away.

Thomas Piketty began his book by saying that it is not about class conflict, it is about the conflict of ideas and the struggle for justice.  Class conflict is real, but over and above class conflict, there needs to be some idea of justice and the common.

LINKS

The Birth of the New American Aristocracy by Matthew Stewart for The Atlantic.

Under the Influence by Martin Gilens for Boston Review.

Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election by Thomas Ferguson, Paul Jorgensen and Jei Chen for the Institute for New Economic Thinking.

Fifty Shades of Green: High Finance, Political Money and the U.S. Congress by Thomas Ferguson, Paul Jorgensen and Jei Chen for the Roosevelt Institute.

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One Response to “Piketty’s stats and the problem with class conflict”

  1. silverapplequeen Says:

    The trouble in America (USA) is that the have-a-littles think that they’re going to make it REAL BIG & that’s why they vote with the have-a-lots. They identify with them because they think they’re going to be with them ONE DAY. Never mind that it’s never going to happen. That’s the crap shoot of the American dream & the operative word here is “crap”. Why do you think the state-funded lotteries are so popular? Because the have-a-littles think they’re gonna hit the BIG ONE & be rich like the have-a-lots. So that’s how they vote.

    Like

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