Who are the new middle classes around the world? You'd be surprised how poor some are

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Who are the new middle classes around the world? You'd be surprised how poor some are

The International Labour Organisation has identified a rapid growth of 'the developing middle class' – a group earning between $4 and $13 a day

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• • Paul Mason, Channel 4 News
  • The Guardian, Monday 20 January 2014 20.00 GMT
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'Middle-class' protesters in Bangkok this month. Photograph: Camilla Davidsson/Demotix/Corbis

When a million people swarmed on to the streets of Brazil last June there was consensus that the protest was a phenomenon of the "new middle class" – squeezed by corruption and failing infrastructure. As the Thai protests continue, these too are labelled middle class: office workers staging flashmobs in their neat, pressed shirts.

But what does middle class mean in the developing world? About 3 billion people earn less than two dollars a day, but figures for the rest are hazy. Now, fresh research by the International Labour Organisation (ILO) economists shows in detail what's been happening to the workforce of the global south during 25 years of globalisation: it is becoming more stratified – with the rapid growth of what they term "the developing middle class" – a group on between $4 and $13 a day. This group has grown from 600 million to 1.4 billion; if you include around 300 million on above $13 a day, that's now 41% of the workforce, and on target to be over 50% by 2017. But in world terms they're not really middle class at all. That $13 a day upper limit corresponds roughly to the poverty line in the US in 2005. So what's going on?

The ILO researchers mined data from 61 household surveys across the world to come up with these figures. In the process they adopted a rough definition of the lifestyle of the sub-$13 group. The key markers were: families had access to savings and insurance, were likely to have a TV in the home and to live in smaller households (four people). They would typically spend 2% of their income on entertainment – plus they would have better access to water, sanitation and electricity. These, then, are the "winners" from globalisation: an expanding group for whom global growth has meant a serious rise in real income, year after year, compared with the recent near stagnation of incomes for working and lower-middle-class families in parts of the developed world.

You might assume the "developing middle class" are mainly factory workers but they're not. One of the most startling results of the ILO survey is that more than half the "developing middle class" works in the service sector. Factory workers form between 15% and 20% of each income group: they are spread from the destitute to the above-$13 group. This, say the researchers, reflects the fact that the industrial sector of the global south now offers as much skilled, high-value work as it does sweated labour.

When Harvard economist Richard Freeman calculated the "great doubling" of the world's workforce – as a result of global development and the entry of former communist states into the market – the assumption was that this would recreate a "proletariat" at the periphery of capitalism. It did, but the ILO calculation is the strongest evidence to date that they are moving steadily towards stratification and more service-oriented work, just as its rich-world counterpart did in the 1960s and 70s. Go to the reality of being "new middle class" in Brazil, Morocco or Indonesia and the word "comfortable" does not spring to mind. It means often living in a chaotic mega-city, cheek-by-jowl with abject poverty and crime, crowding on to makeshift public transport systems and seeing your income leach away into the pockets of all kinds of corrupt officials, middlemen and grey market people. This in turn has shaped what people protest about. There remain, of course, high-profile workers' struggles: in Argentina there are still more than 180 occupied factories. The cotton city of El-Mahalla el Kubra in Egypt remains the kind of place that can pull a total work stoppage and, as in December 2012, declare "autonomy" from the government.

But the ILO trend suggests that, by the second quarter of the century, the typical social dynamics of a medium-developed country will be a mixture of "workplace" conflicts and the more networked, sporadic and volatile ones we saw in Turkey and Brazil last year. The western left has lived through decades of angst over the decline of the manual work, and its ideology of resistance, sometimes softened by the hope that it would all be recreated somewhere else. The ILO survey suggests not.

What was unthinkable 20 years ago is now becoming tangible: that the real incomes of skilled workers, knowledge workers and managers in "developing countries" are overlapping with those at the bottom of the heap in western society. But where once this prospect was understood to foretell stability, it does not. As the World Bank lead economist Branko Milanovic has shown, when it comes to causing inequality, the impact of class and location have reversed: "Around 1870, class explained more than two thirds of global inequality. And now? The proportions have exactly flipped: more than two thirds of total inequality is due to location."

Milanovic calls this the "non-Marxian world", in which class struggle becomes less useful as a strategy and the logical thing to do is migrate: "Either poor countries will become richer or poor people will migrate to rich countries". I think, on the contrary, that the upsurge of unrest is a signal that the rising, poor, new middle class – which cannot migrate en masse – has decided to force poor countries to become richer in democracy, sustainability, urban infrastructure, healthcare.

They're choosing signal issues – corruption, transport, green space as in the Gezi Park occupation in Istanbul – but across the world their determination to make life on $13 a day less arbitrary and insecure is clear.

http://www.theguardian.com/commentisfree/2014/jan/20/new-middle-classes-world-poor

The Middle Classes: 

Workers, 

not Owners

by Hugo Radice

In a recent Guardian article, Paul Mason discusses the rapid growth of a global ‘new middle class’ of educated, skilled and mostly non-manual workers as a result of globalisation. He argues that while rising incomes have lifted them out of desperate poverty, they now fight on issues such as corruption, democracy, urban infrastructure and healthcare.

The article was informative and refreshing in many ways, especially in situating the question of class globally rather than nationally, and in taking account of the universal shift from manual to non-manual work. But it also revealed the continuing confusion that bedevils public discussion about class – both here and in the rising economies of the global south. In particular, what do we mean when we speak of the middle class, ‘old’ or ‘new’, or indeed the plural ‘middle classes’? And if their defining characteristic is ‘middle’, what lies above and below them?

In most discussion, whether in mainstream academia or in the media – ‘classes’ are seen as separate groupings, based on a shifting amalgam of occupation, income, status and lifestyle. Usually these classes are understood to be arranged in a hierarchy. Social mobility is often a major concern, and it is measured by looking at how many people move upwards (or indeed downwards) from one such designated class to another.

This approach creates many difficulties when tracking class affiliation through time. If we take a stripped-down approach in which occupation alone defines class, the most common traditional distinction is between blue-collar or manual workers, defined as ‘working-class’, and white-collar or non-manual workers, defined as ‘middle-class’. Given the powerful occupational shift in countries like the UK from manual to non-manual work, this yields the result, comforting for many commentators, that these  countries have in recent decades become more middle-class. 

Last year, a major academic survey of classes in the UK ended up with no fewer than seven ‘classes’. The survey, led by sociologist Mike Savage, sought to broaden the traditional occupational analysis of class by more fully taking into account ‘the role of cultural and social processes in generating class divisions’. The survey argues that ‘this new seven class model recognises both social polarisation in British society and class fragmentation in its middle layers’.[1]

The authors identify distinct groupings in terms of their experiences, attitudes and lifestyles, and relate them to underlying economic and social trends.  Such an approach is attractive because it roots class identity in something common to all of us, namely a life-path that can be mapped out and analysed, and because the data generated in such a survey can then be subjected to sophisticated statistical analysis. The elements selected for recording are underpinned by a particular conceptual framework, developed some thirty years ago by the French sociologist Pierre Bourdieu.[2]  In this approach, individuals are differentiated by their possession of economic, cultural and social capital in different quantities and proportions – the three forms of ‘capital’ being in principle independent of each other. The data are then analysed in order to identify clusters of individuals – eventually in this case, seven in number – who broadly share the same economic, social and cultural characteristics.

The immediate problem with this approach is that it avoids any need to identify or explain any overall social processes that might, between them, be shaping changes in how we ‘cluster’ in particular classes, and how these classes interact with each other. This makes it very hard to ask really important questions about society as a whole, and how social differentiation changes through time: in short, you can’t see the wood for the trees.

For this purpose, we could try a different approach. Specifically, it is helpful to go back to Marx; not the usual caricature of the ‘industrial proletariat’, but the actual concept of class in Marx. He argued that class was not a thing, but a relationship, that it was the key constitutive feature of any distinct form of social order, and that it was grounded in how a given society produced and reproduced its means of subsistence. In capitalism, the class relation is substantively what, for the purposes of critiquing political economy, he alternatively calls ‘capital’. This concept of capital is utterly different from that of Bourdieu: far from being an individual possession, it is the overall social relation between a class of people who own the means of production, and can live off the returns on those assets; and a class of people who are obliged instead to sell their labour-power in order to live and reproduce themselves.  Marx's familiar names for the two sides of this bilateral relationship are the bourgeoisie and the proletariat, but given the widespread unease today about such terminology we might just as well call them the ‘owners’ and the ‘workers’.

The great value of this relational approach to class is that it allows us to link firmly together those aspects of our society that are, in mainstream social sciences, treated separately: the economic, the political and the socio-cultural. Using this approach, we can immediately understand that occupational changes have no necessary impact on the proportions of these two ‘great classes’. We can also see that there are huge differences in income within each of them: among the class of owners between, for example, Bill Gates and the owner of the White Rose Hotel in my home village; or among the workers between a university vice-chancellor and a university cleaner.

A key element of the relational concept of class is to do with economic security. Anyone securely lodged within the owning class is thereby largely spared the ups and downs of the trade cycle, but small owners (Marx’s ‘petty-bourgeoisie’) may find themselves rudely relegated into the working class.  Some workers, usually among those termed ‘skilled’, are so essential to any continuity of production that they have permanent economic security, at least through their working lives. The issue of economic security (also known sometimes as ‘existential’ security, though that is also determined by natural disasters, war and peace, etc.) is of course historically the source of the introduction of measures of social protection and welfare. Because it is such an important matter, it is also one of the most important factors generating political parties and other representative institutions (notably of business and labour).

What, then, are the ‘middle classes’ in this approach? For this we can go way back before Marx, to the dawn of the industrial age. There we find a class of wealthy and powerful owners of land and businesses, and ordinary workers in agriculture, urban production and commerce, typically propertyless but retaining some traditional rights of access to means of subsistence. But between these two broad groups lay the ‘middling’ classes: yeoman farmers, independent artisans, urban craftsmen with employees, professionals such as lawyers and the clergy, and small owners in transport and trade.  With industrialisation, the occupational and spatial characteristics of these middle classes were thrown into disarray. The owners became more oriented to industry and finance, and less to land and commerce, while in some spheres, economies of scale in the new technologies rapidly differentiated them.  The new ‘industrial’ workers included both deskilled artisans and newly-urbanised ‘free’ labourers, as well as workers in transportation, commerce, government and household service; while even the still-numerous agricultural workers found their lives transformed by changes in technology and organisation. Crucially, the workers were differentiated right away both by increasing diversity of occupations, trades and skills, and by the owners’ need, in every economic sector, for a stratum of overseers and ‘white-collar’ clerks to record the flows of goods and money.

These changes can be tracked historically ever since; what is more, the social processes that were set in train in Britain as pioneer of capitalism can be seen to emerge as this new social order spreads. The phenomena of ‘middle class revolt’ that are seen today in Turkey or Brazil are strikingly similar, not just structurally but in terms of political agency, to Chartism in 1840s Britain. Then as now, workers who are more skilled, more educated and more urban are in fact responding more readily to the dynamics of the class relation between owners and workers. They are, for the most part, workers in Marx’s sense, whether they are journalists, car workers, teachers, fast-food sellers, students or whatever. They will find support, then as now, from enlightened owners who are shamed by their relative condition into seeking alongside them a more equitable distribution of wealth and power.  And they will seek political representation.

In identifying ‘classes’ as groups of citizens sharing common characteristics, studies like the recent LSE survey are undoubtedly useful, both for private sector firms in designing their marketing strategies, and for government departments and advisers on public policies. And part of their usefulness lies in identifying the extent to which individuals are able to move from one group to another – for example, from the LSE survey’s ‘established middle class’ (class 2) to the ‘elite’ (class 1), or from the ‘new affluent workers’ (class 4) to the ‘technical middle class’ (class 3). However, the relational approach to class offers a much more coherent account of the economic and social wellsprings of differentiation and dissent. And that is exactly why it is today largely passed over in silence by mainstream academia. 

But there is a further reason why the purveyors of knowledge should prefer instead to divide us into ‘working-class’ and ‘middle-class’, namely that they themselves have largely thrown in their lot with the owners.  Social scientists such as Alvin Gouldner, Lawrence King and Ivan Szelenyi[3] have argued that intellectuals – or as many would put it today, knowledge workers – sought in the 20th century to secure their relative position in society by playing upon the owners’ need for their scientific, technical and managerial skills. 

That worked reasonably well, as long as capitalism was contained more or less within national political boundaries, within which a consensus could be built around a welfare state, a mixed economy and a modicum of redistribution.  But in recent decades, the revival of liberalism, the rise of finance and global economic integration have shattered the compromises of welfare-state capitalism and Third World developmentalism alike. The owners can now roam the world in search of profit, recovering the share of wealth and power that they enjoyed in the late 19th century. They are now unchallenged by any alternative order, whether based on state socialism or on nationalism underpinned by ethnicity, religion or culture.

But they still require the knowledge workers. It is up to us (for I too am one, and so in all probability are you) to decide where our loyalties lie. Hopefully we will realise that, with the exception of the top class identified by the LSE survey – the elite – the rest of us may, despite all our apparent differences, together form a unified working class around our desire for a more equal and just society.

Hugo Radice is a Life Fellow at the School of Politics and International Studies at the University of Leeds.

---

[1] Mike Savage et al., ‘A new model of social class? Findings from the Great British class survey experiment’, Sociology 47/2, April 2013, p.  220.  Athttp://soc.sagepub.com/content/47/2/219.full.pdf+html. 

[2] Pierre Bourdieu, Distinction.  London: Routledge, 1984.

[3] Alvin Gouldner, The Future of Intellectuals and the Rise of the New Class, New York: Seabury, 1979; Lawrence King and Ivan Szelenyi, Theories of the New Class: Intellectuals and Power, Minneapolis: University of Minnesota Press, 2004.

http://www.newleftproject.org/index.php/site/article_comments/the_middle_classes_workers_not_owners

Class on a global scale: the emerging transnational capitalists

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Globalization

Andrew Self (TC) : Economist Adam Smith wrote famously in 1776 that “A merchant, it has been said very properly, is not necessarily a citizen of any particular country”. Over 200 years later, the head of Gillette, Al Zeien,espoused a similar view. “A global company views the world as a single country. We know that Argentina and France are different, but we treat them the same”.

The World Economic Forum is one meeting place where the hyper-elite, transnational capitalists can get together and become a class without a country. EPA/Jean-Christophe Bott

These quotes both highlight the global capitalist drive to accumulate profit in any market. But there is a difference between the two. Smith focuses on an economy in which capital flows between nations. Zeien alludes to an internationalism of capitalism into a singular global system that has occurred since the 1970s.

It is this very shift in capitalist accumulation that has created a new, transnational capitalist class. The formation of this class has evolved from the opening up of national economies and global integration since the Thatcher and Reagan era. Capital has become more mobile. This means that class formation is less and less tied to a particular nation-state or territory.

The transnational capitalist class is a global ruling class. It is a ruling class because it controls the levers of an emergent transnational apparatus and global decision-making. It is a new hegemonic bloc of various economic and political actors from both the global North and South, which has come out of the new conditions of global capitalism.

The ties that bind

Members of this new class have connections to each other that have become more significant than their ties to their home nations and governments. Forums such as the annual World Economic Forum at Davos are where these hyper-elites can get together and become a class without a country: the new global leadership.

This bloc is composed of the transnational corporations and financial institutions, the elites that manage the supranational economic planning agencies, major forces in the dominant political parties, media conglomerates and technocratic elites and state managers in both North and South.

Bono: A Neoliberal in sunglasses? EPA/Jean-Christophe Bott

These 7000 or so people include heads of state, religious and military leaders – even the neoliberal in sunglasses, Bono – but the core membership is businessmen: hedge fund managers, technology entrepreneurs and private equity investors.

What makes this class different from the traditional ruling class in previous epochs is that the interests of its members are increasingly globally linked, rather than exclusively local and national in origin. This is due to the increased mobility of capital, and technology has shifted to create an environment that is beneficial to members of this particularly modern class.

They are also ideologues, expressing the interests of global rather than local capital through free market neoliberal ideologies and the culture-ideology of consumerism. This follows directly from the shareholder-driven growth economy that lies behind theglobalisation of the world economy.

This is not to say that the world is still not organised in terms of discrete national economies. The transnational capitalist class ideologically constructs the best interests of the world in terms of markets, which may or may not coincide with a specific nation-state.

How does it manifest?

This class’ economic and ideological power has a discourse of national competiveness and turning most spheres of social life into business. It strives to make schools, universities, prisons, hospitals and welfare more business-like.

In addition to the World Economic Forum, the transnational capital class also exercises power through its membership in thinktanks (such as the American Enterprise Institute, or Institute of Public Affairs in Australia) or corporate associations (such as the World Petroleum Council for the oil industry), and its control of the mass media, countless charities and foundations as well as university boards.

Their development of global, interconnected industries and businesses make them drivers of world capitalism. The program reaffirms the set of macroeconomic fiscal and monetary policies associated with neoliberalism: the withdrawal of the state from economic issues.

But these aspects are combined with a new emphasis on social issues and a quite liberal stance on these matters, emphasising, in the best bourgeois tradition, equality of opportunity, a new political culture of market individualism, and local political decentralisation along with a flexible labour market.

If, in cultural theorist Frederic Jameson’s assessment, postmodernism is the “cultural logic” of late capitalism, what we may be seeing is the emerging “political logic” of global capitalism, with its attendant forms of flexible accumulation.

As a result, the whole global production process is broken down into smaller parts and moved to different countries where investment and profit are the highest. Yet, at the same time, this worldwidedecentralisation and fragmentation of the production process has taken place alongside thecentralisation of command and control of the global economy by this class.

In a recent Oxfam report, it was noted that in the past 20 years, the richest 1% had increased their incomes by 60%. Barbara Stocking, an Oxfam executive, said unequivocally that this is:

… economically inefficient, politically corrosive, socially divisive and environmentally destructive … We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true.

The new global capitalism opens up a large rift between the global rich and the global poor, not just on a national scale. EPA/Stephen Morrison

The top 147 transnational corporations control roughly 40% of the entire economic value of the world’s transnational corporations.

This form of globalisation unifies the world into a single production system. But this also means that the new global capitalism opens up a large rift between the global rich and the global poor, not just on a national scale. Therefore, the 21st century is going to see conflicts and disputes for control between the new transnational ruling group and the expanding ranks of the poor and themarginalised.

In developing countries such as Turkey, there has been the downward mobility – or proletarianisation – of older middle classes and professional strata. Peasants and artisans, and the working class itself, has become flexible and informal.

A growing global working class has emerged that runs the factories, offices and farms of the global economy. It is a stratified and heterogeneous class, to be sure, but an expanding one. It is this new proletariat created in Latin America since the 1980s that is largely responsible for the “left turn” in the region.

And although the first world working class does not realise it, being dependent on first world surplus profit, these are our allies in creating a better, fairer, sustainable world.

It is not clear in the new epoch how the contradictions of global capitalism will be played out, in particular those of overaccumulation and worldwide social polarisation. An expanding transnational proletariat is the alter ego of the transnational capitalist class. Struggle between the two will shape the dynamics of emerging global society.

* Andrew Self, The Conversation – Andrew Self is a Postgraduate Associate at the Institute of Latin America Studies, La Trobe University. “Class in Australia” is a series published  to identify, illuminate and debate its many manifestations. Here, Andrew Self examines how class operates on a global scale, and whether or not it is a cross-border phenomenon.

Editor’s note: Andrew Self is referring to 147 transnational corporations owing roughly 40 % of the global economy. The report below details exactly which corporations are involved. Moreover, it details who it is, that constitutes the very small “super-elite” or cartel that is controlling them. – Christof Lehmann

http://nsnbc.me/2014/02/28/class-global-scale-emerging-transnational-capitalists/